There are different types of appraisal products you can get, from a simple dest-top market analysis to a full interior/exterior appraisal, and several others inbetween. Unfortunately for many buyers, getting an appraisal is usually the last element acquired in the transaction, therefore the need for a contingency clause in the purchase contract. Investors will always determine the market value before offering or purchasing a property, home buyers would be wise to do the same.
The main objective in a short sale situation is for the property to sell as close to the owed amount as possible to reduce the amount of loss for the lender. And most lenders will already know what the appraised market value is and may not accept an offer at that value and opting to foreclose.
A home inspector will check the property for condition and functional elements that buyers and others most likely will not be aware of. An appraiser will do similar for the market area condition and trends, property marketability conditon and amenities, and other things affecting value, when determining the market value.
I'm just assuming that John doesn't have an agent, too!
Eventhough you feel good about the circumstances as they appear to be it may be advisable to consider having an appraisal done. Consider the fact that if you were borrowing a bank would not lend you money without an appraisal.
They take this position to protect their interests......are your interests any different?
Your agent should be able to provide you with a solid CMA, depending on your market you may have to look at the active, pendings and sold listings that are true comparables - then make the necessary adjustments. A good CMA will require a visit to the subject property and detailed information (or visits) to the comparables.
Remember that most CMAs you get for free are done very quickly and not good enough for your purpose - as they are not too accurate. They are only good to give you a general idea.
If you do not have an agent, I will strongly suggest you to get a professional appraisal done. On this market there are many properties that are not appraising.
ABR - Accredited Buyer Representative
This is a tough time for appraisers as it is for all of us in the industry. The appraiser will be looking at the same sales you are for that subdivision/area...and the appraiser will have a difficulty trying to make sense out of the sales numbers just like all of us.
Will the prices go lower ? How will that affect my appraisal today ? Should I go with a lower figure and try to guess what the future holds ?
I had a contract of $ 80,000 in place on a foreclosed home recently. The lender called for an appraisal. It came in at $ 60,000. Fannie Mae ( seller ) complained a lot but ended up selling to my buyer for $ 60,000.
Have you seen the Sold comps yet or just the Asking comps? The fomer should give you a good initial idea of the real value of the home, barring other factors like condition, etc.
Here's Trulia's list of Sold Homes in that Zip Code - it's a BIG list. You may wish to adjust it with # of BRs, etc - to get a better idea of a valid comp for that property.