Home Selling in 95132>Question Details

Pam, Home Seller in San Jose, CA

If the appraiser comes up exactly the asking price, would the bank approve the loan?

Asked by Pam, San Jose, CA Fri Jun 1, 2012

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Irina Karan’s answer
Hello Pam,

When the underwriter decides to approve/deny a loan, they evaluate a borrower based on several criteria - credit history, assets, employment stability, debt ratios, overall indebtedness, stability of residence, size of downpayment, reserves - and the property itself.

If the property is appraised at asking price (and today appraisers are more cautious in their evaluation), it's a good news for the deal. If other parameters are met (which they should be - as your buyer most likely came pre-approved, correct?) - I'd say the loan highly likely will be approved.
VERY HIGHLY likely...

Hope this helps,

Irina Karan
Beachfront Realty, Inc.
1 vote Thank Flag Link Thu Jun 7, 2012
Hi Pam,

You posted your question in Selling. I'm going to assume you are concerned about the buyer being qualified for a loan in the sale of your property. Your listing agent should be able to answer your questions.

I agree with all the answers regarding the appraisal and would like to elaborate on Charles answer that the property has to meet the qualifications. If the Loan is FHA the appraiser is also looking at the condition of the home, such as working appliances, dry rot, non conforming rooms or additions, and so forth. If the loan is a city or government assistant loan they may want want to property to appraise at an amount slightly above the Purchase Contract Price. The lender is also looking at what is in the contract, so if there are high credits to one party or the other that may be factored into the value, either up or down.

Have an amazing day!
Web Reference: http://www.terrivellios.com
1 vote Thank Flag Link Sat Jun 2, 2012
Thank you for your question Pam:

We need some more information. For example, was this an appraisal ordered by the lender for the buyer through a management company or was this an appraisal ordered by someone else?

If the appraisal was ordered by someone else other than the lender for the buyer, the lender for the buyer will not accept that appraisal and will insist on ordering a new appraisal.

If the appraisal was ordered by the lender for the buyer, the lender will accept that appraisal in most cases. However that appraisal is subject to review. If a review of that appraisal is not acceptable, the appraiser will either be required to correct the appraisal or provide further documentation to support the appraised value.

Also, what is the date of the appraisal? If the appraisal is too old, the lender will insist on a new appraisal.

Also, does the property meet the lender's requirements for approval as a source of collateral for financing? The appraised value may be sufficient for the amount of the loan, however if the property itself does not meet the lender's requirements as a source of collateral for financing, the lender may still refuse to accapt that property as collateral for financing.

Thank you,
Charles Butterfield MBA
Real Estate Broker/REALTOR
American Realty
Cell Phone: (408)509-6218
Fax: (408)269-3597
Email Address: charlesbutterfieldbkr@yahoo.com
1 vote Thank Flag Link Fri Jun 1, 2012
The asking price is not the sold price! The sold price is the price a buyer offers. The appraisal is only relative to this.

It doesn't matter if an appraiser likes the asking price, until there is a buyer in contract with the seller.

Let's say you ask for $600,000.

Let's say the buyer offers $550,000 and you accept.

Now the appraisal should be $550,000 for the buyer to get the maximum loan they have been approved to receive.

If the appraisal is lower, the buyer can afford the house if they have cash difference.

The buyer offers -- the amount the buyers offer -- will be the true determining factor of the market value.

An asking price is not the market value. I usually recommend the asking price be slightly below what you believe the home will appraise for -- so that you can generate excitement, be shown as the home with the best value on the market - and sell!

Erica Glessing Nelson
Co-Publisher "Sell Your House Fast for the Right Price" due later this month!
DRE 01425475
1 vote Thank Flag Link Fri Jun 1, 2012
Most appraisals come in at asking price. If you are lucky to have it come in higher then great. You just don't want it to come in lower. That's when things get tricky especially for the buyer.
0 votes Thank Flag Link Wed Mar 13, 2013
Lenders have their own stricter rules and terms for appraisers, what they can use and what they cannot use for the comps..... If the appraisers follow all their rules and terms and have enough comps when the appraiser comes up with the sale price, i.e. the agreed upon final sale price on the sales contract, the bank should be ok with the appraisal....does not mean the loan will be approved just base on that info.

Remember approving a loan, will depend on a number of other factors.....but I agree the appraisal is a very important part, this makes the bank feel ok that there is enough value / equity in the property.

Now what is the down payment of the buyer..... the higher the down payment of the buyer the less
one has to worry about the appraisal.... it is the loan amount the lender is most worried about. And then of course everything else that has to do with buyers credit history, income, correct information on the application for the loan etc. etc.

Good Luck to you, if you need a recommendation for a local Realtor, get back to us here and we
gladly make some good recommendations.

YourRealtor4Life! Your Chicago, Northern Illinois, N and NW subs and the fine homes of the
Northshore Expert with @Properties Northshore, 30 Green Bay Road, Winnetka, Il. 60093
Edith always works in the very BEST interest of her clients, buyers, sellers and investors alike
and she truly goes the X-tra Mile with a SMILE for all her clients

Have a wonderful Day and all the BEST....
0 votes Thank Flag Link Sat Jun 2, 2012
Hi Pam,

If the only issue holding the loan is property appraisal, then the appraisal value should come up to the offered price on the property. There are instances that the property does not approve as much as the offered price, in such cases the buyer has to come up with the difference in two amounts. The bank will only fund upto the appraised value.

Hope with all the answers you have received, you have a better understanding. Your loan broker can give you some straight answers and guide you thru the process. Please feel free to ask any further questions.

Monica Goyal
0 votes Thank Flag Link Fri Jun 1, 2012
Hello Pam,

The appraisal alone is not de facto to get a loan approved.

I am assuming that you already been pre-approved and got into contract to order an appraisal.

To keep it short, you should really be talking to your loan agent and asking what is the loan process and get a very good understanding.

I've put together a very good loan process sheet that could be useful to you. Let me know and I can email to you.

I hope everything works well for you.


Jose adame
Real Estate Broker & Chief Marketing Officer
0 votes Thank Flag Link Fri Jun 1, 2012
Hi Pam, as a general rule of thumb, the appraisal should come in at the price that is offered on the Purchase Contract by the Buyer.
0 votes Thank Flag Link Fri Jun 1, 2012
Yes, assuming you are qualified - I mean credit score, employment history, income, etc.
0 votes Thank Flag Link Fri Jun 1, 2012

The appraisal is a very important part of the loan approval process but an appraisal that comes in at the agreed upon sale price does not guarantee loan approval. The underwriting process also includes updated credit investigation, employment verification, and debt ratio computation. There may be other factors as deemed appropriate by the underwriter.

This is just a summary, by the way. Additional detail should be provided by your Realtor and mortgage professional.
0 votes Thank Flag Link Fri Jun 1, 2012
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