If you are in the market to buy a home you should consider hiring an appraiser to help you estimate the value of the home before making the purchase. This can be done either before you make an offer or after and could possibly save you thousands of dollars. If you want to make an offer first and then hire the appraiser simply enter on the contract "Buyers offer is contingent on buyer's appraiser's estimated value being equal to or higher than the purchase price". You should speak to a local attorney for the exact wording that you should use.
By having your own appraiser estimate the value it could save you thousands of dollars on your purchase. If the appraised value is lower than the purchase price you have three options. (1) renegotiate the purchase price, (2) back out of the deal or (3) continue with the purchase at the original price.
In my 18 years as a real estate appraiser I have seen people pay $10,000 to $50,000 above market value. Most buyers never realized they paid too much as their mortgage broker hired a "numbers hitter" (this is an appraiser that will commit fraud and inflate the value of properties). You can't rely on the appraiser that is hired by the mortgage company or bank, even though most appraisers are honest and ethical there are some that will inflate values which will enable them to obtain more appraisal orders from mortgage companies and banks.
Let me give you a quick example of a property that I was hired to appraise a few years ago which saved my client over $30,000. Yes, a $300.00 appraisal fee saved the buyer over $30,000.
The buyer had a new townhouse under contract for $192,000 and he wanted to know the value before he closed on the deal. He hired me and I viewed the property and provided him with a full appraisal report to support my estimate of value. I appraised the property for $150,000. The buyer then used the appraisal report to renegotiate with the seller/builder and agreed on a final purchase price of $162,000. This was more than I believed the property was worth, however the buyer was very happy to get a reduction of $32,000 on the final purchase price.
This buyer was so happy with the honest ethical appraisal report that I provided that he has contacted me a few times thanking me for the help. You can save money to on your home purchase by simply hiring a local qualified real estate appraiser. Don't rely on a real estate agent as they are not trained to value properties, they are sales people and many will inflate the value and tell you what a great deal you are getting, even though you may be paying $20,000 more than it is worth. Hire an appraiser a $300.00 fee could save you thousands of dollars.
Prior to hiring an appraiser take a few minutes to interview them on the phone to make sure they have experience appraising the type of property you need appraised, knowledge of the local real estate market and access to data sources that are needed to complete an accurate appraisal, this includes the Multiple Listing Service (MLS), public records, information from the county property appraiser's office, tax maps and cost resources. This is necessary to obtain an accurate, reliable appraisal. Don't spend money on an appraisal that is not worth the paper it is printed on. Take the time to hire a qualified real estate appraiser.
