Wednesday, June 08, 2005

House Appraisal

My realtor called up to say an appraiser would stop by in the afternoon. I immediately had an impulse to run home and clean up a bit, but I quickly realized now that my home is off the market, I don't have to have it ready to show all the time.

The appraiser's purpose is to make sure the house appraises for approximately the loan amount. This is to protect the bank from a bad loan, and also reel in the sometimes crazy bidding that goes on in this area. Read this article for more examples of the hot Seattle home market (I hope the Google cache link stays valid for a while).

If somebody bids too high for the house, then they'll have to make up the difference on their own. So for example if a house that is really only worth $300K gets an offer of $400K, the bank will say hey that is great, but we're only loaning you $300K, so then the buyer will need to come up with the remainder from somewhere else.

It apparently went well. One possible issue is the roof - since it needs repair, it is possible the appraiser would say the home only appraises correctly after repairs are completed. If this were to happen, it just means more paper shuffling to file new financing documents and so forth. However, this didn't come up. He just took a few measurements - apparently square footage is the dominant factor in what a home appraises for - and finished up fairly quickly. As my realtor later described, he didn't ask about the roof, and I (my realtor) didn't point it out. :)

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