Appraisals for Home Buyers
If you are currently in the process or you are just thinking of buying a property, the appraisal is a key component of the process.
There are a dozen reasons why buyers absolutely should pay attention to the appraisal or ask for some private advanced consulting but I will start off with the obvious and most popular answer. It Depends?
If you need a loan to buy the property – most likely there will be an appraisal ordered by your lender as part of the loan process. This will make sure you are not over paying for the property or there is anything obviously hokey with the place.
The appraiser is a third party neutral observer to the transaction and is not there to advocate for any of the parties. Not the bank to make the loan, not the real estate agents so they make their commissions, not the seller to make sure he gets his sale price and not the buyer who really wants to buy the home. If this is your situation securing your own appraiser may not be needed. But sometimes it might be.
Due to the Dodd-Frank Financial Reform regulations and the Appraiser Independence Regulations – you do not own the appraisal report coming from the lender. The appraisers’ client is the appraisal management company and/or lender and not you the buyer.
Yes, you pay for an appraisal but that is part of the closing cost package as part of the loan. The bank wants the appraisal which is part of the package. You are not the client and the appraiser is not obligated to talk to you or explain the report, the value conclusion or any of its components. By law, you must get a copy of the appraisal report but not a walk through or explanation.
You could hire a second appraiser to review the first appraisers report. The second appraiser could then explain some of the facts and figures presented. Of course, this is a review only and not used against or to combat the first report.
You could hire your own appraiser to provide a completely alternate full report. You are the client and will absolutely be explained all the details and any questions you want.
Now, let’s talk about situations when you absolutely should get your own appraiser.
- Cash Deals. There is no lender holding your hand. Unless you do real estate for a living you seriously should consider getting your own report.
- For Sale By Owner. There may be some things the owner isn’t telling you or perhaps the place is priced too high. A formal appraisal will give you some leverage to negotiate a more reasonable sale price.
- Family Sales. Sometimes emotion and familial bonds make the buyer somewhat blind to some “issues”. A third-party appraiser may be just the ticket to work through all that.
- Estate sales. Family members who have not been in the house in decades are now in control of selling. Having a formal appraiser report and walk through may provide a lot of information missed by the executor.
- Short Sales. The bank who is short on the mortgage money wants to recoup as much money as possible. Sometimes the market value is below what they have it marketed at. Do you want to buy an overpriced property?
- Pre-Foreclosure. Another a tough situation where the homeowner may or may not be living in the home. If the property is vacant – is it a good sale price and do you understand what is or is not going to be turned on such as water and electric, fixed and operational such as the furnace and plumbing fixtures the day you take it over.
- The wrong buyer agent. Some buyers work with buyer agents that may be inexperienced and not as professional as they could be. Some are obviously awesome and worth their weight in gold. If you get any feelings about the prior agent, you can always order an appraisal to make sure you are getting a full picture.
There are many more examples but those are the ones that roll on the top of my head.
Should you need appraisal services in Massachusetts please let us know. If you need a referral for other areas of the country you can also ask us to refer a professional in your area.
Standard operating procedure for Hub Appraisal includes...
- A quick response to your concerns: You will acquire specialized feedback from us for your request. Be sure to Contact Us about your specific situation and we will do everything we can to help you out.
- Our company guarantees immediate call back time: We typically will respond to your inquiry within 24 hours.
- Appraisal and consulting report formats to suit YOUR needs: When it comes to an appraisal report service or consulting, "One size does NOT fit all!" Hub Appraisal offers multiple types of report layouts and delivery methods that can be discussed when you call.
- Professional Services: You can rest assured that all Hub Appraisal's services meet or exceed Massachusetts's guidelines and the Uniform Standards of Professional Practice that govern appraisal standards on a federal level. As with any service, if there are any questions at all about your appraisal - before or after you've received it - be sure to Contact Us.