Once we have determined that
there are no defects on title and all inspection concerns have
been resolved, it is time to order an appraisal. An appraisal
is an estimate of the value of a property, made by a qualified
professional called an appraiser. An appraisal of the property
you’re going to purchase is as important as your credit
history in obtaining a mortgage, and it is also a critical factor
in determining the size of the loan the bank or Mortgage Company
will approve. After all, the property you are purchasing serves
as collateral for the loan. Although the primary goal of the appraisal
is to justify the lender’s investment, it also protects
you from overpaying. The lender usually hires the appraiser and
charges the buyer a fee for the service. You will be refused a
mortgage, or offered a smaller amount on the mortgage, if the
appraisal falls short of the amount you wish to borrow. Your contract
will be contingent on whether the property’s appraisal comes
in at or above the purchase price you and the seller have agreed
upon.
If possible, you will want to complete your
home inspection prior to ordering the appraisal. There is no sense
in paying an appraisal fee if issues resulting from the inspection
cause the contract to be terminated. We will negotiate any major
repairs such as a roof or furnace prior to ordering the appraisal.
If we just have some small repair concerns, we will order the
appraisal the day that we finish inspections and negotiate repairs
after we have a VC (Valuation and Conditions) sheet.
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