Is an Appraisal needed on cash deal & new construction? (sales, real estate) - Raleigh, Durham, Chapel Hill, Cary - North Carolina (NC) -The Triangle Area - City-Data Forum

chukkles77 · 12-13-2007, 02:52 PM

I'm in the process of purchasing a new construction home. The original price was $214,500, but we agreed on a price of $185k if we close by year-end. It's going to be a cash deal and my RE agent is telling me that she really doesn't think I need to get an appraisal. I was adamant about the inspection, but she said the appraisal would only be a waste of money because she really believes it would come in above the $185k. I'd like to know if I'm being overly cautious in insisting on an appraisal - am I being over the top? Also, is it safe to go with an appraisal company that my RE agent recommends or should I find my own? Thanks.

chukkles77 · 12-13-2007, 02:55 PM

Does anyone have an appraiser or appraisal company that they'd recommend? The home is new construction in Johnston County.

tluv00 · 12-13-2007, 03:00 PM

Quote:

Originally Posted by chukkles77

I'm in the process of purchasing a new construction home. The original price was $214,500, but we agreed on a price of $185k if we close by year-end. It's going to be a cash deal and my RE agent is telling me that she really doesn't think I need to get an appraisal. I was adamant about the inspection, but she said the appraisal would only be a waste of money because she really believes it would come in above the $185k. I'd like to know if I'm being overly cautious in insisting on an appraisal - am I being over the top? Also, is it safe to go with an appraisal company that my RE agent recommends or should I find my own? Thanks.

You are paying for the house so you get what you want. Pay for an inspection AND appraisal. With that big of a gap in original price and sales price they may try to cut corners to save profits. Tell your agent to pi$$ off and get them done. Better to be safe in this situation. Good luck.

Stu Barnes · 12-13-2007, 03:44 PM

Appraisal would be to protect your investment......don't want to overpay, but you should be able to judge from comps at that price level...
Lenders require, but if paying cash....it's up to you. My brother is an appraiser in the area...dm me if anyone would like his information.....

LoraK · 12-13-2007, 03:50 PM

I would absolutely get an appraisal, and like tluv00 said, an inspection too. It's not at all a waste of money. I work with a few really good appraisers. PM me if you would like their name and numbers.

sundaze · 12-13-2007, 03:53 PM

If nothing else an appraisal is worth it for your peace of mind. The very fact you are asking shows you should have the house appraised. It is something you pay for -- I am not sure why the real estate agent is advising you against it. You will sleep better at night knowing you are not paying too much. Let us know how it turns out.

ch123 · 12-14-2007, 12:37 PM

Quote:

Originally Posted by chukkles77

I'd like to know if I'm being overly cautious in insisting on an appraisal - am I being over the top? Also, is it safe to go with an appraisal company that my RE agent recommends or should I find my own? Thanks.

The appraisers generally go for the "target price" and try to justify that value in the appraisal. So it would be very easy to influence the value if the appraiser knew what you paid for it. So go with an independent one and find one yourself.

rcarrillo · 12-14-2007, 09:31 PM

An appriasal will cost you all of $300-400 depending on the home size, location and the extent of the appraisal you want.

Is it worth $300-400 when you are paying $185,000 for a home to make sure this is a good investment?

Regardless of what the Realtor says or is "common sense", it is a matter of risk. Would you rather save the $400 and risk that the home was only worth $175,000? As a mortgage banker/broker I would personally choose to minimize the risk.

chukkles77 · 12-21-2007, 09:24 AM

In case anyone is following this, I wanted to let you all know I went ahead and got the appraisal and I'm very happy that I did. My agent told me it wasn't necessary because I was getting a "GREAT DEAL" - deal of the century - on the home and it would just be a waste of $$$. She was sure it was worth so much more than I paid considering the home was originally listed at $214,900. The builder reduced it several times - to $204,900, $199,900, and final listing price was reduced to $194,900 end of October. I offered $185k and the builder said 'no way' and my agent said that $190k would be a 'great deal.' I stuck to my guns at $185k, builder came back and said 'fine' and agent told me again that I'm getting a bargain and actually thanked the builder for what he did in accepting the offer of $185k (which is kind of weird I think). Anyway, the appraisal came in at $192k which I'm happy with, but my agent feels it's too low and that the home is worth at least $195k. Regardless, it's done and I'm happy I went through with it. Thanks for your input.

North_Raleigh_Guy · 12-21-2007, 09:47 AM

Quote:

Originally Posted by chukkles77

In case anyone is following this, I wanted to let you all know I went ahead and got the appraisal and I'm very happy that I did. My agent told me it wasn't necessary because I was getting a "GREAT DEAL" - deal of the century - on the home and it would just be a waste of $$$. She was sure it was worth so much more than I paid considering the home was originally listed at $214,900. The builder reduced it several times - to $204,900, $199,900, and final listing price was reduced to $194,900 end of October. I offered $185k and the builder said 'no way' and my agent said that $190k would be a 'great deal.' I stuck to my guns at $185k, builder came back and said 'fine' and agent told me again that I'm getting a bargain and actually thanked the builder for what he did in accepting the offer of $185k (which is kind of weird I think). Anyway, the appraisal came in at $192k which I'm happy with, but my agent feels it's too low and that the home is worth at least $195k. Regardless, it's done and I'm happy I went through with it. Thanks for your input.

Good for you. I'm glad you went ahead and got the appraisal and a survey (from your other post). The expenses are really small potatos compared to the overall investmet you are making in purchasing your new home. The information they provide is very valuable in my opinion and can bring to light serious problems should they exist. When spending $185K for a new home I don't see the logic in taking a gamble and saving a couple of hundred dollars by skipping the appraisal and survey. I think you've done very well.