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Friday, March 07, 2014

Home Buyer Tips: Is an appraisal necessary with a cash offer?

An appraisal is a necessary part of the home purchase process if there is a mortgage involved.   The appraisal serves as an estimated market value based on current nearby similar property sales.

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.

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