Princeton Town Topics – Let’s Talk Real Estate – May 27, 2009
WORKING WITH APPRAISERS
After the buyer and seller come to a “meeting of the minds” on the price of a house, there is one more person who must be convinced that the house is worth the selling price: the mortgage company’s appraiser.
The appraiser looks for three or more comparable houses that have sold in the same area within the last six or so months, and compares the selling prices of these homes with the one you are buying. They make adjustments to account for the differences in each property, and the value for your house will be based on the adjusted prices of the other homes. In subdivisions or condominium projects where there are many similar properties and plenty of recent sales, the appraiser has enough information on which to base his price. In neighborhoods of older homes that have been renovated or remodeled over the years, it can be like comparing apples and oranges. In some cases, the professional appraiser will use other success-proven techniques to determine a realistic market value.
If the appraiser’s evaluation is lower than the agreed-upon purchase price, it can threaten the transaction if the lender declines the buyer’s loan based on the appraisal. In that case, the help of a knowledgeable Realtor can be a valuable asset in the transaction.
