How important is the appraisal in the home buying or selling process. Pretty important! I was involved in a recent transaction where the closing hinged on the appraisal. The buyers and sellers had agreed on a price. The earnest money was in escrow, the inspection was done and the "i's" were dotted and the "t's" were crossed. The appraisal was all that stood between the buyers getting a new home and the sellers moving on.
Financial institutions and mortgage companies require an appraisal to be sure that the collateral (the house) that they are lending the money for is worth the amount the buyers and sellers have agreed upon. In this case, the house did not appraise for the agreed upon price.
All turned out fine. The price was adjusted to reflect the appraised value and the transaction did go to closing. But a valuable lesson was learned by both the seller and the buyer.
For the buyer, no matter how much the buyer is willing to pay, if the market won't support that price the sale won't happen. Unless of course, the buyer has cash.
As for sellers, most believe their house is worth a lot. And in terms of memories and value to the seller, it is. But again, the market will determine what the final price should be.
The moral of the story: Be realistic about price when buying or selling.
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