Morning, noon and night Jack and Jill were reading their checklist points and gathering the information they needed to be informed home buyers.  “Jill”, Jack said pausing then continuing, “I think it’s a good thing we are reading these checkpoints because I have no clue what this one is all about.”  And with out allowing Jill to respoind Jack began to read………

#12 The Appraisal

The appraisal is the value that the lending bank has applied to the real estate that is being purchased.  An appraisal will be ordered by the lending bank on the real estate that you have an executed contract on.  The lender typically orders the appraisal AFTER you have done all your tire kicking(inspections, and repair negotiations).  Here’s the bottom line on an appraisal…the subject real estate HAS to appraise for equal to or higher than the contract sales price.  If it does not you are back to the drawing board with the seller.  This is on of the reasons you discuss the competitive market analysis at length with your REALTOR.  The competitive market analysis DOES NOT take the place of an appraisal, but if can give you some insight on what the appraiser might come up with.  Your REALTOR and the appraiser in all likelihood will be using the same comparables and both should have a similar approach on what to do with those comparables.  The appraisal from YOUR bank rules the day, even if the seller had an independent appraisal done on their home.  Should the home not appraise the seller or buyer could dispute the results.  In today’s market most appraisals stand because of all the checking and double check they, the appraisers, do now.

“Jack, I don’t think I would have known that’s what this checkpoint was about.”  said Jill  “Good information and it makes since.  The bank wouldn’t want to lend money on real estate that doesn’t at least equal the amount they are lending.”  Jack said as he shook his head.  “Kinda makes your head hurt doesn’t it, Jack?  It’s pretty deep stuff.” Jill responded.  And so our two heroes were getting closer to the last check point so their anticipation was growing, they couldn’t wait to read the next check point entitled:

“Jack and Jill: HUD, Funding, Cookies Oh My!  The Home Buyers Checklist You’ve Been Waiting for (14 of 15)”

We hope you’re enjoying our series and that it helps you on your way to……………..

Live Life to the Fullest,

S.C.