Does appraisal come before or after closing prep?

Does appraisal come before or after closing prep?

When it comes to the home buying process, there can be confusion about the order of certain steps. In the case of the appraisal, it typically comes before closing prep. Here’s why:

An appraisal is a crucial step in the home buying process as it determines the fair market value of the property. Lenders require an appraisal to ensure that the property is worth the amount they are lending to the buyer.

Before the closing can take place, the lender needs to have an accurate appraisal of the property. This helps them determine the loan amount and ensures that they are not lending more money than the property is worth.

Once the appraisal has been completed and the lender is satisfied with the value of the property, the closing preparation can begin. This includes finalizing the loan documents, coordinating with the title company, and scheduling the closing date.

In summary, the appraisal comes before the closing prep because it is a critical step in the lender’s decision-making process and ultimately determines the loan amount and terms.

FAQs:

1. Can I schedule an appraisal after closing prep?

No, an appraisal typically needs to be completed before the closing prep can begin.

2. Who orders the appraisal?

The lender orders the appraisal to ensure that the property meets their lending criteria.

3. How long does an appraisal take?

An appraisal can take a few days to a few weeks, depending on the complexity of the property.

4. What happens if the appraisal comes in lower than the agreed-upon price?

If the appraisal comes in lower than the agreed-upon price, the buyer may need to renegotiate with the seller or come up with the difference in cash.

5. Do I need to be present for the appraisal?

Typically, the buyer does not need to be present for the appraisal. The appraiser will schedule a time to visit the property with the listing agent.

6. How much does an appraisal cost?

The cost of an appraisal can vary but is usually a few hundred dollars, which is typically paid by the buyer.

7. Will the appraisal affect my closing costs?

The appraisal itself may not directly affect the closing costs, but it can impact the loan amount and terms offered by the lender.

8. What factors does the appraiser consider when determining the value of a property?

The appraiser considers factors such as the size, condition, location, and comparable sales in the area when determining the value of a property.

9. Can I choose my own appraiser?

While you cannot choose your own appraiser, you can request a second appraisal if you disagree with the initial valuation.

10. Can the appraisal be waived?

In some cases, such as with certain loan programs or if the buyer is paying in cash, the appraisal may be waived.

11. What happens if the appraisal comes in higher than the agreed-upon price?

If the appraisal comes in higher than the agreed-upon price, it can benefit the buyer by providing them with instant equity in the property.

12. Can the seller see the appraisal?

The seller typically does not have access to the appraisal report as it is ordered by the lender for their internal use.

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