We all know the headache of waiting for an appraisal to come in. If lower than expected, they bring, at best, additional cost and complication to the buyer. At worst, the whole deal can fall apart. 

With a recent case of appraiser bias in the news, more agents and consumers are wondering if there’s a better solution to the current appraisal process. 

Why should one person’s opinion on a home’s market value be the final word? This is the stuff that keeps buyers up at night, along with plenty of sellers—not to mention agents. 

So, what is Tomo doing about it? 

Tomo Appraisal Coverage

Tomo is launching a new service for homebuyers: an Appraisal Coverage guarantee that will take the bite out of those last-minute low-ball appraisals. 

Eligible borrowers can lock down their closing costs, monthly payment, and interest rates on a winning bid—even if the appraisal comes in low. This is the first appraisal coverage of its kind. 

If that sounds familiar, it should. Tomo Lock & Shop is another first in the mortgage industry, allowing buyers to lock down a particular mortgage rate — without a property address — so they can shop for homes without the fear that rates will go up. 

Tomo’s Appraisal Coverage guarantee takes that a step further, serving eligible borrowers who have a particular property in mind, so they can move forward with the homebuying process without the fear of losing the deal or paying more than expected because of a low appraisal. 

According to Greg Schwartz, Co-founder and CEO of Tomo, about 14% of homebuying transactions are impacted by low appraisals. 

And with the current inventory shortage, buyers are already contending with double-digit home price appreciation, not to mention higher mortgage rates. 

When Tomo’s Appraisal Coverage guarantee launches next month (September 8th), eligible homebuyers will be able to close a sale with the same closing costs, monthly payment, and mortgage rate they’d planned on—regardless of the appraiser’s estimate.

Peace of mind and protection for buyers

This is huge—and not just for buyers. 

Granted, anyone buying a home will benefit from the peace of mind this offers. But sellers, too, will appreciate that a last-minute appraisal will no longer be able to ruin an otherwise viable deal. 

Agents invested in their clients’ success in buying or selling a home will also be freed from the headaches caused by last-minute lower-than-expected appraisals. 

How can buyers qualify?

So, how can homebuyers qualify for Tomo’s Appraisal Coverage guarantee: 

Per Tomo’s website, buyers must meet the following four conditions: 

  • Underwritten Pre-approval — Home buyers must have an underwritten pre-approval from Tomo Mortgage before making the offer
  • Verified Address — Before the offer, the agent will run the property address through a verification process with Tomo
  • Tomo Partner Agent — Buyers must work with a Tomo partner agent
  • 10% down payment — Buyers must pay a minimum 10% down payment 

Check out their Terms and Conditions for more information. 

Top takeaways for agents

If you are in one of the nine states Tomo is currently operating in—Colorado, Florida, Georgia, Michigan, North Carolina, Ohio, Texas, Washington and Connecticut—you can sign up to join Tomo as an Appraisal Coverage partner to ensure your homebuyer clients will have access to this program. 

Those in other states can stay on the lookout, as Tomo is expanding to more areas soon. 

Appraisal Coverage officially launches on September 8th, 2022, but underwritten pre-approvals are available immediately. Let your clients know, so they can start the process today.