Did you know that the appraisal can make or break your real estate sale? The appraiser works for the bank, not the seller or the buyer.
In real estate transactions, we have 3 significant players – the buyer, the seller, and the lender. The Appraiser is the eyes of the lender in the field. An Appraiser plays a vital role in every real estate transaction.
For example, we have a real estate transaction of a sale price of $300,000. The buyer is putting 10% down which is $30,000. He is getting a loan in the amount of $270,000. Everyone so far thinks this home is worth $300,000, obviously, the buyer thinks this because he made an offer for the sale price of $300,000.
The lender now sends the Appraiser out to the home to get an appraisal of what the home is worth. Here is where it can become pretty tricky. When the appraiser goes out here are a few things that can happen:
- The appraiser determines that the value of the home is higher than the sales price, maybe its $305,000 instead of $300,000. This is great news because we can go ahead with our transaction.
- The appraiser, appraisers the value of the home at $300,000 which is the sales price. Excellent! We move ahead with the transaction.
- The appraiser values that home lower than the sales price for example $290,000. This becomes a problem for all parties involved. A couple of things can happen here which is not so great for the parties involved.
- The Lender can still lend the buyer the money to purchase the home but only for $290,000, not the $300,000 sale price.
- The seller can either eat the $10,000 and sell the home for $290,000 instead of $300,000. This can sometimes happen, where the seller comes down to the new appraisal price.
- The buyer can buy the home at $300,000 but would have to bring additional money to the table. You can see this happening in a seller’s market. The loan is now $290,000 with a down payment of $29,0000, the loan amount would be $261,000. The buyer has to bring an extra $10,000 to purchase the home at $300,000.
- The last thing that can happen is that the whole transaction blows up because neither party is willing to negotiate.
You can see how the Appraiser is vital to a real estate transaction. It does not matter what the buyer or the seller thinks the home is worth. It matters what the Appraiser thinks…that’s what counts!
This can be one of the most difficult part of the selling process for most homeowners. This is the home that you may have raised your family in and with that comes all the memories. How can you put a price tag on that? If you are selling by owner then it’s up to you to figure out what will be a fair price.
Take a look at your home and realistically write down the square footage of the home, number of bathrooms and bedrooms, any updates, example maybe you added a new roof, new kitchen or bathroom remodel. These things will be important when comparing your home to ones that have sold in your area. If your price is too high you may find that your home will sit on the market for months and if it’s too low, then you end up losing money.
PRICE TO SELL
So you've decided to sell your home? Now what? When working with a real estate agent, they do all the leg work for you. The real estate agent actually do all the research on all the comps in your area and do all the dirty work of helping you get to your list price. This can be very challenging for home owners when selling their own home. Hopefully after reading this you can get a better idea of how to come up with a fair price for your home.
1. Not all homes are the same even though their square footage is the same and the floor plan maybe the same. You have to take into consideration updates that other home owners may have done to their home. Certain improvements may add more value to your home than others. So keep that in mind when thinking of doing any remodeling.
2. Go www.zillow.com and type in your home address. You will get tons of listings that pop up. Try to focus on the homes that are within 1/2 mile from your home. See how those homes compare to yours and what they are priced at. Pay attention to remodels, square footage comparisons, compare bedrooms and bathrooms, pool and outdoor patio.
3. Go to the recent home sales on www.zillow.com. You can access homes that was recently sold in your area. Check out sales that are 5 months or less and that compares to your home.
4. You can also contact a real estate agent for a CMA. Most agents would love to help you.
5. Check out some open houses in your area and see what kind of homes are being sold and what it's being sold for. It's a great way to scope out the competition. Plus you can get some ideas for your own open house.
For more information on pricing your home please contact Arona McGinley Cell: 727-422-9340 or email email@example.com.
copyright to Arona McGinley -Real Estate Bitz. All rights reserved.
WHAT IS MY HOME WORTH IN TODAY’S MARKET?
You’re thinking of selling your home but you don’t want to pay a Realtor.
A Realtor is a great asset to any home owner.
A Realtor comes with negotiation skills that most homeowners may not possess.
A Realtor comes into your home and is brutally honest with you about what you need to do to get the highest possible offer for your home. Realtors have knowledge on buyers and their preferences.
A Realtor has no emotional connection to your home and can negotiate with a buyer from a financial perspective versus an emotional perspective.
A Realtor spends their time marketing your home to prospective buyers. They do all your showings and open houses. They make sure that they are showing your home to buyers that are ready to buy and home buyers that can afford to buy right now
A Realtor can tell you what your home is worth. Realtors have access to data on each neighborhood , what homes are selling for and what they are appraising for. Most Realtors will give you a FREE CMA so take advantage of that and contact one today.
A Realtors takes care of all the paperwork involved in your real estate transaction. The Offer and the Negotiating Process. Inspections & Appraisals.
Contact a local Realtor for your free CMA