Appraisal could be deal breaker. Of course that is true in any Real Estate transaction where lender is involved. But in FHA stakes are a little bit higher. Do not forget that you are borrowing 96.5% of the house value. So both: bank and government (who insures loan for your lender) want to make sure that contract price equals value. Also, don’t be surprised if value comes exactly at contract price. This is something I don’t understand myself, but very rarely Appraiser puts higher value in evaluation. And unfortunately in rising market it happens that value actually comes lower than purchase price. Why? Appraiser compares properties similar to home you are buying that sold in last three to six months within distance of one to two miles. There are usually three comparables. When you look at evaluation, you will notice also properties available for sale right now, but those are not considered in evaluation. So that is why we have issues. In growing market prices are going up every week. And something that sold three months ago is not going to necessarily mirror value today. Appraiser is going to mention in report that we are in appreciating market, but most likely will not adjust price. “Funny” thing is that when our market was collapsing such adjustments (depreciating market) were made all the time. Well...There is also matter of condition of the home. I wrote about that in my second article (blog), so I will just remind: appraiser is going to mention any health and safety issues of the property and those are going to have to be addressed before closing. Be prepared.
Call Anna Chroscicki at 772-485-4188
email anna@annasellsrealestate.com
Visit www.annasellsrealestate.com to search all listings on MLS.
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