What is an appraisal?

I am looking into buying a home and using the first time home credit. What is an appraisal and why do I actually need to have one in order to buy a home?

===ANSWER===

The appraisal is what determines the actual value of your property based on houses that are comparable to the one you want to buy. The appraiser will look for homes that have sold in the last 6 months to determine this. If property values are falling still in the area, this may have a negative effect.

I am getting a home inspection, is this the same as an appraisal?

===ANSWER===

The inspection is very different from the appraisal. The home inspection is for your peace of mind. You do not always have to get one unless your lender requires it. You will pay for it, normally they costs around $400.

I am not sure of the process and who to hire to do what. Do I have to find an appraiser or does my bank or real estate agent do that?

===ANSWER===

Your mortgage loan officer will be useful in helping you. Try to work with a direct lender and not a broker. There are lenders like Bank of America, Chase or even Flagstar Bank that are good ones.

The the loan officer and real estate agent will be able to guide you. Just interview them and work with people you like. You are their customer.

What do I need to do to make sure I don't get ripped off and buy a house that is falling apart?

I want to make sure I get the best deal I can on a home without having to make a bunch of repairs and have to wait to move in. I don't want to spend money on a bunch of people inspecting the house I want to buy if I don't have to. I just want to buy it and know that I got a good house for my money.

===ANSWER===

If you do not know much about building, the home inspector will be your best friend. Be there when he does the inspection and listen closely to what he says. He will be in the best position to tell you if the house is worth it or not.

Hope this helps, thanks for asking such good questions.

Regards,

Jeff