If you’re buying a home, you need to know about the home appraisal. You see, while confirmation of the home’s value is the main purpose of the appraisal, it’s not an exact science. And that’s because it’s based on past sales. When we have a competitive marketplace, sometimes homes increase in value rapidly. And it’s possible that the home values rise quicker than the comparable sales values. So what happens if the comparable sales don’t support the purchase price?
Prepare For a Larger Down Payment
Should the purchase price not be supported by comparative sales, you may need to put down extra cash as part of the down payment. It you’re looking at 20% cash down conventional financing, and you don’t have much extra cash, this could be an issue. This is relatively easily solved, however, you could end up paying mortgage insurance premiums.
Before making an offer, look at the home with an eye towards appraisal issues. Especially if this is an FHA or VA loan. Health and safety issues are a primary focus. Look for items that make common sense, such as handrails in stairwells and bedroom egress to the outside. Broken windows and / or doors can raise issues. Are the home’s mechanical systems in working order? Is the roof leaking or are there foundation issues? It’s better to know about these potential issues beforehand.
Inspections and Appraisals
These are two separate procedures. If the appraiser says a home passes, don’t skip the inspection. After all, the appraisal looks at the home’s condition. But an inspection looks at and tests many other things. Getting a home inspected, and not simply appraised, is the best way to protect what may be the largest investment in any person’t life.
When you’re ready to go ahead with the purchase of a home, please call us. We’ve helped hundreds of people find their new home, and we can help you too.
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