The inspection is always nerve racking for buyers and sellers, but another anxious time is when the appraisal is due. Appraisals are mandatory unless the bank waives them because of a very high down payment (conventional loans only).
When is the appraisal deadline?
If your buyer is using a government loan (VA, FHA or USDA), then there will be no appraisal deadline in your contract. If your buyer is using a conventional loan, you will see an appraisal deadline in your Contract to Buy and Sell. This is the date by which your buyer will need to know if there is an issue with the appraisal value.
Note: We are based in Colorado Springs, Colorado. If you are planning to sell your house in a different area, we can match you with an excellent local agent. Give us a call (719-321-0800) or email us (email@example.com) for a referral.
When does the appraisal happen?
Usually, the appraisal happens after the inspection is completed. Contracts can fall through after the inspection if the buyers and sellers can’t come to an agreement for the inspection resolution. Many buyers wait until an inspection resolution is signed in order avoid spending money on an appraisal unnecessarily.
If your buyer is using a conventional loan, expect only a few days between the appraisal order and the appraiser calling for an appointment. The appraiser on a VA Loan has a 15 business day turnaround time. This will seem exceptionally long when you are waiting for a value to come in so that you can proceed with closing.
Who orders the appraiser?
The buyer’s lender will order the appraisal as soon as the lender gets the “go ahead” from the buyer.
What can I do to prepare for the appraisal?
List all upgrades in your home in comparison to other homes in your neighborhood. List any upgrades you have made since purchasing the home. Provide this list to me to include it in the appraisal package.
Do I have to be present? Can I stay in the home during the appraisal?
You do not have to be present. You do not need to leave if you happen to be home during the appointment. Depending on how much notice our team has, we will meet the appraiser at your house for the appointment. If we are unable to attend the appraisal, we will email the appraiser any information we have about the property, the neighborhood, and comparable sales.
What will the appraiser do?
The appraisal is not an inspection, but they will look for any issues that might reduce the value of the home. Part of this evaluation is a visual inspection of the condition of:
- The exterior of your house.
- The interior of your house.
- The size of your home (the most value will be given to the above ground square footage).
- Upgrades in your home.
- Neighborhood location.
- Any desirable features of your lot.
- Any unusual features of the property, positive or negative.
Apart from the condition of the home, the appraiser will also look at
- The comparable sales within your neighborhood or within .5 to 1 mile depending on your property.
- The existence of back up offers and generally how many offers were submitted.
What will they look for?
Particularly government loan appraisers will flag:
- Peeling paint on the exterior of the home.
- Blatant safety hazards like railings missing from a deck.
- Missing handrails going down a set of stairs.
- No running water.
- Non-functioning heating system.
- Detached gutters.
- A fence falling down.
- Peeling paint in homes that were constructed prior to 1978.
- Safety issue such as a missing handrail.
- Broken or unattached gutters.
- Exterior doors that do not open and close properly.
- Exposed wiring and uncovered junction boxes.
- Inoperable heating systems.
- Major plumbing issues.
- Inoperable heating systems.
- Active pest issues. This may require an inspection.
- Leaky or defective roofs or roofs with a life expectancy of less than 3 years.
- Rotted window sills, and wood trim.
- Missing appliances that are almost always sold with a home such as a stove.
- Kitchen appliances that don’t work.
- Bedrooms without windows for proper egress by a person.
- Foundation or structural defects.
- Actively wet basements.
- Evidence of standing water in a crawl space.
- Empty swimming pools or pools that don’t have a working pump.
- Ripped screens or badly damaged screens.
- No pressure relief valve on water heater.
- A fence in disrepair.
What happens when the appraiser finds a deficiency?
We will look at the required repairs, determine if you are willing and able to do them, and if they can be completed prior to closing. When repairs are completed, the appraiser will be called back to review the repairs and provide an approval for closing. We will discuss any other issues should they arise.