512-297- 3442 – www.LetsMoveAustin.com – Austin, TX Real Estate and Investment Specialists.
Appraisals in Austin Real Estate
One important part of the real estate transaction that is often misunderstood or
overlooked by buyers and sellers is the appraisal. This key step in the purchase
process happens virtually behind the scenes, well after the initial negotiation and
the home inspection are over, so it is somewhat understandable that both parties
are focused on the myriad of other details involved with moving. But a good
Realtor is not going to take their eyes off this very important step in the
transaction. Because if a mortgage is involved, the property must appraise at or
above the sales price in the contract in order to protect the mortgage lender’s
interest in the property.
Why Do Appraisals Come in Low in Austin so Often?
In an area with limited inventory and increasing home values such as Austin, this
can be a problem. Many buyers are willing to pay more than the asking price –
and more than anyone has ever paid before – for homes in hot neighborhoods or
starter home price ranges. But appraisers must compare a property to other
homes that have sold within the last year, not properties that are currently on the
market. It can be very frustrating to buyers and sellers alike when appraisals in
Austin real estate don’t come in at the contract price.
How Can We Prevent an Unwelcome Surprise (Low Appraisal)?
At Let’s Move Austin, we have specific strategies we employ to assist with the
appraisal process, which is so critical to our clients having a smooth transaction.
One of these things is to provide an “Appraiser’s Package” in advance and have it
available at the property for the appraiser. This package typically includes plats,
surveys, deeds, HOA documents, floor plans, detailed lists of upgrades and costs,
inspection reports, neighborhood details, and energy efficient features. This can
help the appraiser learn the features of this specific property quickly and
efficiently, and is especially useful when a property is unique in some way.
Will I Receive a Copy of the Appraisal?
Since the appraisal is paid for by the buyer, and ordered through the buyer’s
lender, the buyer will receive a copy of the appraisal. It is always a good idea for
the buyer to authorize their Realtor to see a copy of the appraisal, especially if it
doesn’t come in at value. Sellers don’t automatically receive a copy of the
appraisal, but their agents can request that the buyer share the information.
What if the Appraisal STILL Doesn’t Come in at the Contract Price?
If there are flaws with the comparable properties that the appraiser used, or there is additional information that the appraiser didn’t appear to consider, it is possible for the client to challenge the appraisal. This can be a complicated and time consuming process, and we will work with you to decide if it is the right strategy in your specific situation. Sometimes it is possible to renegotiate the purchase price based on the information in the appraisal. But if you are purchasing with an FHA or VA loan, you have additional protection per the Texas real estate contract which states that the buyer shall not be obligated to purchase the property if the appraisal doesn’t come back in at or above the contract price.
To learn even more about the details of appraisals, we are providing this “Guide to Understanding a Residential Appraisal”
Feel free to contact us if we can answer more specific questions.
Theresa Bastian and the team at Let's Move Austin are ready to help you buy, sell,
lease, or invest in real estate throughout Austin and Central Texas. Call 512-297-3442 to get started today.
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