I am in the process of purchasing a condo. The purchase price is $210K and the bank's appraisal came in at $215K. Is this bad that the appraisal value is only $5k more? I guess I am wondering if it is wise to purchase something that's appraisal value is not much more than the purchase price?
2006-11-27 04:27:57 · 7 answers · asked by Anonymous in Business & Finance ➔ Renting & Real Estate
No..this is not bad. This indicates a stable market. If the appraisal came in at $250K the banks would not consider the property valued at 250K. The banks will look at the property as $210K. The sale price will also end being used as a comparable for future sales. $210K is the market value.
For resale value and an overall sign of market stability it is good to have a purchase price close to appraised value.
Here is some additional info. Hope this helps.
2006-11-27 04:55:53 · answer #1 · answered by Anonymous · 1⤊ 0⤋
No. The appraisal from a bank's standpoint merely suppourts the loan amount advanced. So, the bank figures what they could get out of the property in the event of a liquidation scenario. In any event, the bank will always loan agst the lesser of purchase price or appraised value. In thsi case, it is good that the value came in a little higher than the price. If the reversse had occurred, the bank would have to reduce the loan amount.....
2006-11-27 06:08:59 · answer #2 · answered by boston857 5 · 0⤊ 0⤋
The appraisal is for the banks benefit. They need to know that the property is actually worth the amount of money that the loan will be for. Right now you have about 5K of equity in the condo. But to answer your question "NO" it's not bad.
2006-11-27 04:37:41 · answer #3 · answered by Michel D 2 · 0⤊ 0⤋
I just purchased a home for $215K. Appraised value came in at $210K. Do I have a problem?
2015-05-29 08:39:09 · answer #4 · answered by Kathi 1 · 0⤊ 0⤋
typically the lender's appraiser knows in advance the purchase price of the unit and the appraisal will come in at or slightly above. you do not want it to come in too high or your taxes may be reassessed at a higher value as well.
2006-11-27 05:53:32 · answer #5 · answered by daniel r 4 · 0⤊ 0⤋
because with a view to shop issues civil, value determinations have interaction in a custom (and that i don't love this custom) the position the monetary company (your monetary company) will tell the appraiser what the contract cost is. you may ask the monetary company now to not practice this training...an appraiser does not favor to confirm a reproduction of the contract, opposite to public perception. His job is to get carry of honest marketplace cost--era. you're rather maximum perfect, it gained't matter what kind of financing you get.
2016-11-27 01:46:25 · answer #6 · answered by ? 4 · 0⤊ 0⤋
i don't think it's bad. they may be including closing costs and other fees into the purchase price.
2006-11-27 04:35:39 · answer #7 · answered by LoriBeth 6 · 0⤊ 0⤋