Again, a home appraisal's impact on sellers should be minimal given that sellers typically don't see the appraisal report. Even if they do, a high appraisal doesn't give them the right to cancel the sale unless a contingency in the agreement says otherwise.
If A House Is Appraised Higher Than The Purchase Price
It simply means that you've agreed to pay the seller less than the home's market value. Your mortgage amount doesn't change because the selling price won't increase to meet the appraisal value.
In historical terms, however, appraisal practice has recognized that there are three main methods of appraisal, namely the Comparison Approach, the Income Approach, and the Cost Approach.
Often times engagement ring appraisals or other types of diamond appraisals reflect a value that is inflated – sometimes as much as double the retail purchase price - which allows insurance companies to increase the premium you pay to have your ring covered.
An inflated loan appraisal determines an asking price that is much higher than the market value of the home. An over-inflated appraisal is a type of mortgage fraud that could cause a buyer to pay much more for a home than they should.
No, you do not have to leave your jewelry to have it appraised. We schedule one day per month that our appraiser is in our store so that customers can sit with him and their piece while he does the evaluation.
In most mortgage lending appraisal assignments, the type of value sought is market value. Federal banking regulations define market value as “the most probable price which a property should bring in a competitive and open market under all conditions.”
The Appraisal Institute defines highest and best use as “the reasonably probable and legal use of vacant land or an improved property that is physically possible, appropriately supported, financially feasible and that results in the highest value.” Appraisers typically apply four tests to determine that use.
In a seller's market, where sellers hold more negotiating power, they'll have little incentive to lower their price in response to a low appraisal. In all likelihood, the buyer will have to make up the difference in the purchase price and the loan amount the lender is willing to offer.
If the seller won't negotiate a lower price, you'll be on the hook to pay the difference unless you have an appraisal contingency in your contract.
If the appraised value comes in higher than the purchase price, the buyer's agent doesn't want the seller seeing it. However, if the appraised value comes in lower than the purchase price, you can bet the buyer's agent will bend over backwards to give you a copy! It's all part of the negotiating game agents play.
In the world of property purchases, it's pretty standard for the sales price listed on the contract to be on par with the appraised value. This makes sense, as the agreed price usually mirrors the going rates in the current market.
3.9% of real estate sales fail after the contract is signed.
There's nothing more frustrating than having a buyer back out at the last second. Even if you're lucky and the house sells quickly and above the asking price after a heated bidding war, many things can go wrong that cause a deal to fall through.
A sales contract with a kick-out clause allows you to continue marketing and showing the property. If by the kick-out clause date you find another buyer willing to pay the sales price despite the lower appraised value, you can 'kick out' the original buyer and accept the new offer.
Appraised value, though, is the amount a professional home appraiser thinks your home is worth; it's typically used by lenders when considering a mortgage application. Typically, appraised values are higher than assessed values.
The Uniform Residential Appraisal Report (URAR) is widely considered to be one of the most common forms used in real estate appraisal. The form, which allows for standard reporting and analysis of single family dwellings, applies to a one-unit property or one-unit property with an accessory unit.
If buyers are few and far between when you list your home, there's a chance the market value will be lower than the appraised value. On the other hand, if you're seeing a ton of interest in your home from multiple buyers, you may find that the market value is higher than the appraisal value.
A higher appraisal can improve your loan-to-value ratio, which may lead to better loan terms, such as lower interest rates or reduced private mortgage insurance (PMI) requirements.
One of the simplest and most common appraisal methods is the graphic rating scale. A graphic rating performance appraisal form lists job behaviors, competencies, skills and results and provides five (more or less) rating options ranging from unsatisfactory to exceeds expectations.
Some fine jewelry stores will include an appraisal for free at point of purchase. Otherwise, expect to pay a fee, especially if you didn't purchase your jewelry from the same store that is completing the appraisal. Appraisal fees vary, but typically you'll either pay by the hour or per piece.
The Kay Jewelers Gold Exchange is an opportunity for you to sell your used, unwanted gold and platinum jewelry through a secure program from a company you know and have trusted for years. Learn more about the Kay Jewelers Gold Exchange.