Kathy Riggs April 26th, 2009
Welcome back to the continuing journey to home ownership as we are taking the trip in the buyer’s car. If you have been following the series you know the buyers have found a house and have had inspections. If you haven’t been following the posts, scroll down to see the road we have traveled.
As you remember, the time between offer acceptance and and closing is the period when the lenders and attorneys complete their work. Two of the most important jobs, the appraisal and title search, are completed without buyer involvement.
Let’s take a look at the appraisal.
If a buyer is financing the home purchase, the lender will want to order an appraisal to determine the “market value” of the property. Market value is the most probable price a typical buyer will pay for a property in an open market that has reasonable exposure and all parties are acting in their best interest. The financial institution wants to be assured their interest is protected and the property will be marketable in the event buyer defaults. It is important that buyers understand the market sets the value of a home and the appraiser determines that value by inspecting the house and comparing it to recent sales of similar properties – called comps – in the same market. Regardless of what the national news media is broadcasting, all markets are local and features important to buyers in one area of the country might not be desireable in other areas. Supply and demand also affects market value.
So what, if you are paying cash for the home? Is an appraisal required?
No, but the buyer may have one. This time the buyer would hire the appraiser and the work would need to be completed by a pre-determined date.
In the day-to-day operations of real estate, the real estate agents rarely receive a copy of the appraisal, so arrangements for the buyer to secure a copy must be made between the buyer and the lender.
on the lighter side
The trouble with owning a home is that everywhere you sit, you’re looking a something that needs doing.
SHAMELESS PLUG
List with me and your internet exposure is not limited to realtor.com. Call me at 252-939-2432 or email me at kriggs@kathyriggs.com
Kathy Riggs April 19th, 2009
Welcome back to my continuing saga about the buyer’s side of the real estate transaction. In the last few weeks, we have pre-approved the buyer, selected a Realtor, gone house hunting and made an offer.
Finally, a seller accepts! Woo hoo! The buyer is on the road to become a new homeowner and the seller starts to pack.
Well, let’s slow down just a minute. Although the journey began after the buyer was pre-approved, acceptance of an offer is the first step to closing day. Typically buyers should allow a minimum of of 30 days to close the deal and preferably 45 or more for a smoother transaction.
A first time buyer needs to know why closing should not be rushed. Between the time the offer is accepted and the closing date, is the time the lender orders the appraisal and completes his file, inspections are done, repairs negiotiated and the attorney performs a title search. Of these tasks the buyer will be more closely involved with the inspection.
Buyers should always budget for the inspection. They have the option of hiring a licensed Home Inspector to do the job and check the house from top to bottom or they may hire an electrician, a plumber, a contractor or an HVAC specialist to check the items in which they specialize. Either way, inspections are a buyer’s expense. Buyers are wise to schedule any inspections at a time when they can be present. Once inspections are done the buyer and the agent usually review the report(s) and prepare a list of requests for the seller to address. Outside of negotiating the offer, handling the inspection report can be one of the most stressful issues of the entire transaction. The sellers may have lived in the house for 20 years and can’t understand why they are being asked to make repairs to a house they are about to leave. While the seller may have ignored a leaky kitchen sink faucet, a buyer will want things in the house to function as intended. However, by looking at all things objectively, buyers and sellers can usually achieve their goal of proceeding to closing day with all parties going home happy.
on the lighter side
The sign of a modern house is one that has switches to control everything except the kids and gadgets that do everything but pay the mortgage.
SHAMELESS PLUG
Please join me between 2 and 4 p.m. Sunday, April 26 for an Open House at 2619 Plantation Circle in the Falling Creek section of Lenoir County. For more information on this 5-bedroom, 3-bath house call me at 252-939-2432.