Paying more than the value
Buying Real Estate property is an important activity and it is very exciting, especially for first time home buyers. The process may involve the evaluation of several properties and later on, dealing with offers and negotiations.
During this process you must stay focus on the affordability and the value of the property. Once you have your offer accepted and a contract signed, the Law stipulate a time frame for you to complete the Due Diligence which are the steps to be taken in order to satisfy the legal requirements and to complete any and all the evaluations necessary before the purchase is completed.
Establishing the actual value of the property depends in great part of two documents:
- The Real Estate Appraisal which is the process of developing an opinion on the value of the property, usually the Market Value
- The Building Inspection Report which evaluates the condition of the building and evaluate the need for repairs or improvements
The actual value of the property is the amount to be paid by the contract agreement plus any expenses on repairs or reconditioning. The sum of the two, should not exceed the appraised value, otherwise you may end up paying a price above market value.