Are you utilizing a mortgage to purchase your next home? If yes, then you most likely, will have an appraisal completed of the property. This is where they send out an appraiser to physically take a look at the inside and outside of the property, measure the size, and analyze other sold properties in the area that are the most similar to your property. Usually, the lender will reach out to your to get the go ahead to order the appraisal after your option period is over. The appraisal is, for most lenders, a fee that will be paid "outside of closing", meaning, you'll pay it when it's ordered, so they just want to make sure you are going to be moving forward with the house.
In some cases, we or the lender might suggest to go ahead and order it earlier and even put a rush on it. We usually suggest this for a couple of reasons, one, to see what the value is before you lose the ability to "opt out" for any reason and two, if we are working on a very short timeline for closing it will be best to go ahead and get it ordered so it doesn't delay closing. In both cases, it's something we will discuss as we're writing offers and you can decide how you want to handle it.
Once the appraiser completes their paperwork, they will send their report to you and your lender. We would ask that you also forward us a copy. In the report, you will see the exact value they have put on the home. The lender will move forward with this number. Sometimes, the appraisal comes in higher than your sales price, CONGRATS! You'll be walking in with some equity. And in some cases, the value will be lower than the sales price. This case, you'll have several options depending on the situation, which we will discuss as we're writing offers so you can factor this into your decision to write an offer.
This is a big hurdle you and the seller will have to jump. Don't worry, we'll be there with you the whole time to walk you through the process and give you options on any decision you'll need to make when it comes to the appraisal. The good news.... this is the last big hurdle and closing will be around the corner!