An appraisal is simply an independent, third-party valuation of a property’s worth. When you buy a house, your lender uses it to verify the home’s actual value. They want to ensure the house is really worth the money they are loaning you.
So here’s the thing: buying a home is a major financial step. We always sit down with our clients for a full buyer consultation to build a solid game plan. Understanding the appraisal is a huge part of that process.
Why Do Lenders Require an Appraisal?
Lenders require an appraisal to verify their collateral on your loan. At the end of the day, the bank wants to know they are making a safe investment. If they loan you money for a Spokane home, they need proof the house actually holds that value. Because of this, an independent appraiser must confirm the purchase price makes sense for the current market.
Do All Buyers Need an Appraisal?
Most of the time, you will absolutely need an appraisal when you get a mortgage. However, you can sometimes get an appraisal waiver. This happens if you are a really strong borrower buying a really strong property. In that case, the bank uses their internal software to justify the home’s price. As a result, they can give you the loan without ordering a physical appraisal at all.
Who Pays for the Real Estate Appraisal?
The buyer almost always pays for the appraisal during a real estate transaction. In fact, this expense gets bundled right into your standard closing costs. Your lender will quote this specific fee to you upfront. That said, you will know exactly what to expect before the appraiser even visits the property.
Have more questions about the appraisal process? Visit spokanehomeguy.com or call 509-990-SOLD (7653) — we’re happy to walk you through it.
FAQ
An appraisal waiver is an exception granted by your lender. If you have excellent credit and the property is well-documented, the bank’s internal software can verify the home’s value automatically. This completely skips the need for a physical, in-person appraisal.
An appraisal strictly determines the financial value of the home for the bank. Meanwhile, a home inspection looks for physical defects, safety issues, and needed repairs. You definitely want both, but they serve completely different purposes during your transaction.
Your lender usually collects the appraisal fee upfront or includes it directly in your final closing costs. You can find this exact amount clearly listed on the initial loan estimate your lender provides.
If the appraisal comes in lower than the agreed purchase price, your lender will only fund up to the appraised value. You can renegotiate the price with the seller, bring extra cash to cover the difference, or potentially walk away from the deal.
