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Appraisal is a word you'll hear thrown around in your Real Estate journey. What exactly is it, and why does it matter to you? An appraisal is the value of your home determined by a licensed specialist, who is a neutral third party. An appraisal is required if you have a loan. Your lender will determine how much they are willing to lend you based on that number. This protects you from overpaying for a home and protects the lender from giving the homeowner more money than the home is worth. Certain loans, like VA or FHA may also use the appraisers findings to require repairs before the loan can fund. How does an appraiser determine value? -First they'll use a "comparable sales approach" or "comps" another term you'll hear a lot when buying a home. It means they'll look at the homes that have sold recently and are of similar size and style within about a mile or so radius of your home. (your agent should be intimately aware of the comps for the home you are selling or buying) -Second, they will look at the outside of the home: land and structure size, condition of the roof, walls, chimney, foundation, driveway, pool, landscaping, garage, curb appeal, landscaping and health and safety issues etc. -Third, they'll look at the inside of the home and be sure everything is in working condition, plumbing and electrical, improvements, add-ons, amenities like a pool built in grill etc... If you have an FHA or VA loan there are additional requirements (we will look into that in a future blog. ) What if it comes in under value? Talk to your agent then you can appeal the appraisal and ask for a "reconsideration of value". Appraisers are human and can make mistakes. However, if that does not work the seller and buyer can negotiate to get the price of the home down or get the buyer to make up for the gap in price (talk with your lender about whether this is an option or not.) Who pays for the appraisal and how much will it cost? On average $300 to $400 for a single family home in California. The buyer will pay for the appraisal this is all part of what we call "closing costs." Let's talk about closing costs soon...
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WELL, IT HAS BEEN ONE HECK OF A YEAR HASN'T IT? IF YOU ARE IN THE MARKET TO BUY OR SELL IT IS NO SURPRISE THAT YOU MAY BE WONDERING HOW IT WILL ALL WORK!
The number one question we realtors hear is : What is the market like right now? Is it a buyers market or is it a sellers market? I would call this a sellers market. Why? Simply put: inventory is low and demand is high. This makes it a great market for a seller looking to upgrade to a larger home, downsize to a condo, move to the dream retirement destination, make that move to Arizona or Tennessee or sell that rental property and invest in another or use the cash to make other dreams come true. In other words cash in on all of the hard work and love you've put into your home and invest in yourself all over again. Buyers don't despair, there IS inventory, and most importantly interest rates are at record lows, that means saving many, many thousands of dollars over the course of your loan. This is why now more than ever, you need a good agent to help you navigate a competitive and FAST moving market. Sellers please visit THIS LINK and I will send you the most up to date value on homes in your neighborhood. No obligation, just facts and the low-down on what your neighbors are selling their homes for. Buyers, drop me a line and I will answer any question and talk you step by step through any questions you may have big or small! |
Christina Linda Palomo
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