​What San Antonio Homebuyers Should Know About the Real Estate Appraisal

While both the home appraisal and the home inspection are designed to evaluate a property before purchase, the two serve very different purposes. 

The Home Inspection vs The Home Appraisal

A home inspection is intended to assess a home from a safety and structural standpoint. The inspector will take stock of all the systems, appliances, doors, windows, walls, and even the foundation and roof of the home in order to let a buyer know if any issues exist before they decide to buy.

An appraisal, on the other hand, is more of a value-based assessment of the property. Instead of looking at the very detailed components of the home, an appraiser looks at the bigger picture: What is the home is worth? How does it compare to other properties (also called comparables) in the area? 

What’s the Point?

By the time an appraisal is done, the buyer is well into the purchasing process. This means they’ve already seen the home and made an offer that has been accepted by the seller. So...isn’t it a little late to be assessing the property’s value?

Nope! The goal of this process is simple: the lender must ensure that the home is actually worth what the buyer offered.

Let's say a buyer put in an offer of $150,000 on a home. The seller has accepted, and the sale is moving forward. Once the option period has ended, the buyer’s chosen mortgage lender will send out an appraiser to evaluate the property, putting a number on its overall worth. They’ll take into account the market, comps, any upgrades the seller has put on the home and the depreciation of the property.

If the appraised values come in lower than a buyer’s bid, the mortgage lender will only pay up to the appraised value – nothing more. In this case, a buyer has a few options:

Renegotiate the deal. The buyer can go back to the seller and try to renegotiate a lower price – ideally, one closer to the appraised value of the home.

Pay the difference. If a buyer offered $150,000, but the home only appraised at $130,000, they would need to pay the $20K difference out-of-pocket.

Purchase a second appraisal. Though it will be an out-of-pocket cost, buyers can hire a second appraiser to evaluate the home and (hope the new valuation is a bit higher!).

Ask the seller to refinance. Though it’s not very common, some sellers will “loan” the difference to the buyer and let them pay it back over time, plus interest.

The appraisal is just one of many moving parts in the homebuying process. Make sure you have a qualified San Antonio real estate agent by your side to walk you through every step. 

Buying A Home

Search Homes For Sale