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let's answer this in simple terms. story 1: You are looking for a home. You find yourself a good agent who helps you find financing(because no appraisal is needed for cash purchases) & low and behold; you've found your dream home! You make an offer through your buyer agent who helps negotiate the price to something reasonable. The inspection goes well thanks to the great inspector recommended by your awesome Buyer agent! You now you go into contract with one of the lovely attorneys that your Buyer agent recommended. Title and an appraisal are ordered and sent to the recommended companies. Everything comes back great! In-Fact you got the home at such a great price appraisal came back above by $30,000.oo; So you call up your Recommended mortgage broker and ask to borrow closing, Which they do without fail. you set your closing date and move in! Congrats you are now a home owner!
Story 2: you walk into an open house sign a sheet, make an over priced offer goto your bank pay a high interest rate. appraisal comes in bad (over by $55,000.oo) You need to put up the difference of $25,000.oo cash + closing costs $30,000.oo and pay $300 more a month for 30 years all because you didn't ask for free help.
But you are asking for help, so your a smart guy. and smart people like you work with buyer's agents. If you like help find one I would be more than willing to assist. I'm no where near albany so I have nothing to gain from this. But I do have contacts up there!
Appraisal is required for financed buyers. Appraisals can have two issues that make them "bad;" the first, the appraised market value is lower than the purchase and sales agreed upon price; second, the appraiser notes repairs to the property that need to be done and makes the value of the home "subject to (completion of repairs)"
The first situation, usually ends up in the seller lowering the price, but in hot markets (Seattle, where I am from) the buyer has the chose to pay the difference of Purchase Price and Appraisal with cash.
The second, if the appraisal is "subject to..." repairs, they will need to be repaired PRIOR to the lender closing the mortgage. No way around this one!
Hope this helps.
Hi Marceline. For you to move your property, the bad news is that you have to lower the price. The good news is that you can hold off until those areas in the appraisal report are addressed promptly for you to get a good value next time round.
Please note the content is not intended to be, legal or investment advice. You should consult a licensed attorney or realtor for advice regarding your individual situation."
A appraisal is the market value of your house, In the case if appraisal comes out lower then selling price you will need to bring price down to appraised value to be able to close transaction.
An appraisal's primary purpose is to show the fair market value of a particular home based on homes that have sold similar to the subject and in the same area. If an appraised value comes in lower than the price or mentions required repairs, then typically the buyer tries to negotiate with the seller for the lower appraised value as it is tough to pay more than the appraised value. if the property has repairs that need to be completed, they would either need to be repaired satisfactorily prior to closing or you would need to get a renovation loan.
I hope this helps
Your lender wants to make sure the home they are lending on is worth what you agreed to pay for it. An appraisal is the appraisers opinion of the value of the home. They use the details of your home and compare it to what similar homes have sold for in your area. If it comes in lower then the purchase price it can kill the deal. A lender won't lend on more then the home is worth. Sometimes the buyer will bring in extra money to make up the difference between the purchase price and the appraised value. Have your Realtor do a CMA for you. They should have a pretty good idea of what the value should be.
if you are doing a FHA or VA loan, another part of the appraisal is making sure there aren't any VA/FHA required repairs. Ask your agent if they see anything that concerns them. Good luck. I hope your purchase goes well.