Real Estate Appraisals for Buyers

Buyers who are buying a house should have the home appraised. If Buyer is using a mortgage to fund the purchase, Lender will require that one be done. If Buyer is paying cash, Buyer should have the home appraised to increase his confidence that the asking price for the house is consistent with the value of other homes in the neighborhood.

Appraisals are not perfect. The rules of appraising sometimes make appraisals look iffy. But for Lender, the appraised value sets the amount above which Lender cannot lend on the home.

For example, if Seller is asking $150,000 for the home, and the appraisal sets the value at at lest that amount, fine. But if the appraisal comes back saying the home is worth only $125,000, the bank cannot lend more than some percentage based on $125,000. That percentage depends upon the loan program under which Buyer qualifies.

If Buyer is using a mortgage, and Lender won't loan on more than $125,000, there would be some discussion about lowering the purchase price of the home. Buyer may say, "Look, Mr. Seller, you're asking $150,000 and this appraisal says a bank won't lend on more than $125,000. Let's talk about reducing the price."

Buyer may say that. Let's see what Seller will say next time.

I'm trying to create a more knowledgeable buyer. How am I doing?

I have some other blogs, too. For my thoughts on entrepreneurship, go to www.hatman2.blogspot.com.

Go to www.byandforwriters.blogspot.com if you would like to get a short story published.

For tips on writing and to read my book for free go to www.kearneymusicschoolmurders.blogspot.com.

For a proper connection strategy, go to www.referralbasedbranding.blogspot.com