First time homebuyers who are paying cash will not need an appraisal to close on a purchase, but many do call us to request an appraisal for a third party professional opinion. If financing is involved, the lender will require payment in advance for an appraisal, this fee is typically $400.00 to $600.00, depending on what type of property and where it is located.
The appraiser will be chosen based on a rotating list, which hopefully includes local, full time appraisers who know the area in which the property is located. It is important to note that the borrower does not become the client of the appraiser, even though the borrower is writing a check to the bank.
Our fiduciary relationship in this case is actually with the lender, the lender becomes our client as the lender engaged us and will ultimately pay us at closing. I would offer a few tips for homebuyers regarding the appraisal process.
First, ask to meet the appraiser at the house if that is feasible, verify that the appraiser is a full time appraiser with knowledge of the market in which the property is located.
Do not try to influence the appraiser in any way, but do make an effort to understand how the appraisal process works. If I meet a buyer at a home, I usually ask, “why did you choose this home and what else did you look at before you chose this home?”
In essence, we are to place ourselves in the buyer’s shoes when choosing comparable sales. In other words, if I could not buy the subject property, what other options are available. A good appraiser will look at the property from a 360 degree perspective, cover all of the angles and render an opinion supported by factual data in the subject’s market.
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