Are Appraisals Needed On All Real Estate Transactions?
It's not uncommon in today's market for banks/lenders waive the appraisal on a real estate purchase/sale transaction. There are some variables in place when this happens as not all transactions are created equal.
Let's play out a scenario when a lender will waive the appraisal on a transaction. If, you're purchasing a home and you are putting a down payment of 20% or larger, the lender will do an internal analysis of the property to make sure the make sure the property value of the home is at or above your agreed purchase price. If they feel it is, there is a good chance they are going to waive the appraisal completely.
If you re purchasing a home with FHA financing or anything less that the 20% down, there is a good chance the appraisal will not be waive. There are some exceptions to this rule with some conventional programs.
There are some exceptions to these rules, both Fannie Mae and Freddie Mac which secure financing on conventional loan programs offer special financing occasionally where appraisal is waived on certain products.
To find out if your new purchase is going to offer a waiver of appraisal, we suggest you ask your loan provider up front and see if you qualify.
We hope you found this information helpful.