If the buyer for the home you’re selling is getting a loan, there is a good chance their lender will require an appraisal. If an appraisal is not required, we communicate this information to you as soon as we get the information. Unless we tell you differently, please assume the buyer’s lender will require an appraisal. In this post, I will briefly explain the appraisal deadlines and give you some thoughts on what to consider before the appraiser gets to your home.
Changes are made to the Colorado Real Estate Contract every year, so this is subject to change, but as of today, there are three appraisal-related “events” in the contract (found in Section 6). Here are the deadlines and a brief explanation (based on the assumption the buyer is getting a conventional loan):
- Appraisal Deadline: The date the appraisal is technically due.
- Appraisal Objection Deadline: If the buyer is getting a conventional loan, and if the property appraises for less than the contract price, the buyer can “object.” They can terminate the contract or try to negotiate based on the appraised value.
- Appraisal Resolution Deadline: If the property appraises for less than the contract price and the buyer and seller agree to negotiate a resolution, the negotiations must be resolved contractually on or before this deadline.
If the buyer is getting an FHA or VA loan, no matter what dates/deadlines you see in the contract, they mean nothing. There are no deadlines for the appraisal where FHA or VA loans are concerned. See the short video below for more.
Finally, here are some things to consider before the appraiser arrives at your home:
- Similar to the inspection process, having your home clean, tidy, and looking good when the appraiser arrives is a good idea. An untidy home should not technically sway the appraiser, but we also understand human nature. How the appraiser feels about your home can make a difference. If possible, it is best to have your home in “showing” condition. If it’s not possible, it’s OK, but if you’re able, put away any clutter and have the lights on. The appraiser is forming an opinion of the value, and if at all possible, it’s best to put your best foot forward.
- Unlike the inspection, however, the buyer will not come to the house during the appraisal, so it is OK for you to stay.
- If you are there at the same time as the appraiser, feel free to point out improvements and upgrades, but keep the suggestions and comments to a minimum. And don’t suggest what you think the home is worth or ask the appraiser what they believe the appraised value will be.
- If you can’t be home, no problem. The appraiser will be given a code to the lockbox. Appraisers don’t expect you to be present and are comfortable accessing your home via the key in the lockbox.
- Finally, even though we have never personally dealt with any issues, and as we discussed before your home was officially listed, please secure all valuables and account numbers.
Please take a look at the video below for more on the appraisal process in general and FHA & VA appraisals in particular.
