“It has nothing to do with the seller; it is ordered by your lender, and payment is due regardless of the outcome,” says Maria Jeantet, a real estate agent with Coldwell Banker C&C Properties in Redding, CA. “It is typically paid by the buyer unless specifically negotiated ahead of time to be paid by the seller.”
Because this is a third-party fee, it's not refundable after the inspection has taken place.
The homebuyer (or refinancing homeowner) typically covers appraisal fees as part of their closing costs. The lender will usually order the appraisal and ensure the appraiser's bill is paid, but isn't actually responsible for the cost.
As a real estate appraiser in California, I often hear this question, and the answer is almost always the same. It's the client who pays for the home appraisal.
The buyer pays for the appraisal in every state. The appraisal is for their loan. If you pay cash, which I've done many times, an appraisal isn't necessary.
If the home is appraised at less than your offer and the lender refuses to write a mortgage, you can exit the deal — but, it's possible that the lender will agree to a smaller loan that will meet the finance contingency. The seller can then demand that the difference be paid by you, the buyer.
Because they want to know the truth, buyers traditionally cover the cost of the inspection. If a seller paid, there could be a perceived conflict of interest — after all, they would prefer a flawless report!
Appraisal is lower than the offer: If the home appraises for less than the agreed-upon sale price, the lender won't approve the loan. In this situation, buyers and sellers need to come to a mutually beneficial solution that will hold the deal together — more on that later.
Purchase contracts are legally binding. Unless the seller has a contingency (which is rare), the buyer commits fraud, or the buyer breaches the contract, sellers can't break a contract without consequences.
Consumers have the option of filing a complaint regarding their appraisal or evaluation directly with their lender, or through the lender's federal regulator. Visit HelpWithMyBank.gov for more information about how to contact your lender's regulator and how to file an appraisal complaint.
Ask your lender to let you know about their appraisal waiver requirements. To qualify for an appraisal waiver, you'll need a strong credit score. You'll also need to be purchasing or refinancing a one-unit property, such as a single-family home or condominium.
Yahoo Finance tip: Your purchase contract must include an appraisal contingency, which states you can back out if the appraised amount is too low. Otherwise, you will forfeit the earnest money you put into the deal if you walk.
“In a competitive housing market, where multiple offers are being made on a property, a seller may prefer an offer that waives some or all contingencies,” says Matthew Martinez, CEO of Diamond Real Estate Group in Santa Rosa, California. You can save money if you're paying cash.
Utilize An Appraisal Contingency And Walk Away
If the buyer can't come up with more cash and the seller won't lower the price, the buyer may have no choice but to back out of the sale.
Online value estimators and agent appraisals are both excellent ways to figure out the value of your home for free. If you're a curious homeowner looking for a quick ballpark figure of your home's value, start with a free online appraisal.
Poorly maintained homes or foreclosures have been known to drag property values down significantly. Their negative impact on appearances and security concerns will be taken into account when assessing area desirability levels.
Well, not necessarily. Zillow does have a “Zestimate” feature that attempts to estimate what any given home is currently worth. However, it isn't necessarily accurate and shouldn't be used for appraisals for a number of reasons that are definitely worth a closer look.
3.9% of real estate sales fail after the contract is signed.
One of the most common deal-breakers is when the buyer feels the house failed a home inspection.
Who Pays for the Home Appraisal in California? A buyer pays the home appraisal fee and it is included in the buyer's closing costs in California.
It can take a couple of months between signing a purchase agreement and reaching closing day. For homebuyers, closing is the day they officially take over ownership of the property and receive the keys. For sellers, closing is the day they'll receive proceeds from the sale.
The seller often does not generally get a copy of the appraisal, but they can request one.
You might consider waiving an appraisal if the value of the home won't affect your ability to purchase a home. If you have enough cash to buy a home outright, you might not need to worry. Waiving an appraisal contingency may also be a tactic that helps you stand out in a competitive seller's market.
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.