Whether you're a first time buyer or a seasoned investor, one of the overriding questions in every transaction is "How do I know if I'm getting a good deal?"
One of the best ways to gauge the value of a home is looking at previous sales. Ask your agent to look at similar sized homes in the neighborhood over the past 3 or 4 months.
It's also important to understand the trend of the neighborhood as well.
For example is the area appreciating in value or declining this should impact and justify your offer
An appraisal offers another layer of protection for buyers.
Once you make an offer on a home your bank or lender will order an appraisal.
If the value of the home can't be justified, it's back to the negotiating table.
Most contracts allow the buyer 10 days to secure financing and get an appraisal so your binder money won't be jeopardized if the home fails to appraise.