Home Buying in 92660>Question Details

Tim Johnson, Real Estate Pro in Huntington Beach, CA

Appriase or Not Appraise.....what are the implications?

Asked by Tim Johnson, Huntington Beach, CA Thu Aug 14, 2008

I am buying a house all cash and want to know if it makes sense to get an appraisal now. We are going to finance a portion of it after the fact but want to know if there is a downside to appraising and:
a) Appraisal higher than purchase price (tax implications etc)

Thanks much

Help the community by answering this question:


Always have a home appraised worth $300 - or + .... If any documents submitted to you incorrect you could be overpaying .
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1 vote Thank Flag Link Thu Aug 14, 2008
Since you are paying cash, it doesn't really matter. If you were financing the property and it didn't appraise for the sale price, you would be responsible to come up with the difference. This is why many deals fall apart. People are not willing to pay more than what the appraiser feels the property is worth. Generally the city assessment is based on the purchase price, so if you are paying less than what the appraisal comes out at, you will benefit tax-wise, since your taxes will be based on what is on record for what you actually paid. This is different then say in NH, where the town conducts their own assessment of the property and the price you paid is not considered. For answers to tax questions, you should consult your tax accountant and/or advisor to be sure.
1 vote Thank Flag Link Thu Aug 14, 2008
Interesting Question. I do not believe that in California there are property or income tax implications from a property appraisal coming in higher or lower than the contract purchase price. You should have an appraisal completed for a home your purchase especially in the situation where you are not familiar with homes and properties of that location. If you have a Realtor agent, this person should advise you about this. Please make sure you are using a Realtor agent.

Harrison K. Long
Realtor & broker
Explore Group Properties, Coldwell Banker Previews
Irvine, California
http://www.BuyersExploreHomes.com (The Best Web Site For Property Searching)
0 votes Thank Flag Link Wed Nov 5, 2008
hey Tim.. the only question I have for you is why not finance the loan up front? Typically purchase money loans are cheaper than cash-out loans. And to answer your question.. there are implications NOT to appraise as the appraisal is just there to protect you as the buyer. In a purchase transaction, the house is worth what the buyer is willing to pay for it but in this day and age, it's worth spending $300-$400 for the peace of mind. If you're planning on cashing out within the first year, make sure you save any home improvement receipts as there are specific guidelines when financing/refinancing within the first 12 months.
0 votes Thank Flag Link Mon Sep 15, 2008
I always recommend an appraisal. However, I have had several clients who have decided to purchase a home without getting one. It really depends on whether or not you care what the appraisal comes in at....would you buy the house anyway? One of my clients had been looking for a home and we finally found something that meet all her "wants and needs" including an amazing ocean view....she was paying cash and did not want to do an appraisal. Hope that helps:-)
0 votes Thank Flag Link Fri Aug 15, 2008
Getting an appraisal only makes sense if your curiosity gets the best of you - to know whether you got a good deal or paid too much. You only pay real estate taxes on the actual recorded purchase price.
0 votes Thank Flag Link Thu Aug 14, 2008
I don't think there are any tax implications involved in having an appraisal or not, but there may be tax implications with the deductability of your mortgage interest. Check with your favorite tax expert, but I'm pretty sure there are limits to deductability of mortgage interest when a non-purchase money loan is put on the house later.
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0 votes Thank Flag Link Thu Aug 14, 2008
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