The 1st thing you want to cover is value of the property, doing this before going under contract will help avoid a handful of issues down the road. Knowing the market value of the property will also help you decide what kind of offer your plan on writing, do you want it under market value, over market value, or maybe you want to write it for market value. Just because a property is listed at a specific price doesn’t mean you can’t write an offer for another amount. Make sure you review the comparable properties with your Realtor and ask questions. You should be confident in your offer and how you came up with that price.
The 2nd thing you want to talk about with your Realtor is the appraiser. What their job is and how they do it. You want to avoid surprises at all costs. You want to find the value of the property with the same practice as an appraiser. I’ve seen many people waste $1,000’s because they didn’t think ahead and plan for the appraiser’s opinion.
The 3rd thing you should be talking about with your Realtor is, what happens if we have a surprise with the appraisal?
The major concern with the appraisal is if it comes in under value. Meaning, you have an agreement to buy the property for more than it’s worth. If this happens the Bank will flag your file and not give you a loan for a dollar more than what the appraisal stated.
This could leave you spending more money out of pocket to bridge that gap or have you walking away from the deal… loosing out on the money you spent during the inspection period and for your appraisal.
At the end of the day you want to make sure you have someone in your corner that is an expert, someone who is able to guide you through this process and navigate around any obstacle that comes up. The appraisal process is not only designed to provide protection for the bank, but the home buyer as well.