Appraisal Myths
Putting your home on the market involves more than just your wallet, your time and your realtor—it can also become an issue of the heart. After all, this is the home where you have built your memories, your families, and maybe even that weird looking play house out back that your kids absolutely love! That is what makes the appraisal process the worst! Who are they to put a price on your home… but ultimately, that is their job. But what exactly could add value to your home, in your appraiser’s eyes? I’ve got news for you, it’s not the weird play house. Let’s look at three of the most common myths that surround the home appraisal.
Myth 1: The buyer has hired the appraiser.
The appraiser doesn’t work for the buyer, he or she works for the buyer’s lender. So even though this is a cost covered by the buyer, they have not been hired directly by them. So even though, at this point, the seller and buyer have agreed on a price, the appraisal is needed to help protect the lender from getting into a bad deal. There is no reason to worry about an unfair situation, for example, the buyer will never be able to hire their father- in-law to appraise the home. In fact, it is illegal to put pressure on an appraiser to come in at a certain value.
Myth 2: The bigger the home, the bigger the value.
The biggest home on the block, in this case, may only be good for house parties. Just because the home is significantly larger than the rest of the surrounding homes, doesn’t mean it’s worth is also significantly larger. When calculating the value, the appraiser will take into consideration the common home value that would be expected on the same lot.
Myth 3: An appraisal is the final number for which the home is sold.
As mentioned earlier, the appraisal is in place to protect the lender. While it is certainly not a reason to celebrate, if the appraisal comes in lower than the agreed upon price, it does not mean that your original deal is doomed! The buyer could offer to cover the difference, the seller could throw in, or ultimately, there is always the option of cancelling the contract and finding a new buyer or if you are the buyer, a different house.
It may help you to think of the appraisal as a tool to remove the emotion from this deal- the appraiser is an unbiased person who helps to make sure the deal is fair for the parties involved. So sit back, don’t fret because there is nothing you can do at this point—just enjoy watching your kids play in that weird little playhouse for a while longer.