The Appraisal

The appraisal is the process used to protect the buyer, the seller, and the lender, when there is one. It is designed to verify the value of a home.  For lending purposes, it is used to secure a loan - to satisfy the lender that the loan the lender is extending is fully backed by the property's value. The Buyer may choose to buy the property even if it hasn't appraised for the purchase price offered. However, the lender will only provide a loan based upon the appraisal valuation. So, the Buyer will probably have to come out of pocket to cover the difference. Alternatively, the Seller may elect to lower the sales price. If no agreement is reached the contract is considered null & void.

In New Mexico, an appraisal is usually paid for by the seller; but this is negotiable. It is a measure of the property's dollar value based upon the size, features, quality, condition, and location of the property - as well as supply and demand - based upon a comparison to the purchase price and terms of sale of other similar, nearby properties that have sold within recent months.

While an appraisal is extensive, it does not cover a technical analysis of construction, structural stability or compliance with building requirements.  These aspects are covered during a home inspection.

The best way to find an appraiser is to get a recommendation from your lender or agent. Indeed, as your lender may only "recognize" the work of certain appraisers, it is a good idea to consult with your lender before anyone else.

Michael Spottiswoode

Fax: (888) 500-9590~ Cell (505) 307-0497