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Constructing Water Walls - A Guide to Common Mistakes
Constructing Water Walls - A Guide to Common Mistakes
The water wall plays an important part in the modern
landscape. The epitome of a contemporary water feature,
water walls are often built incorrectly causing ongoing
maintenance issues for...
Furnace Inspections A Must Under New Oilheat Regulations
(NC)-The Canadian Oil Heat Association (COHA) is encouraging oilheat customers in Ontario to book inspections on their heating systems as soon as possible to avoid any unforeseen delays or interruptions in service.
Basic and/or...
How to Winterize your Home
With the ice and snow reaching into the southern states this
winter, is your home protected?
In the winter months, freezing rain and snow may cause damage to
many homes across the country. With the high rise in cost for
heating this year,...
Make Soundproofing A Part Of Today’s Home Improvement
Want a simple behind the scenes way to increase the comfort and value of your home? Soundproofing may sound like something only professional recording artists need, but you will be surprised at how much you will enjoy the added quiet that...
Waterproofing Your Foundation? What Is The Right Choice?
What is foundation waterproofing?
Waterproofing is Protecting your property foundation – be it residential or commercial – from cracks due to natural processes such as water damage, thermal movement, shrinking, settlement and other causes.
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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/
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