Avoiding a low home appraisal

Whether you are buying or selling a house, the home appraisal must be taken very seriously. Even after your deal is done, there is always the risk of an under-appraisal, which could affect the contract. Imagine a situation where you agree on $500,000 for a house that was listed for $600,000, having offered the seller $400,000. A few days before you close the deal, an expert appraiser comes in and says the value of the house is $375,000. This is the value that the mortgage company or your bank will actually be legally allowed to lend against this house.

These are common situations during landscaping Tucson. If you are the buyer, you have to spend more to cover the shortfall. Since the seller had already come down from their first price they would be naturally unwilling to go any lower. The buyer, on the other hand, might not have the additional money, and, will also not be willing to buy the house at a higher value than the appraisal. This is how the deal crumbles.

What Can Cause a Low Appraisal

In most cases, short appraisals are common in declining house markets. This is usually due to the scarcity of home sales in the area that can be used for comparison purposes. As a result, appraisers have a tough time figuring out the true market value of the property in question.

As the sales decline, comparisons age really fast. When you factor in the impact of short sales and foreclosures, it becomes difficult to get a good estimate. However, to make things easier, the Home Valuation Code of Conduct put in place in 2009 keeps appraisers away from direct contact with the lenders.

Therefore, lenders will have to work with appraisal management companies. The problem is that these companies have a lot of residential appraisers, some of whom do not have a good understanding of the dynamics of the home market under question or are not properly trained. This is why you could end up with a low Tucson landscaping.

How to Protect Yourself

Whether you are a buyer or a seller, you can keep your investment safe from a low home appraisal, in the following ways:

Sellers

Before you list your home, make sure you have the appraisal done by an expert. If you do not have any leads, you can search on the Appraisal Institute website.

– Always set the listing price based on the appraisal.
– You must provide the buyer’s appraiser with a copy of the pre-listing appraisal
– If you feel the appraisal is too low, ask questions. The supervisor might have overlooked something.

Buyers

– Insist that your lender sends you a local appraiser, one who understands the local market dynamics. Someone from your county will serve you best.
– Make sure that the appraiser is certified as a residental appraiser. Ask for their professional designation and identification. Since you are paying for this service, you have the right to reject an appraiser that you think doesn’t meet your standards.

To avoid low landscape design Tucson, you should be there when the appraiser is inspecting the home. This way, you can share some information and exchange ideas on the foreclosures and short sales which may significantly affect the price. Only lenders are prohibited from speaking to appraisers, so as a buyer, you are free to interact with them.