What Do You Need to Know About Home Appraisals in 2022?

Home Appraisals in 2022 is a very controversial topic. There are a  lot of people who are going way over asking the price when it comes down to appraisals. So here's what you really need to know about Home Appraisals: 

 

They are opinions of value

Home Appraisal is just an opinion of value, a snapshot in time. This means, what the house appraises for today is going to be very different than what it could appraise for the next six months.  When you’re buying a home and you’re going through the appraisal process there are things that you can do when you write an offer: 

1. You can fully protect yourself 

Meaning that the house has to appraise for the value that you offer. For example, if you offer $300,000 on a $280,000 home and the appraisal comes in shorter let’s say $290,000, I can walk away because I know that I have fully protected myself. You can also 

2. You can partially waive the appraisal. 

This is how you can protect yourself partially. Let’s say if I own a $280,000 home and I go $300,000, then I’ll move forward as long as the house comes in at $290,000 which means if it comes in short at $290,000, I'll bring $10,000. If it comes in at $295,000 I'll bring an additional $5,000. Now, this additional money is on top of your downpayment and your closing cost so keep that in mind before you do something like that.

3. You don’t care what the home appraises. 

This is one of the big dollars out there who says you know what I got money. There are people who would say I don't care, I want this house, I want it so bad, I don't care. I am going to go $300,000 and I’m going o pay you $300,000 regardless. Here's the thing about that: this will really help you win the offer. However, if the appraisal comes in at $295,000, you will need to bring an additional $5,0000. If it comes in at $280,000, you will need an additional $2,000. Basically, you don't care what the home appraises for because you will still bring the money regardless of what it appraises for. 

 

Here in Texas, you can fully waive your appraisal and pay for conviction alone with an Appraisal

Document. For FHA and VA, it's a little bit different because they’re more by the mandatory clauses which say that the bank can only lend you to the amount that your home is going to appraise for. This is true for any loan. However, this also gives you an out with those two particular loans so. What that means is that, in any loan, if your house comes in at $290,000 and you go $280,000. The bank can only lend you the amount with the home is worth via the appraisal. 


For my home sellers out there, you need to understand this when you take an FHA and VA offer, the appraisal stays with your home up to 90 days. If an FHA buyer tries to buy your home, you accept that offer an appraisal comes in that once again at $280,000. Any FHA or VA Buyer that you go forward with after that they're not getting to appraisal it's not going to be valued differently from the FHA or VA, it's still going to be $270,000. With Conventional Buyers, it's going to be a different story the appraisal stays with the buyer. What this means, that a conventional buyer comes in at $270,000. We don't like that. We want to separate and do something differently. The buyer goes up separate ways than the seller. You get another conventional buyer and it comes in $290,000. it is very common that appraisal can be that different because it's an opinion of value. My opinion is my opinion. 

Basically, that's how appraisals work. Let me know if you have any questions, feel free to give me a call. My number is 817-668-03.