Home Buying in 08550>Question Details

Aj, Real Estate Pro in 08550

Appraise a house before buying it ?

Asked by Aj, 08550 Tue Aug 9, 2011

Hello,
I am looking to buy a house in a community built about 40 years old. The models are all different and even the level of upgrades are different. It is not easy to do an accurate enough comparison with other recent sales. Can I hire a professional appraiser to appraise it for me ? Any references ? Does the seller allow such a request in general ?

Many thanks.

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While you could hire an appraiser, I would suggest you'd be wasting money. Assuming you're working with a buyer broker (and you should be) they can prepare a CMA for you on the property you're considering.

As part of your contract, there will either be an appraisal contingency (if you're getting any type of financing this is 100% certain) or if you are buying in cash your agent can insure that you gt a n appraisal contingency. If you're financing then a large part of the mortgage application fee the lender is charging you is for an appraisal and you are entitled to receive a full copy of the appraisal report. In either instance should the home fail to appraise for at least as much as your contract price you will be permitted to either walk away from the deal without penalty or the Seller may elect to reduce their price to the appraised value. (This is typically what happens)

Most sellers are likely to be reticent to allow you to have an appraisal done prior to being under contract with you and you should always be leery of doing this, remember it's a two edged sword, and could come in for a higher number than the Seller might have accepted.

Good Luck.
2 votes Thank Flag Link Tue Aug 9, 2011
Please elt me give you some info about Appraisals:

Visualize a series of COLUMNS, probably 4 or 5;
The First Column is the SUBJECT HOUSE and the others are COMP's.
Down the page we list FEATURES or FACTORS; such as # Bedrooms, # Baths, House Sqft, Lot Sqft, Fireplace, Pool, Roof, Garage, Fencing. Got it?
Now, in each box created, there will be a VALUE: Lets say the subject house is 915 sqft it would get --- or 0. And the first Comp house has 2500 sqft, it might get -100,000; which means that the house is WORTH $100,000 more because of the square-footage. (It is a negative number because the Selling price of that Comp house was approximately $100,000 more BECAUSE of the square footage and we have to deduct that $100,000 to bring them to equity.) Got it?

Now, lets say that the Subject house has $5,000 worth of new fencing and the Comp house has 25 year old OK fencing.: Then the SUBJECT house would get +5,000 and the Comp. house would get --- or 0.

When you go down the page, and enter everything, you get total Comparative Values on the two houses, which allows for the DIFFERENCES.

The two houses DO NOT have to be literally COMPARABLE, we MAKE then comparable with the VALUES.

So the house next door is larger, so what? We made up for that with the values.

Now, if you understand what I just did, then you will understand why;
1.) Two Appraisals will come so close together, and,
2.) Why the Bank will not listen to you about the results.
and in fact I will give you a third;
3.) If you hire your own Appraiser, he will end up with about the same numbers!

What you really want to do right now is enlist the aid of a Realtor to do a CMA;
This will cost yoy nothing and will tell you what you need to know.
A Realtor uses similar methods and numbers to arrive at similar conclusions.

Good luck and may God bless
1 vote Thank Flag Link Tue Aug 9, 2011
Hello Aj,

I would not advise paying for an appraisal prior to buying the home. Once your offer is accepted the lender will send an appraiser of his own and you have will have incurred an unnecessary expense. Even though there are models that aren't an exact match, your realtor can do a CMA (Comparative Market Analysis) she can give her opinion of the property's value based on the condition, square footage, lot size, number of bedrooms, upgrades, etc... compared to the most recent home sales within a mile and base your offer realitively close those values.

Blanca Dover, REALTOR

Century21 Hometown Realty
Cell: 805-427-5646

Website: http://www.blancadover.com
0 votes Thank Flag Link Mon May 13, 2013
Hi Aj,

If you're working with a savvy agent, they would know which lenders would work best with your Home of choice.
Appraisals are usually outsourced by lenders.

Lender guidelines on appraisals impact their loan decision.

Typically, lenders accept appraisals conducted by their own approved set of appraisers/appraisal management company , so your hiring an independent appraiser may not really help here.

Shalu Thaman - Realtor,ePRO
Keller Williams Princeton Real Estate
Cell # 609.577.5861
http://PrincetonHomeNj.com
http://www.linkedin.com/in/shaluthaman
http://www.facebook.com/PrincetonNJhomesforsale
0 votes Thank Flag Link Mon May 13, 2013
I agree with Larry that Appraising home before hand is an added expenditure and could potentially backfire.
Your Realtor can help you get a CMA and your Lender will be doing an appraisal anyways.

Best,
Sweta Ganai
(609) 606-5077
0 votes Thank Flag Link Tue Apr 2, 2013
Way back, when I wore a younger man's clothes, the reasoning behind doing an Appraisal was to find the Worth or Value of a Property:
This was before Computers, before Real Estate Websites, even before calculators>
The Appraisers were truly independent, on no one.

Then we had a BUST in the Real Estate market, and the objectives changed:
The Appraisers were hired by the Bank to protect their interests. We didn't have a formal contract between them, but they both knew that the Appraisal had to be extremely conservative. The Appraisers had to do it that way, or they wouldn't get any assignments.

Nothing wrong with that; nobody wants to get into the trouble we had by having 125%+ Loan to Value ratios!

An Appraisal costs you about $400 and while it would be good for telling you how much your house is worth, it wasn't good for anything else! It was not transferable to anyone else, it had a short time limit, (90 days) and it was YOUR Appraiser, not theirs.

The alternative is having a Realtor do a CMA, (Comparative Market Analysis) which is almost as intense as am Appraisal, will yield approximately the same numbers, and does not cost $400.

We Realtors want to do them, because it exposes us to potential clients, it helps us learn and keep up on our beighborhoods, and it helps YOU, our clients.

If you want to feel better about the VALUE of the CMA, (who wants free advice/), you can give your Realtor a Card for dinner at a nice restaurant; very good idea!
0 votes Thank Flag Link Fri Aug 12, 2011
The combination of a well produced CMA to guide the offer and negotiations and a bank appraisal to support the mortgage should give you the comfort and assurance I think you are looking for. And to Larry's point, appraising before hand is an added expense to you that could backfire.

Best,
Jeanne Feenick
Unwavering Commitment to Service
Web Reference: http://www.feenick.com
0 votes Thank Flag Link Fri Aug 12, 2011
If you are currently not working with an agent of your own, consider the idea, he/she will best advise; if paying with a mortgage, keep in mind the lender will also do an appraisal of their own, however if you still wish to have a separate appraisal make sure the seller is aware, and is willing allow the appraiser into the home; if you do have an agent consider a consultation...
0 votes Thank Flag Link Tue Aug 9, 2011
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