How is a home's value determined? I have an appraisal next week for a FHA Loan and I am worried that it may

Asked by Ali, Las Vegas, NV Sat May 9, 2009

not appraise well because of the market in las vegas today. The home is in the fort apache / gowan neighborhood zip is 89129. Home is 2221 square feet and we are buying it for 165000.00, any ideas from anyone on how it will do?

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Mark, , 89147
Sat May 9, 2009
If it does not appraise for the sale price on an FHA loan, the only choice is for the seller to reduce the price to the appraisal if you want FHA financing. Hopefully your purchase agreement is written so that a condition is the property must appraise for sale value and/or the purchase is contigent on you obtaining FHA financing. If so, I would not be too worried. If the house appraises for lower than the contract price, and the seller is unwilling to reduce price, you will likely be able to get out of contract (depending on specific language of contract) and be entitled to a refund of your earnest money deposit.

You will then be free to look for another property. Even though home prices are reasonable in Las Vegas currently, those prices are not going up any time soon in Las Vegas. The number one rule of purchasing a home (or any property) is DO NOT fall in love with property until escrow is closed. If you fall in love with the property before closing, and unforeseen issues arise, you will tend to make bad decisions in order to get the property. Relax, wait for appraisal to be completed, and analyze your options at that point.
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The Ballen G…, , Las Vegas, NV
Sat May 9, 2009
Hi Ali,

For an FHA loan, you will have no choice but to go with the appraisers value. They are going to be the most accurate anyway. A licensed appraisal will pull the recent sales and property features to determine value. If the home does not appraise, you can ask the seller to reduce the price to the appraised value. It all depends on your agent and how your contract is written. Be sure to ask your agent for help in getting the new price if the house does not appraise.
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