Mortgage companies and banks use the appraisal as a gauge on how much money to lend on a home purchase.
But what if the buyer is paying cash? Is an appraisal necessary?
Necessary, no. Recommended, yes.
Whenever I work with cash buyers in Brevard County, Florida I always advise an appraisal contingency be included with the offer to purchase (also a property inspection contingency).
What happens if the appraisal comes below the purchase price? The Florida Realtors/ Florida Bar appraisal contingency includes these words.
"If the appraised value of the Property is less than the above value, Buyer shall deliver a copy of such appraisal to Seller within 3 days after the above referenced date and deliver written notice to Seller, either: a) terminating this Contract in which event the Deposit paid shall be refunded to Buyer, thereby releasing Buyer and Seller from all further obligations under this Contract; or b) waiving and removing this contingency and continuing with this Contract without regard to the appraised value of the property..."I am not an attorney and the above is not considered legal advice.
The only advice I am providing here - always have an appraisal completed - even with a cash purchase.
Considering buying or selling a home in Viera, Suntree or Melbourne, Florida? Call me if I can assist in any way. If you prefer, send me an email.