Appraisals and how they affect buying San Francisco real estate
A reader asks:My friend is the buyer of a home which is supposed to close in 20 days from now. She mentioned the appraisal came in too low. I'd like to understand more about the process of an appraisal and what her next steps are in purchasing this home.
Our reply:
Depending on the lender or mortgage broker, some officials will simply order a different appraisal from a different vendor. In other situations, the appraiser may need to include more comparable sales examples to fit the subject property (your friend's house). In still other situations, it may mean the buyer has to pay cash for the difference between the loan amount being granted and the purchase price.
This is one reason why an appraisal contingency should be written into the contract so that if the property does not appraise for the value needed by the bank, the buyer has a legitimate reason for canceling the contract if they do not want to come up with the cash to make up the difference.
- Kathleen Macdonald
posted by SFResidence.com @ 12:48 AM
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