Before rushing in to buy a house that you fell in love with, and agreeing to pay the price the seller is asking, you should take a step back and do an appraisal. An appraisal gives the correct value of the house in today’s market.
Appraisal is different from the Comparative Market Analysis (CMA) which is done by a real estate agent. Real estate agents use their knowledge of the local market based on the info available to them in the multiple listing service (MLS). The fact is appraisals are more reliable and accurate in establishing true value of the house.
Who Pays for Real Estate Appraisals?
Appraisals typically cost between $375 and $500, but appraisers will charge additional fees if they need to make multiple visits to the property for any reason. It is usually paid by the homebuyer. When there is a financing company involved, they will collect the cost of appraisal from the homebuyer upfront. Even if the appraiser’s fee isn’t collected upfront, the cost will be passed on to the homebuyer as a closing cost for most financing programs.
Typically the financing company orders the appraisal as soon as it receives the signed purchase and sale agreement in Massachusetts. In Massachusetts, it is important that the homebuyer receives a satisfactory appraisal prior to the loan commitment date.
If in the opinion of the appraiser the home’s value is less than the agreed-upon purchase price, the homebuyer’s financing could be in jeopardy. Either the lender will deny the loan or will require the homebuyer to increase the amount of their down payment by the difference between the agreed-upon price and the lower appraisal value. If the homebuyer does not have the available cash to increase the amount of the down payment, the buyer will need to cancel the transaction before the loan commitment deadline.
Questions? We Love To Hear Your Questions, Contact:
Shahclan Boston – OwnerFinance
Boston, MA – USA
Phone 617-787-5151 (Landline)
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