But first I'll explain the process because I know how confusing and overwhelming it can be if you have only purchased one or two.
So first you make an offer and that is either accepted, rejected, or the seller makes a counter offer. Either way, let's say you have a contract signed by both parties, which means you are "under contract."
In your contract you have a list of things that need to be done and the dates you have to do them. You can choose these things. For example, we are under contract on a house and on our list are seller's disclosures, inspection, and financing. We have passed the deadline for inspection and seller's disclosures already and that's fine because things are looking great there. This list is there so that if something is wrong with the home or the buyer is unable to get financing, the buyer can get out of the contract without losing the earnest money (certain amount put down with the contract).
Our financing deadline is tomorrow. The bank got the appraisal back yesterday. This is where my annoyance comes.
Back in 2006 and earlier, agents, mortgage brokers, investors, and pretty much everyone else had a lot of influence on appraisers. I remember my agent just telling the appraiser what the house needed to appraise for and the appraisal came back at exactly that. It turned into a problem where home values climbed way too high and the market couldn't be supported. You know this.
Now the bank hires the appraiser. It's supposed to make it so the appraiser doesn't feel pressured into appraising the house for too high, which is a fantastic theory. My problem is that, in our case, the appraiser got to see the contract and the price we offered. The appraisal of the house came back at $*20,000, almost exactly the $*19,000 of our contract.
It's frustrating to me because I would really love to see what the house actually appraises for, not what the bank needs to have. I don't think appraisers should see the contract. It seems like that would make the appraisal more accurate.
But whatever! Not that it really matters. We're buying a house!