Normally , the appraiser values the home after signing the purchase contract. But what will happen if you assumed that the purchase value of the property was 1 million shekels and you wanted to take out a 750,000 shekel mortgage which you can as that is 75% of the purchase price,and you have managed to save 250,000 shekels as a deposit. If the appraiser then comes and values the property at 900,000, then the bank will only lend you 75% of the appraisal which is 675,000 shekels. You now need to raise another 75,000 shekels.
But if you have already used all of the deposit of 250,000 how will you raise the remaining 75,000 shekels ? You may have to cancel the contract and you stand to lose a 15% penalty of the purchase price for cancelling the contract.
What is the solution ?
You can arrange an appraisal before signing the contract.
-There are no surprises afterwards and you know how much the property is worth before signing the contract.
-You will also know the true value of the property and therefore will not over pay for the property.
-More expensive ( Double the normal price of an appraisal)
-You may not end up buying the property
-If this appraiser does not work with the bank you might need to arrange another appraisal for the bank.