If having a house appraised (+ inspected), when is the initial offer best made? Etc?

Question

It's in a very small community, in a sort of unusual location, not new, not falling apart. Kind of removed from cookie-cutter houses in suburbs easily comparable to other suburbs. There just isn't that much to compare it to.

Should I hire a real estate appraiser? Presumably, after the home inspector does his job -- but then, when do I make an offer?

What sort of contingencies would be wise to make if I made an offer prior to an inspection (see my other question on that if curious) and subsequent appraisal?

Would we run into problems if the appraisal came out notably higher than the asking price?

Etc. All insight welcome and appreciated.

Answer 1

Depends on what type of housing market you are in and how much you are spending. I would suggest to talk to a real estate agent first. They are in the business of trying to get the house for as little as possible (unless your dealing with a crappy agent). I work for a bank and most agents are pretty honest that I talk to. Good luck!

Answer 2

Is this house for sale? None of your questions mention anything about a listing agent, or "the seller wants $_____ to sell his house". Also, no listing agent in his right mind would allow you to do either an inspection or appraisal on his listing prior to it being under contract. There is lots to risk and nothing to gain on the seller's part.

1- Get the house under contract. YOU get a buyer's agent and have them do a market analysis on the house. That's the same thing an appraiser does, only the appraiser's license makes his value hold water with a lender. Put whatever contingencies apply to your situation into the contract - financing, condition, appropriateness for particular use, etc.

2- Have house inspected. If it's too bad, back out of the deal, otherwise, if there are issues, negotiate repairs or dollars with the seller.

3- If financing is involved, and your lender requires it, NOW comes the appraisal. Even if the inspector said things are good, the appraiser may require particular things to be checked out by specialists in that field if he is concerned. Things like roofers, foundation engineers, plumbing or septic specialists and electrical items are amongst the more common requirements that appraisers may ask for. (An experienced Realtor will often be able to tell you when you're previewing homes if he thinks the appraiser may do this.) As long as the lender is happy with the value and condition given by the appraiser, you're ok on this point. Houses don't appraise for much over the sales price. An appraisal is basically an estimate of fair market value. If a willing buyer and willing seller arrive at a price in a normal market, it's a bit contradictory for an appraiser to say that the fair market value is much over that.

4- Assuming (that's a dangerous thing to do) that you did get your financing in order BEFORE spending all this money and time, you're pretty much ready to close now.

This isn't really all there is to buying a house, but I think it outlines the timing of contract, inspection, appraisal for you.

Good luck with this house. It sounds like you have your heart set on it.

Answer 3

If the appraisal comes out higher than the asking price, you can still offer lower price,if houses aren't moving that fast.

I would make an offer to purchase, with a price, contingent on the inspection...that you can back out of the house if they find any problems, or if you really just decide you don't want it....you can reject for any reason, even reverse polarity on an electrical outlet, if you want.

Id say make the offer first, get an agreement contingent upon the inspection.

The Mortgage company will send an appraiser to make sure the house is enought collateral for the mortgage.