When it comes to real estate and cash buying many people question whether an appraisal is necessary. An appraisal is a given during a traditional real estate transaction when a loan is in the works. Lenders need to be certain that properties are valued at the selling price or higher in order to guarantee loans. When paying cash for a home an appraisal is not a mandatory part of the transaction. So, is an appraisal a good idea?
An appraisal is not necessary for a cash transaction but if a buyer is concerned that the property is not worth as much as the offered price it cannot hurt to conduct one. In much of the nation today’s sellers are lucky to land buyers. If an appraisal is one of the contingencies in a real estate contract and the appraisal comes in lower than the contract price then the seller can come down in price or risk having the buyer walk away.
On the flip side if the buyer likes a property, is happy with the agreed upon price, and is aware of what similar properties are selling for, then there is no need for an appraisal. There are a lot of real estate bargains out there right now, saving the money on the appraisal could make your new home even more of steal, the option is completely up to the buyer.