Appraisal Condition

To continue talking about Real Estate Purchase Contract:

As I mentioned before if you are a cash buyer, appraisal is optional tool for you. Otherwise, appraisal is a required continguency by your bank.

Keep in mind, however, that the bank role is to determine if the value of the property is not less than the Purchase Price. In other words, appraiser works for the bank and cares about banks' rights. Let's say if you know the property's value you are buying is way over the purchase price, most likely unfortunately, appraiser will not disclose this to you for this particurlar reason. You have a right for your own information purposes, invite appraiser who would be working for you.

I do not agree with some appraisal's rules. At the same time, though, I would like you to be aware of them.

If the Appraisal Condition applies and the Buyer receives written notice form the Lender that the property got appraised for less than the Purchase Price (a "Notice of Appraised Value"), Buyer may cancel the contract by proving this copy of such written notice no later than 3 days after receipt.

Date plus three days warning notice is exact as in Inspection Section. So, please see explaination in previous dates of this blog.

What is better to do inspection or appraisal first?

I would say inspection:

You can determine if you like the property, and if everything is fine in the property to start talking about it seriously. Usually, the inspection would cost cheaper if you pay on the spot to your inspector.

If Appraisal is completed, the appraisal fee would be included in your closing costs. And, by changing your mind, some mortgage companies will charge you not only appraisal fee, but cancellation fee as well.