If you plan to pay cash, is it critical to get an appraisal done before making an offer or is there another way to determine a house's value?

Asked by lizbulasko, Dagsboro, DE Sun Dec 8, 2013

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Debra (Debbi…, Agent, Livingston, NJ
Sun Dec 8, 2013
Whether you're paying cash or looking for a mortgage, you certainly want to have some idea of value before making any offer.

To answer your question -
No, I wouldn't suggest paying for an appraisal now, before putting in an offer...why spend hundreds of dollars if you don't know you will be buying the home?
You can put a contingency in your contract that allows you to have an appraisal done at some point AFTER you reach an agreement with the sellers.
You can require that the house needs to "appraise" at the number you are offering, or, if it appraises for less, you can renegotiate the number with the seller....or walk away.

If you have an agent (and I am going to guess you don't), he or she would do a market analysis for you so you can get a sense what is happening in that market.
You will see the current active, competing listings......and those that are pending, as well as recent closed sales (we call them "comps").
Once you have that information you will see what similar homes are selling for, and be better informed before making a decision on your offer.

If you're doing this on your own, without the benefit of an agent's advice - well then.....best wishes............
2 votes
Noah Seidenb…, Agent, Evanston, IL
Mon Dec 9, 2013
Yes, have your Realtor do a CMA (Comparative Market Analysis) of the areas property in relationship to what you are looking for. This paints a picture of the market and value of the house prices and what the consumer paid in the end. You can see what has sold, is for sale and under contract and get a true picture of where you stand.
Good luck
1 vote
Richard Yost, Agent, Windham, ME
Mon Dec 9, 2013
An appraisal is not neccasary . I would ask an experienced broker for an opinion of value. They use similar if not as detailed methodology to determine the value of the home. If you have absolutely no idea of the value, I would recommend an appraisal., then
1 vote
Debra (Debbi…, Agent, Livingston, NJ
Mon Dec 9, 2013
.........................thanks Liz!
0 votes
Annette Law…, Agent, Palm Harbor, FL
Mon Dec 9, 2013
You have many options.
You can use the values shown on aggregate websites and lose the deal.
Or you can find the tax assessed value, and lose the deal.
You can pay an appraisal, and if in a community of few sales...lose the deal.
Because you are asking your question in a forum comprised of real estate professionals, you actually know the right answer.
By the way, buyers stating 'cash offer' often means, 'Can't get a mortgage and will want seller financing." so being vetted is a good idea also.

Best of Success,
Annette Lawrence, Broker/Associate
Remax Realtec Group
Palm Harbor, FL
727. 420. 4041
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