BUYER APPRAISAL

Home Buyers, Why do you need a Real Estate Appraisal?
How much does it cost if you overpay for that home or condo?
Could there be a problem when one pays the top price in a market?

How much does it cost if you overpay for that home or condo?

In a seller's market, it is not uncommon for a buyers to find themselves in a bidding war over a house.  And the lucky bidder gets the house! But what was the cost?

For example, lets take the Smith's, they are in a bidding war for a house that they really want and are willing to out bid other offers by overpaying for the house.  They offer $265,000 for a property that's market value is more  in the range of $250,000.  So they overpaid $15,000 they got the property.  Now what's the cost?

What was that saying on how to make money? Buy high, sell low .... No No No. Buy high, sell higher ... not quite ... very risky.  Buy Low, Sell High ...YES! That is how anyone many money in real estate!  If you paid an inflated price at the start your equity buildup is off to a slow start.  If you are forced to sell before there is significant appreciation you may have to bring money to the closing.  

In addition, that fact that you have paid $15,000 over market value means that your mortgage is higher that it would have been.  If you owned the house for 10 years the accumulated interest that you paid on the extra $15,000 would also be substantial.

If you are compelled to overpay for various reasons in a bidding war, know why you are overpaying and have a game plan that makes sense.  Keep a cool head and don't let buyer emotions influence you or get an independent professional opinion.  Get an INHOUSE Appraisal.