What's that mean Wednesday: Appraisal Guarantee
The market is red hot, with demand up & inventory down, so buyers are doing whatever they can to make their offer more appealing than the rest. Many are deciding to write an Appraisal Guarantee into their Purchase Agreement. So, what's that mean?
When a buyer is using a mortgage to purchase a home, the bank will do an appraisal of the home to make sure the home value is worth the loan value.
With an appraisal guarantee, the buyer is guaranteeing to make up any gap between the appraised value and the purchase price.
For example: The purchase price is $300,000. If the bank appraisal comes in at $300,000 everything’s good to go. But if the appraisal comes in at $290,000, the buyer will have to come to the closing table with $10,000 to make up the difference.
