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Appraisals & Inspection timing on contracts? What is first?

So we have been talking in our office about first time home buyers who are looking at trying to pick up a property and the appraisal issues that keep surfacing. It seems that recently, there have been more issues with the appraisal values coming in than inspection issues. So do you help protect your first time home buyer by pushing the inspection back after the appraisal, so they don't spend $750-$1,000.00 and not even close?

For instance, buyers put a house under contract for $180,000.00 and have the normal dates and deadlines associated with a contract. They pay for the inspection and get through that with no major issues, but spend $350.00, they also must do a survey which is required by the Title CO. $250. They then find out two weeks later that the appraisal comes in $15,000.00 under value ($3500. The Sellers don't have the equity, so now there is no deal, or they have to wait for a short sale approval. Now these first time home buyers could wait to go through that painful process with no definitive closing opportunity or walk away and lose the money they have already spent.

I would like to protect the buyers in the future and minimize their financial exposure, so should we be moving the appraisal deadline up and the inspection back?

Any comments or similar experiences?

Posted Thursday Apr 30