Let’s say you’ve been trying to buy a house and, even though you have a sizable down payment, you’re having trouble making the winning offer. The real estate market is competitive for buyers right now — and it has been since early 2020. Knowing that you’ll need a little something extra to make your purchase offer stand out from the rest, your agent suggests talking to your mortgage lender about a built-in appraisal waiver. An appraisal waiver can give you a competitive edge, but you’ll want to know exactly what it is, how to get one, and whether it’s a good idea. Fortunately, we’re here to help! Here’s what you need to know about appraisal waivers. An appraisal is an assessment of a home’s value, carried out by a trained and qualified appraiser who functions as a third party in the transaction. Banks don’t want to loan more money for a house than it’s worth, so when you’re getting a mortgage, your lender will order an appraisal to verify the value of the home. If you’re paying cash, there’s no outright need for an appraisal unless you want one simply to satisfy your own curiosity about the home’s value. How do appraisers figure out what a house is worth? Appraisers use comparable properties and their understanding of the current real estate market to determine the value of a particular home. As with everything in real estate, there are lots of variables. There’s no hard-and-fast formula an appraiser can use to determine a for-sure, indisputable value — so instead, they use the most current and relevant information available to them to make a fair assessment and report back to the lender.What’s an appraisal, and why do you need one?
