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Anita Kay
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Buyer Tips | Seller Tips | General Tips | Real Estate Glossary
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 similar 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 price for your house will be the average
of the adjusted prices of the other three homes. In subdivisions or condominium
projects where there are many similar properties and plenty of recent sales, the
appraiser's job is fairly easy. In neighborhoods of older homes that have been
renovated or remodeled over the years, it can be like comparing apples and
oranges.
If the appraiser's evaluation is lower than the selling price, it can
threaten the transaction if the lender declines the buyer's loan based on the
appraisal. In that case, a knowledgeable Realtor can sometimes work with the
appraiser to make the transaction work.
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