07 Dec What is the function of the appraisal?

What is the function of the appraisal?

 

What is the reason for an appraisal?

You have an appraisal on a land, condo, townhome, single family home or an investment purchase. The lender requires it in order to provide a mortgage. The mortgage company needs to be sure the purchase price is an accurate value. What is the function of the appraisal? They do this to protect their mortgage outlay. In addition, it’s done to protect the buyer’s investment.

Who does the appraisal?

A certified appraiser does the appraisal. Also, a licensed appraiser has gone through considerable education and testing.

Who pays for the appraisal?

The buyer pays for the appraisal. For a one unit purchase they normally cost about $500.00. Another option is to have it negotiated for the seller to pay. You can achieve this with seller paid closing costs. Ask your agent for help in scheduled your offer this way.

Can the loan officer and agents talk to the appraiser?

RISPA rules state that no one is to be in direct contact with the appraiser.  In fact neutral third-party companies pick who the appraiser will be. Ten years ago, there were some issues with appraisers being “inhouse” and paid by the lenders or mortgage companies. This created some neutrality issues and is now prohibited. This has given us some protections.

When are appraisals not needed?

Yes, when the purchase is cash there is no need for an appraisal. Also, when the buyer has a very large down payment the mortgage company may only require an automated appraisal. This streamlines the lending process and shortens the time needed to close. The seller looks at this as a very favorable condition. Because the seller has one less contingency.

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Please contact The Anderson Team with any questions. We are here to help educate you through all aspects of a real estate transaction!

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