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. Check for any other issues. For example, sometimes the appraiser may note that the property is in a flood zone. If that’s the case, and the contract and the MLS sheet do not indicate that, then the agent will have to address that issue with both the buyer and the seller and work it out. You may choose to get flood insurance, or the seller may reduce the price. They may arrive at some sort of a compromise. If not, the deal falls apart.
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