There is so much to buying a home that I did not know until now. One of the steps that is required by a lender is to get a home inspection done on the property that is to be purchased. If you are managing to buy a home without getting a mortgage, this step is not required. The lender is just doing due diligence. They want to know if you’re overpaying for the home or if there is something that potentially may cause the home to be worth significantly less than the purchase price.

Keep in mind the appraisal is not a replacement for the home inspection. It in end, it’s the lender’s way of making sure they’ve helped you buy something that they can get their money back on if they are forced to take the property away from you.

It nearly all cases, the home appraisal is paid for by the purchaser. I paid $210 for mine, tax included. The appraisal fee falls under the awesome set of items called “closing costs” which is money you have to spend to get the privilege of spending a huge amount of money for the home itself.

My appraisal happened this week and I was looking forward to seeing the results. Of course, I was hoping that the appraised value would be higher than my purchase price. I was e-mailed a copy of the appraisal today. It turns out the appraiser believes I purchased my apartment for approximately 7.5% less than their calculated current fair market value. In other words, I got a good deal but it certainly wasn’t a bargain of any sort.

I told a friend of mine the good news and he suggested I immediately flip it for a tidy and quick profit. There a million reasons why that isn’t a good idea, not the least of which is the fact I’m tired of doing paperwork now.

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