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The Buying Process: Appraisal

Things to Know:

As a part of your lending processes, your preferred lender will ensure that an unbiased party shares their “opinion of value” known as an appraisal.

The cost of the appraisal is calculated in the closing costs that the lending company typically discloses to you in the beginning of the process. Sometimes, lending companies will work to secure the appraisal fee and credit it back at closing. This could be considered paying the appraisal fee “upfront” versus deferring it to closing.

If paid “upfront” expect to be asked for this fee within a few weeks after going under contract on your new home. Some lenders ask for the appraisal fee to be covered up front although it's already apart of closing costs. This fee could run $475- $600.


1. What happens if the opinion of the Appraiser is lower than our offer?

If the appraiser's opinion of value comes in "Below offered amount," you have options: successfully renegotiate to the appraised value, walk away, or pay the cash difference. If you walk away due to a low appraisal, earnest funds are typically released / refunded back to you as the buyer.

2. What happens if their opinion is “spot on” and comes in at the same price we offered?

If the appraiser's opinion of value comes in "Right at the offered amount," no changes are needed. We proceed towards closing.

3. What happens if the opinion of the appraiser is HIGHER???

If the appraiser's opinion of value comes in "Above the offered amount," CONGRATS! This would essentially mean that you now have EQUITY in your new purchase! Another way to view it is that you receive a "good deal" on your new home!

This is just a brief review of what to expect (in general) with the Appraisal process. Feel free to ask any questions you might have!