Property Appraisal Report Unpacked – How It Affects The Buyer and Seller
Typically, the appraised value of a property presented in an appraisal report is a snapshot representing the past six months of what comparable properties have sold within a mile of the subject property. The appraised value does not consider the “present market” or the “future outlook” of the property or the location. Additionally, it does not take into account “what the market will bear,” or what the consumer is willing to pay for a home that meets their family’s needs. It is a subjective report that determines property value by looking in the rearview mirror at the past performance and relies heavily on the preferences and local experience of the appraiser.
When a buyer includes an APPRAISAL CONTINGENCY as a purchasing stipulation in the buying contract, it protects them from paying more than the appraised value and acts as an escape clause for them if needed. If the buyer has an APPRAISAL CONTINGENCY in the contract, the appraisal results become a no-lose situation for them. If the appraisal price comes in at the contracted price the buyer wins; if the appraisal comes in above-contract price the buyer wins; if the appraisal comes in below sales price the buyer wins. It is a real possibility to receive a lower than contracted sales price as the “appraised value” from the buyer’s appraiser. So for the seller, it is important to have proper pricing, appealing property conditions, and favorable contract terms to avoid the unwanted appraisal surprises.
If you or someone you know are considering buying or selling real estate on Florida’s Suncoast, it is crucial to have a trusted and knowledgeable REALTOR to assist you in navigating the process. Please feel free to reach out to me. I am never too busy for your referrals. I live, play and work in Sarasota, Lakewood Ranch, Bradenton, and the surrounding areas. For more useful information follow my Blog at www.DavidMillsRealtor.com/blog or call me at 941.405.3596.