Do you get an appraisal before you go into contract?

We placed a bid on the house and owner accepted. We did an inspection and there are a few things including termites. Our concern now is that the house may actually appraise 10K less than what we bid (and are to go into contract with). We haven't signed any agreements yet but we just did the inspection...next step is getting into the agreement stage. However, we are concerned that we may have bid 10-15k too high and the bank may not appraise it for the amount we bid at. Issue with this is that we don't want to put 10-15K of our own money which we could use for renovations...

If the house appraises 10-15K below are bid then we may not go thru with the sale.

Question: Can you get the bank to appraise the home before you go into contract and put a down payment on the house? How else can you protect your down payment on the house (i.e. a clause in the agreement saying that the house needs to appraise at X value in order for the sale to move forward)? Can you tell the owner that you will only buy the house if it appraises at that value if not, the owner would need to bring the price down?

COnfused...any help would be appreciated!

Re: Do you get an appraisal before you go into contract?

i believe your mortgage company will not give you a loan for the amount you bid on if the appraisal doesn't meet that amount.
You should check with your lawyer or mortgage broker on what your options are though..

Re: Do you get an appraisal before you go into contract?

i dont think you can do it before the contracts are signed, but i do know of someone whose appraisal came in for less than the bid. his attorney advised him to renegotiate, but this house was worth it to them for SD and community, so they bought it at the agreed amount, even though it appraised for a lot less. i would talk to your attorney about it though. HTH.

Re: Do you get an appraisal before you go into contract?

After contracts, your mortgage company will run the appraisal! Its generally pretty late in the game as I remember

Re: Do you get an appraisal before you go into contract?

You really shouldn't place a value of a house on a bank appraisal.

You should make your offer contingent on what YOU feel the house is worth.

If you put in a bid for xxxx, you should feel the house is worth xxxx. You can have your attorney put in the contract that the sale is contingent on a mortgage appraisal. If the house doesn't appraise for what the sale price is, they can re-negotiate it or you can walk from the deal.

But the appraisal is usually done by the bank after you sign the contracts.

Re: Do you get an appraisal before you go into contract?

We had our appraisal done after we were in contract. Just write in a clause about the sale of house being contingent on you being approved for a loan for the price of the house. If you can not secure the loan then it is fine, you just do not get the house.

Re: Do you get an appraisal before you go into contract?

If your contract states that your obligation to purchase is contingent upon you obtaining a mortgage then - in the event the house does not appraise for X amount (depending on calculations decided by the bank - taking into account amount of financing, sale price etc.) - you can cancel the contract and retreive your downpayment.

You should speak to your lawyer because your attorney will be able to contract certain protections for you.

If you have any questions please FM me.

Best of Luck!