What Happens During a Home Appraisal?
If you’re financing a home purchase, an appraisal will typically be part of the process. Your lender orders the appraisal to get an independent opinion of the home’s value before finalizing the loan.
What Does an Appraiser Look At?
An appraiser considers several factors when determining a home’s value, including:
The size and overall condition of the property
Location and neighborhood
Number of bedrooms and bathrooms
Recent comparable home sales
Features, upgrades, and improvements
Current market conditions
The goal is to determine whether the home’s value supports the purchase price.
What If the Appraisal Comes in Low?
A low appraisal doesn’t necessarily mean the purchase is over. Depending on the terms of your contract, there may be several options.
The buyer and seller may renegotiate the purchase price, the buyer may choose to cover some or all of the difference, or the appraisal may be reviewed if there is information that could affect the valuation.
This is where having a clear understanding of your contract and appraisal contingency becomes especially important.
We’ll Help You Through It
Every transaction is different, and an appraisal is just one part of the home-buying process. If an issue comes up, we’ll review the situation with you, explain your options, and help you determine the best next step.
Thinking about buying a home in Santa Cruz or Monterey County? We’re always happy to answer questions and help you understand what to expect along the way.