|
|
|
Ecology: 10 Ways To Fortify The Environment For Under $10
America’s beautiful landscape represents the natural brilliance of a nation founded on truth, freedom, and the well-being of all its citizens.
As technology progresses, America’s ecosystem has suffers the greatest toll. Automobiles, industrial...
How To Negotiate The Price & Get The Best Deal When Buying A House!
When it comes to negotiating, I’m no expert. But when buying my house, I did not ask for everything I wanted, and to this day I still regret this decision! Again, there are no set guidelines for negotiating, but do what you feels right (and ask your...
Peace of Mind for Home Inspections
As sure as the spring flows at The Fountain of Youth, home inspecting provides a stream of knowledge to wash away the fears of home buyers. But fear may be replaced by frustration if the wrong inspector is chosen! Some pointers on selecting your...
Small Is Beautiful
Remember the studio apartment you had in college? That one room apartment served as bedroom, living room, kitchen and den; it probably held a daybed, a television, a coffee table, and maybe even the stove and refrigerator along one wall. Moving into...
The Home Decorator�s Guide to Wall Repairs
Everybody has had one or two. You know, those little hole or indentations in the walls � behind a door, or behind a picture. If you live in a home, hang a picture, or have children � accidents happen! But repairing those accidents is easy. I...
|
|
| |
|
|
|
|
How to Avoid Appraisal Problems in the Sale of Your Home
Before you sign a contract to sell your home, check to see if the purchase offer depends on financing. Look for a clause witch states that the offer is contingent on your home's appraisal done by the buyer's mortgage lender. This clause causes many home sellers to lose the sale or to lower the sales price later.
Appraisers draw on comparable market sales (comps) of local properties sold within the last six months to value your home. With today�s rapidly rising seller�s market, six-month-old information is ancient history. Appraised value does not always equal the true market value, or what the home will sell for on the open market.
Realtors will give you a comparative market analysis, an informal estimate of market value based on comparable sales. Lenders, on the other hand, will use the appraised value to determine a new mortgage amount. Some lenders require that the stated property value covers the mortgage amount plus their selling costs in case of foreclosure. For this reason, a sale may fall through if a home sells on the open market for more than the appraised value, which often happens in bidding wars over hot property.
We learned the importance of securing a sufficiently high appraisal when we sold a rental property in Lake Elsinore, California. We listed the house for $234,700 on Friday. By Monday morning, we had three offers: $245,000, $255,000, and $260,000. We accepted the one for $255,000 because the buyers had $80,000 down, reassuring us that they had sufficient funds.
As usual, the lender sent an appraiser to review the property. This busy appraiser didn't take the time to view all the upgrades we put into the custom-built home. Even worse, he used only comps from the local one-mile radius. Because this home is close to a shopping district, there were not many homes sold in this limited area during the six-month period.
The appraiser used comps six months old; during this time housing costs in Southern California appreciated around thirty percent. Sales from six months previous should have gone up in value by $30,000 on a $200,000 home. This means that our home should have been worth $250,000 to $260,000, especially since buyers are willing to pay this price on the open market. To increase the value of this home, at the time there was not another three bedroom home listed in the area for under $250,000 (excluding manufactured homes). However, the appraiser valued our home for only $230,000 -- and we would have lost the sale if the offer did not include a
sufficient down payment.
Because a low appraisal can kill your sale, finding a buyer with a large down payment provides you with a safety net. You may also choose a buyer with strong credit who doesn't have to put a large percentage down. If you think that your home�s appraisal could become a problem, make sure you don't include a clause in your sale�s contract which states "subject to appraisal."
How to Avoid Low Appraisals
Hire your own appraiser before the sale. Then ask your buyer�s or lender�s appraiser to review your appraisal.
Retain the option to approve your buyer�s mortgage lender. Make sure that the buyer doesn't use a lender with a history of deliberately underestimating property values. A good real estate agent should know which lenders routinely under value homes.
Keep records of repairs and upgrades, including costs. Take "before" and "after" photographs. Create an organized journal with a listing of expenses and include pictures to show to the appraiser during the appraisal appointment. Stage your home for the appraiser like you do for buyers.
Secure your own property comparables to make sure the appraiser uses complete information. Call real estate agents with homes in escrow and get the sales prices. Make a list of these properties with the agent�s phone numbers and give it to the appraiser.
What to Do When Your Selling Appraisal Comes in Too Low:
1. Ask for another appraisal.
2. Protest the appraisal with documentation of your upgraded expenses.
3. Have the buyers make a larger down payment.
When you sell or buy real estate, remember that the certified appraisal is just one person�s opinion of the value of your home. The opinion that counts for you is the buyer�s: you want to be sure the buyer values your home above all others.
About the author:
Jeanette Fisher, author of Sell Your Home for Top Dollar--FAST, Staging Houses, Doghouse to Dollhouse for Dollars: Using Design Psychology to Increase Real Estate Profits, and other real estate and interior design books, teaches Design Psychology and real estate investing. For information on Design Psychology, visit: http://designpsych.com/.For help selling houses, articles, and home staging tips, see http://www.sellfast.info/
|
|
|
|
|
|