If You Are Financing
The mortgage company will require an appraisal if you are financing the house. The appraiser will look at the property, compare it with other homes recently sold in the area, and will come up with their opinion as to the value of the home. This appraised value will have a very important affect on your transaction.
You might have a few questions on the process such as:
- What goes into an appraisal and what does it mean to you?
- What happens if the appraisal value is lower than the agreed upon sales price?
- The seller and you have already agreed upon a price. How can a stranger change that agreement?
- Can we get a different appraiser if we don’t agree with the appraisal?
The Appraisal Process
Appraisers are licensed by the State of Oklahoma. They must pass a test and demonstrate a level of knowledge on the local real estate market. They also are required to attend continuing education on how to perform appraisals. Appraisers are required to use a scientific process to value your home, but in the end, the appraisal is still an expert opinion.
When an appraisal is requested by your mortgage company, an appraiser in assigned from an appraisal pool. In the past mortgage companies were able to choose their appraisers, but this is no longer the case in Oklahoma. Appraisers are independently assigned and do not depend on the mortgage company for their work.
They are required to visit the property and perform a cursory inspection. This is not the same as a detailed home inspection. The appraiser may only spend 15-20 minutes looking at the overall condition of the home and measuring rooms for square footage calculations. They generally take pictures of the home to support their appraisal. After visiting the home they generally search the MLS to find comparable properties that recently sold in the same area. These comparables ideally should be built about the same time, be in the same neighborhood, and be in similar condition. Of course no two homes are identical so the appraiser must then adjust the values on your home to account for these changes. These adjustments can be for square footage, location, wear and tear, age, and other variables.