appraiser would stop by your house and walk through it for an hour or so. Now, things are much more complicated. The reason for the complication is because the lender has to protect its investment. It is investing in both the home as a financial asset and in the borrower as a client. A smart lender will not loan hundreds-of-thousands of dollars to someone without properly vetting every single aspect of the borrower and the property. While this long appraisal process is happening, a good loan officer or lender will not wait for the appraisal to come back. The good loan officer moves ahead, completing as much of the loan package as possible and submitting it to underwriting. We’ll go over underwriting in the next subsection, but it’s important to note that your loan officer should not be sitting around waiting during the appraisal. There is plenty to do! When the appraisal comes back, your agent should review it to make sure there are not any issues. They need to ensure the value is good and that the property was appraised appropriately. They’ll make sure the appraisal does not require any repairs pre-sale. Should the property not appraise as expected, the loan officer will notify the real estate agents involved in the loan. The agents, the buyer, and the seller, must then work out a compromise or cancel the contract. If the appraisal results in pre-sale repairs being necessary, the loan officer will notify the agents. At that point, perhaps your agent will negotiate having the seller do the repairs for the house in order for it to appraise at the appropriate value. Or, possibly, the price of the home could be adjusted to take into account the repairs you will have to pay for. If not, again the contract can be canceled.
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