Explanation of Appraisal Process
Hi! I’m Matt Padgett with Keystone Mortgage.
Today, I’m going to talk a little about appraisals. First of all, give us a call at the office if you have any questions on appraisals. Let’s talk about two instances.
- Number one is, if your appraisal comes in higher than the purchase price. In that case, we go about the lower of the two. So we would actually use the purchase price in that number to calculate loan to value and not the appraised value if it came in higher.
- But what if your appraisal comes in lower than the purchase price? Well that’s a little more complicated. Because we also have to go lower. Which means we also have to go by the appraisal amount for loan to value.
So there are really four options here.
- You can bring more cash to closing. For example, if your appraisal came in five thousand less, you can bring in five thousand more dollars in closing to make up the difference.
- The seller can actually drop the sales price down to the appraised value. Which in many times is the easiest and the fairest way.
- Or you can meet in the middle.
- when the appraisal does not come in at the purchase price, both parties do have the option to walk away if they would like.
Again for details, give us a call 865.909.0211