Michael Holigan: One of the key players in a mortgage loan is the appraiser. If he doesn't sign off on the contract price and the condition of the home, the loan probably won't be made. The appraiser does much more than measure square footage. He sizes up the neighborhood.
Kelly Spell: Well, that's one thing we look for, is the external influences. A busier than normal traffic, a street, could be a detriment, also possibly a commercial development by your house would be something that would be a negative. Power lines would also be a negative.
M.H.: There are national requirements for appraisers and when evaluating a house they follow national guidelines. But they ultimately determine the value of a house on a very local level. What it comes down to is what other homes in the neighborhood are going for.
K.S.: The main problem an appraiser has, generally, is if you have limited sales data in a neighborhood. It makes it very difficult to get a good comparison to your subject.
M.H.: Other problems that can complicate, if not kill the loan, have to do with the condition of the house. A leaking roof, a bad foundation, dry rot or termite damage or big concerns. In those cases an inspector will be hired to determine the extent of the problem. The lender may require repairs before the loan is approved. After examining the condition of the house and factoring in neighborhood home sales, the appraiser determines how much the house is worth.
K.S.: If the value of a house is not there, as far as the buyer and seller have agreed upon, many times the deal can fall through on that.
M.H.: The appraisal is done to protect the lender, but in a number of cases it actually benefits the home buyer. If the appraisal estimate comes in lower than the contract sales price, you can sit down and renegotiate with the seller. If the appraisal comes in higher, then you're getting more home than you're paying for.
Find out how much home you can afford - it's FREE!
Episode 42 1996 - 97 Season
| Firesafe | Coffee Can Tool Caddy | Home Security | Ant Formula | 3-D Floor Plans | Plumber's Friend | Appraisals |