Posted on: 30th Apr, 2011 12:27 pm
Hi,
I am buying a home for $82,500. The Loan is for $78,000. It was just appraised at $82,500 using the Sales Comparison Approach. Using the Cost it would be $97,800. Do I have anything to worry about or is my loan pretty much approved?
I am buying a home for $82,500. The Loan is for $78,000. It was just appraised at $82,500 using the Sales Comparison Approach. Using the Cost it would be $97,800. Do I have anything to worry about or is my loan pretty much approved?
I can't speak for your loan approval, but what you are describing is pretty typical. The cost approach will typically be the highest approach to value because noone will pay open market price higher than the cost to rebuild. In this recessed market you will see a significant difference in cost versus market sales, which is why construction has nearly halted.
As long as the final opinion of value is equal to or greater than the sales price, you should be in business. Good luck with your new house!
As long as the final opinion of value is equal to or greater than the sales price, you should be in business. Good luck with your new house!
>>Do I have anything to worry about
No.
No.
