And its appraised value is an opinion of a property’s fair market value. It’s based on the appraisers knowledge, experience and analysis of the property, since an appraisal is based primarily on the comparable sales or comps and most recent sales is one of the prime of the property in question to the subject property, the appraisal usually comes out at the purchase price.
Well, that’s I don’t know that I could say that. So that’s their definition. I’m not positive it normally comes out of the appraised value. That would be an ideal situation to change some of the right in an idealistic setting. It comes out to that. But let’s go ahead and use that in a sentence. The lender was concerned about the appraised value of the subject property.
And so now what would happen is maybe in an increasing environment where property values are going up, the appraiser could be slightly worried about or the property could not appraise. It could create challenges where you have to bring additional money to the table.
The most common issue that we see around the appraised value is that the lender will loan on the lesser of the following to the purchase price or the appraised value. So when that comes in, if it comes in less than the purchase price, then the lender is going to utilize that number, that lower number as the purchase is what the lender based on and off. And that would create a problem, thus creating the appraisal waiver and creating additional things like the guarantee amount that you’re willing to put in there. And there’s just a lot to it.
But I’m glad you pointed out, even if it comes in higher, because we hear that. And then, you know, I’ve been asked several times, well, can we get that money? Can that get applied?
And the lender will always fall based on the lesser of the following.
That’s how they pay your loan on, you know, in the lesser of the two.
But, yeah, very good. Remember, that sounds good to me. Great job. Well, is that all well defined?
This is exciting. Hey, we can’t get, you know, get off here on Monday without mentioning merch store.