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.
In the recession market, it is difficult to get an accurate in a declining market. The forclosures controlling the market also have a bearing on the appraisals. Talk to your lender and agent today.
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.