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What is An Appraisal?

You may be wondering “What is an appraisal anyway and when does it occur?”

If you are, you aren’t alone.  I get asked this question all the time after we’ve made an offer on a house and had the home inspection done.  The rest of the process including the appraisal, underwriting and title are a bit fuzzy to most people.

In addition, you might be wondering:

Does the buyer or the seller pay for the appraisal?
Who hires the appraiser?
Who performs the appraisal?
Who pays for the appraiser?
How much does an appraisal cost?
What happens if the appraisal comes in lower than the purchase price of the home?
These are all great questions! For answers click here for a great article from the National Association of Realtors on Appraisals filled with all of the answers you’re looking for.

So what do you do if you’re the buyer paying $400,000  for a home, but the appraisal only comes in at $350,000? Uh oh. You’ve got a problem and this article does a great job of explaining what your options are in that situation

But what happens if you’re the buyer paying $400,000 for a home and the appraisal value comes in right at the purchase amount price?  Is this a good or bad thing? This is definitely a good thing as it means the bank will give you a loan for the full amount of the purchase price.

But what happens when an appraisal comes in high (where the appraisal amount is over the purchase price) and does this happen very often? No, it’s very rare for an appraisal to come in over the purchase price as the bank just needs to know that the property is worth the purchase price so they feel comfortable giving you a loan.  Therefore, it’s not common for an appraisal to come in over purchase price. When it does, buyers are often very happy as, essentially, you now have instant equity as we got you a great deal! Occasionally though if your home comes in significantly over the purchase price (say $50K or $100K over the purchase price) it can cause problems, which is explained in this article. In this scenario where a home comes in significantly over the purchase price, sometimes the underwriter will wonder if there was something shady going on which allowed you to get such a great deal.

So, as the buyer, all in all it’s best when the purchase price comes in at or close to the purchase price.

Still have a question? Reach out to me anytime at 717.963.0016 or homesalesinyourarea@gmail.com.

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Gina Casner

In 2016, I began my tenure in real estate as a licensed Executive Assistant for a leading real estate training coach and subsequently for high-producing real estate teams. I very quickly fell in love with real estate and by 2019, I transitioned into personally helping clients turn their dreams into keys. After dozens of transactions, I have been dubbed the “unicorn hunter,” finding out-of-the-box solutions for clients looking for a home with unique requirements. In addition to managing my real estate practice, I am involved in providing community education on responsible home ownership through my exclusive Path to Home Ownership workshop series. I also am the founder of Chronically Strong, an organization that promotes mental health awareness and suicide prevention in our local communities. I take a holistic and individualized approach to real estate. Buying or selling a home in Central PA can be complex, sophisticated and often a deeply personal endeavor. Your experience should mimic the high level of customer service all of my clients have, while being very specific to your own individual needs. I work with a team of experts to provide a full, complete experience that only a cohesive team can consistently provide. Working with us, you will be given personal attention in every aspect of your home buying and selling experience with the professionalism and consistency of a thoughtful business model. And yes, superior results will follow! On a personal note, I attribute my success not only to my passion for helping clients execute on their next “big move”, but also to my knowledge regarding the psychology of buying and selling. My clientele works in diverse industries with an emphasis on technology, finance, medicine, law, and business. My real estate practice has grown successfully and consistently thanks to the repeat business of happy clients and their introductions to friends, family and neighbors. This track record is only possible because we deliver both results AND an enjoyable experience. Growing up, my family moved frequently all across the continental U.S., but you will hear me say that I am from California because that is the longest place that I lived during my formative years. Moving became a way of life for my family and each place I lived became a part of my story. It taught me that our home truly is the foundation of everything in our lives, and it is this belief that compels me to work hard for my clients when they are buying or selling their home. In many ways, our home becomes a part of our identity, an identity and memory that should be honored. I have been accused of being tenacious and super honest. I like to win (for my clients) but do so with a calm demeanor and a smile. I live in a raised ranch home in Lower Paxton Township with my main squeeze, my teenage son, and our very spoiled dog, Ginger. I have mad faith, and truly believe that each and every one of us is capable of great things. I graduated from Penn State University with a Bachelors’ in Sociology. There is a running joke in my family that every day I go to real estate school because every day my clients teach me something new. I continually invest time, money and thought into the latest sales, marketing and negotiation techniques. Why? Because I believe that you deserve to have the best working for you. I want to live life on my own terms, and am committed to helping you do the same. Would you like to work together? Please reach out. I look forward to hearing from you! Gina

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