home buyers Archives - Page 2 of 2 - Tri-Valley Real Estate Blog

Baby Boomers Buying Houses in the Tri-Valley

November 21, 2016 by temineth Leave a Comment

Baby Boomers are Buying in California’s Tri-Valley area more and more.

Good idea or scary move?

It all depends on where you are in life, financially and physically. Should you downsize or invest? Move out or move up? These can be a lot of scary questions as baby boomers hit their retirement age. You may have made a lot of money over the past 30 years but with the drop in home prices over the last 8 years you may have lost a lot of it too. So where does that leave real estate investments today?

Many baby boomers have actually been delaying retirement for the basic fact that selling and downsizing just isn’t an option. They may owe more than the home is worth and this keeps them hanging onto it until it bounces back. Well, it has. Maybe not with the vengeance some would like but stronger certainly than we have seen in the past 4 years. The number of existing homes sold is up about 8% nationwide according to the S&P and prices have reached over 12% higher than they were this time last year. So now baby boomers are toying with the idea of selling or renting out and downsizing. Which is the best option and which makes the most sense financially? – How to Choose the Right Lender

Generally speaking, we know it’s better to own than rent but that’s usually if you are going to stay in your home more than 5 years. Is that something baby boomers want to consider at this time? It all comes down to ease of living which has many implications as far as maintenance, finances and responsibility. If age 65 is no longer the retirement age, keeping a home or investing in new real estate may be well within the realm of possibility for baby boomers. Buying a new home is sometimes a strain on the cash flow, not just in the down payment but in monthly taxes, insurance, fees and the mortgage payment. Even if buyers plan on paying cash, they must consider the inevitable costs associated with owning real estate. One smart plan may be to buy a good rental investment, live in it for a while, and then rent it out when you are ready to move on. The equity remains and collects while the retirees are off enjoying the freedom.

[5 Things to Know Before Buying a “For Sale By Owner” House]

So what makes the most sense for you? It really comes down to all the many variables associated with your specific retirement plan. I would love to talk to you about the options that might work when it comes to real estate in San Ramon, Pleasanton, Danville or Dublin. Call me today and let’s talk.

How to Choose the Right Lender

November 15, 2016 by temineth Leave a Comment

When it comes time to shopping for a mortgage, I would strongly encourage you to start with a local and trusted lender. – Jonathan Fox – Washington Post

You can’t get any clearer than that.Big business, large corporations, and big banks have been selling and buying mortgages for decades but when it comes to the individual homebuyer, going local, and going personal is always best.

It’s surprising how little value many homeowners, especially first-time homeowners, put into shopping around for the best home loan. They should be just as careful about this process as they are the home itself. However, many people simply go with whomever the real estate agent suggested or the local bank. While this might work out just fine, you can really benefit from shopping around for the best loan, the best rate, and the best terms. These really do change and you want to make sure that the lender knows you are shopping around. People get competitive when they know that they have others to compete against.

Terms, interest rates and details of a mortgage loan are not always set in stone. You would be surprised at what you can actually negotiate with. Everything is important when it comes to dealing with contracts including inspections, timelines and of course who you are dealing with.

Mortgages in today’s society are getting easier but we still need to be cautious about applying for the right home loan and only applying for a mortgage we can actually afford. In order to avoid a housing bubble burst, living within our means is really the key to maintaining our home and living comfortably with the mortgage we have.

Large banks, credit unions, and even hometown banks can be a great partner in managing basic financial details such as your checking and savings accounts or even credit cards. But when it comes to borrowing money for a large purchase such as a house, finding a mortgage officer the deal specifically with this type of loan is essential to getting the best rate.

Competitiveness also plays a big factor in getting the right loan for your needs. Shop around to a couple of different loan officers or mortgage brokers as well as your own bank or credit union. Find out what terms you can expect and different programs that different mortgage brokers can provide. Housing markets are competitive so lender should be as well.

Terms and price are not the only factors when it comes to choosing the right lender. Large banks that have multiple mortgage officers can tend to bog down the system, extending out timelines and deadlines that could cost you your home. Individual and private mortgage lenders and personal loan officers have more invested in the game, so that are more likely to pay attention to timelines and get things done in a timely fashion.

It’s Okay to shop around. Don’t worry about your credit getting hit. Having the loan officer run the numbers for you and then offer you the best plan and wait for your needs is essential to getting the right loan and saving you as much money as possible.

Feel free to give me a call as I have a lot of mortgage lenders in the Bay area and the Tri-Valley area that might work for you. Remember, shop around to get the best loan and the best deal for your needs.

5 Home Nightmares Buyers Don’t Think About Until They Need to Sell

November 3, 2016 by temineth Leave a Comment

Buying a house with the idea of selling it isn’t usually something most homebuyers think about when browsing properties and looking through listings. However, there are things that you might not think about as being bothersome as a homeowner but could be someone else’s nightmare when it comes time to sell. Here are five resale issues many buyers don’t think about when purchasing property.

#1. Power lines.

Myths, perceptions and superstitions carry enough weight to make a buyer back out. Power lines are one of those issues. You might not have considered power lines being a problem when you moved in but many people feel that living too close to high-voltage power lines could make them sick or even give them cancer. However, there has been no research found that supports this claim. However, perception is an issue and if people don’t like power lines, you may have a heckuva time selling your home if you live close by. You might want to consider this before purchasing a property close to high-voltage power lines.

#2. Close to a business.

This is a tricky one; studies have shown that homes close to a Starbucks or Trader Joe’s actually increase in value but being too close could have the opposite effect. Living close to a grocery store that gets its deliveries all night long could be a nightmare for people trying to sleep. Businesses can be loud and disruptive so take this into consideration when purchasing a home close to just about any type of business.

#3. New subdivisions and developments.

This again might not seem like an issue at all. Many homebuyers love brand-new properties but, they can also be a drawback if the development is still being constructed. Construction noise, construction workers, large trucks and dangerous equipment could be a drawback to many potential buyers. If you’re planning on buying and then selling within a couple of years, you might face a lot of problems, especially if the subdivision is still being developed. Many buyers will simply go to a brand-new home in the development rather than a resale home in the same neighborhood.

#4. Privacy.

It’s important to consider privacy when purchasing a home and how future buyers would perceive it as well. A home that backs to a busy road or highway might be private but you also have to deal with the noise. Some buyers prefer a long, private drive but this can also have it’s issues with safety; a well-lighted neightborhood may seem much safer than a dark and quiet road.

#5. Environmental issues.

This all depends on where you are located, but things to consider would be a home in a forest it area could run the risk of forest fires or downed trees during windstorms; and exposed home with no trees and a west facing backyard that gets blisteringly hot in the summer. These are subtle features for sure, but they can be a big deal once you’ve lived there for a while.

It’s not my job to choose the home for the buyer but I do want them to know that if they purchase a home with an unchangeable adverse situation, it could potentially sell for less than similar homes. Buying with the idea of selling can help you make a wise decision not only now but for your future.

How to Understand the Seller’s Disclosure Report

September 26, 2016 by temineth Leave a Comment

The seller’s disclosure report or form will be filled out by the homeowner/a seller before listing the property explaining in detail any known issues, remodels, renovations or problems that the house currently has or has had in the past and has been fixed. Anything that the seller knows about a property must be disclosed on this form. Seller’s disclosure forms vary from state to state will have some of the basics that buyers will need to know or understand before purchasing the property.

Here are some of the basics of most sellers disclosure forms or reports have that buyers need to understand.

The age of the roof.

This is more than simply knowing that the roof is 10 years old; it’s knowing what type of roof it is that you know the lifespan of that material. If you are only 10 years into a 40 your roof, you know that the roof will have some life left to it for quite some time. If you are unsure about the life of a particular roof material ask your real estate agent or home inspector. They can give you tips and advice as to how long a particular roof will last.

Plumbing.

Sellers should be able to explain any and all plumbing issues that they know what. You want to know the age and type of the pipes, whether it’s copper, galvanized steel or brass. Some of these can last up to 100 years but polybutylene or lead pipes could mean trouble. Some of these materials may need to be replaced before you move in.

Heat pumps, furnaces and water heaters.

Most gas water heaters usually last about 10 years and electric ones about 15. Most water heaters don’t need to be replaced until the leak or fail. HVAC systems or heat pumps work harder the older they get so a 20-year-old HVAC system will be working about 50% harder and less efficient than a new system. While this may not be something to replace, it is something to be aware of for your future in the home.

Renovations and remodels.

If the seller had conducted any remodels or major renovations they should be able to produce a building permit. If no permit was done on a major remodeling issues that require a permit for your city or state, you could be liable for mistakes in the future. Anything that was done that should have had a building permit needs to be signed off on before you agree to purchase the property. This is for your safety and liability.

Cracks in the wall and foundation.

Cracks can be structural damage but they also could simply be a settling. Newer homes are notorious for getting cracks in the ceiling, walls and corners simply because they have settled now that people have moved into the home or the foundation and ground around the home has settled. While this may not be cause for concern it is something to ask your home inspector about. Read more: Do New Homes Need Inspections?

Animal damage.

Sellers should be able to tell you if there’s been any major animal damage while the home was under their ownership. This could mean past issues, where they have hired an exterminator, major damage, rats, mice, snakes or other issues that may have caused damage to the house under the seller’s ownership. Make sure all of these items have been addressed and taken care of before you take ownership.

Asbestos and lead paint.

Sellers need to answer honestly of they know that the home has asbestos or lead paint. But, most homeowners have not owned the home for the last 40 years total so whether or not the property has lead paint in it or not, the seller is not going to know. The seller may know if there is asbestos but anything that they do know, they have to disclose.

Understanding the seller’s disclosure form doesn’t have to be difficult but if there is anything you don’t understand don’t hesitate to ask your real estate agent or the listing agent. They can identify and explain any detail and unfortunately if the seller simply does not know about an item dues to issues happening before they owned or if it is an investment rental property, there’s not much the buyer can do about it.

This post previously had a disclosure image that was creative commons and has since been pulled into a license photo. The image has been removed.

Should You Buy a “Flipped” Property?

September 20, 2016 by temineth Leave a Comment

We see them all the time these days; fix it or flip it, love it or list it etc. This new trend of buying homes and flipping them is certainly not a new idea but broadcasting it on reality TV has only hit the airwaves in the last few years. More and more sellers and investors are watching the shows thinking they can definitely do it but when it comes to buyers, are buyers apprehensive about purchasing a flipped property?

The challenge is finding a home that has had just a little bit of cosmetic work done versus a home that has undergone major surgery. Finding a home that has undergone major repairs or replacements is not a bad thing but you want to make sure that the work was done properly and up to code. Simply repainting a wall and repairing a patch or two is not something you’ll need permits for but rewiring the house, redoing plumbing or installing a major household appliance such as a furnace or heat pump should be monitored and approved by a qualified professional.

Other items that you may not be aware of include precautionary materials. For instance: if a vanity was replaced, the vanity might look great but if the Hardy backer board was not installed properly or is not waterproof, you could be faced with mold and mildew later on down the road. You’ll need to verify that all the materials used were up to code and properly installed. You certainly wouldn’t want the floor to buckle due to improper plumbing underneath the sink. Remodeling or renovating things on the outside might look pretty as long as the inside work was also completed properly.

Aesthetics are of course important when you’re dealing with a remodel or rehab but you also want to make sure that the work was done professionally and not just completed on the surface. Any wood rot, foundation problems, or items behind the scenes may not be visible on the outside door on the surface. These are items that could cause major problems in just a few weeks after purchasing the property.

Related: Do New Homes Need Inspections?

Having an inspection can certainly alleviate some of these concerns, however, not everything is visible or can be inspected. Verify that your home inspector will check the crawlspace and the attic in order to confirm that the bones of the home is just as sturdy and durable as the aesthetics.

All in all, buying a flipped property is a great way to get a home that is usually all put together but it is important to be aware of the concerns that flipped properties could present. Talk to your real estate agent, make sure you understand what work was completed and that it is been properly inspected and permitted.

5 Ways to Get the Best Deal on a House

July 20, 2016 by temineth Leave a Comment

We always want the best deal; and even better when we can find a great deal on a great house that we really love. If you’re ready to get into the real estate search game, know all you can about the business, the market and prepare yourself for getting a great deal. Here are 5 ways to get the very best real estate deal.

#1. Know the market.

The knowledge really is power and if you’re planning on getting the best deal, this is not something that you decide on a Tuesday afternoon and then put in an offer Wednesday morning. You need to do the research in order to get the best deal. Take some time; maybe even a month or two to really find out where you want to live, get a good list of communities, subdivisions or neighborhoods that you’d like to choose and then the research over the last six months for that area. How is the market doing? Are homes increasing in value rapidly or gradually? Are homes dropping in value? What about the crime rate for a particular area? Are there good schools in the area, something to consider for resell value? Home selling quickly? If homes in a particular area are selling fast you may need to come up with an escalation clause or deal with multiple bids for the same property. If there are 300 homes in a subdivision yet only two or three are listed at a particular time, chances are that’s a very popular neighborhood and you might end up paying more than the asking price in order to get the home. If there are dozens of homes in a smaller neighborhood, people may be moving for a particular reason. Is there new construction going to be happening in the area? Talk to the neighbors about why they’re moving. And of course, talk to your buyers agent about a particular neighborhood, why you want to live there and if they have any concerns or advice they can share about the subdivision, community or area in general.

#2. Set yourself up as an attractive the buyer.

After you’ve done the research on a particular neighborhood and you have a good idea of the area you want to live in and the price range, set yourself up for homebuying success. This means doing the financial homework necessary in order to purchase a home. If your financing the property, talk to a lender about the type of loan that works best for your situation. Get a preapproval letter and set aside some funds either for a down payment and/or earnest money deposit. The larger the earnest money deposit the more serious sellers take you. They may be more inclined to accept your offer then another similar offer that has a lower earnest money deposit.

Another way you can be an attractive buyer is to minimize your contingencies. If you need to sell a particular property, have tough financing contingencies or too many conditions that need to be completed before you finalize the purchase, sellers just see you as a hassle and may decline your offer altogether. Of course we always recommend a home inspection but in a slower market you might consider a home inspection prior to making an offer. This could waive the inspection after the offer is accepted, speeding up the process and making you more attractive to the seller.

#3. Consider a foreclosure or short sale.

Foreclosures and short sales are still out there and they can be great deals. There are keys to look for though in a foreclosure or short sale property:

Find the least attractive property in the best neighborhood. By doing so you can instantly gain equity once the home is fixed up, because it matches the rest of the homes in the area.
Keep your eye out for mispriced listings. Overpriced properties will generally get very little interest and attention and could sit on the market for a long time. These are great properties to go for because they might be more inclined to accept a lower offer.
Buy a foreclosure at the year or quarter end. This works especially well with cash buyers. If you make an offer at the end of a month, quarter or year, many banks will accept that offer in order to get the deal closed and off the books.
Look for the diamond in the rough. Many real estate agents make it too many homes from banks and not have enough time to really research the property and showcase the best features. Check out these properties a little bit closer and if they meet your criteria for size and the neighborhood, check out in person and you might find great features that the real estate agent failed to mention.

#4. Negotiate with everyone involved.

You can negotiate pricing from just about every party involved in the real estate transaction. This could include your real estate agent, appraiser, lender, inspector, escrow and title company. You might be surprised at how much you can save simply by negotiating everybody’s fees in an amicable and reasonable way.

#5. Know When to Pull the Trigger.

Knowing when to pull the trigger is something that you and your buyers agent should discuss. Once you’ve done everything prior to this point, knowing when NOT to wait is crucial. By determining all the factors above, understanding the area and the market, you should be able to pull the trigger on an offer at the right time.

ALSO – know when to walk away. This is just as important as knowing when to go for it. Your agent will be able to talk you through the plan and when not to get your emotions too involved. Sometimes, buyers can get so wrapped up in the process, they overpay when it’s all said and done. Don’t let the idea of “winning” become the focus over getting the right house at the right time.

Ready to get started? Ready for step one? Let’s talk!

10 Important Things to Do Before Buying a House

July 12, 2016 by temineth Leave a Comment

In today’s real estate world more and more homebuyers are being informed and educating themselves on the process, the transaction and the details. This is great and it helps buyers understand and feel more comfortable with their purchase. Before looking and buying a home there are some things that you should do so that you are prepared, well-informed and assured you are ready to buy. Here are 10 things all potential homeowners should do before buying a house.

#1. Know your own finances.

Before applying for a home loan, looking at homes or touring open houses, understand your credit history, score and your own finances. You certainly don’t want to be surprised when a lender discovers that you have a low credit score and that loan you took out 10 years ago never got paid off. Make sure there are no surprises and if you find any errors on your credit history correct them or write a letter of explanation before applying for a home loan.

#2. Shop for the right lender.

There are lots of lenders out there and you should be shopping them just as much is you would shop for a house. The rates, points, fees and costs can all vary from lender to lender so let them know your shopping them so that you get the best deal.

#3. Understand homebuying expenses.

There are a lot of zero down home loans or low-cost home loans out there making it fairly easy for first-time homebuyers to purchase a property however, there are expenses that you need to know about such as out-of-pocket earnest money costs, appraisal fees and home inspection costs. It’s important to have several thousand dollars for these items but talk to your lender and your real estate agent about how much exactly you’ll need in order to buy a house.

#4. Get your own buyers agent.

Find a buyers agent that has this profession as a full-time business. It’s fairly easy to get your real estate license so many people real estate and have a full-time day job however, they may not understand the changes, rules and regulations of purchasing property so it’s best to go with an experienced and seasoned real estate agent so you have someone on your side throughout the process.

#5. Don’t max out your budget.

Just because you can’t afford a $500,000 house, doesn’t necessarily mean you need to max out that budget. Looking for a home around $450,000 will give you a little bit of breathing room and allow you to save money for those home repairs that will now need to deal with in the future.

#6. Don’t let your emotions rule you.

I’ve dealt with many people that fall in love with the house and want it at all costs even though after the home inspection the property is in dire need of repairs and could even be hazardous. Try not to let your emotions get the better of you and try not to completely fall in love with the house until you know it’s going to be yours.

#7. Ask about the homeowners association.

HOA, or homeowners associations are very common in the bay area and Tri-Valley area so you want to double check on how much you’ll be paying monthly for the homeowners association. Single-family homes, residential neighborhoods and condo associations can all have an HOA, so make sure you agree with it before signing on the dotted line.

#8. Consider plans for the future.

For first-time homebuyers it can be difficult to think long-term but the home you by now probably will not be your only home. Consider resale value, location, school districts, and what it would take to sell the property in the future if need be.

#9. Try to look past cosmetics.

Some of the best homes with the greatest deals out there may have peeling, outdated wallpaper, older appliances and wood paneling. But, you can get a great deal and if you look past the cosmetics and see the house for what it really is, you may be getting a diamond in the rough.

#10. Don’t sabotage your finances.

Once you’ve applied for a home loan do not make any large purchases or take out another loan. This can greatly affect your interest rate and even your ability to get the loan at all. Consider putting all of your finances on hold and freeze them until the transaction is complete.

For more information or to get started on any of these steps contact my office today.

5 Secrets Every House Hunter Should Know

June 1, 2016 by temineth Leave a Comment

To really get the most out of your house hunting experience you may have done little bit of research, scoured the market and read real estate articles ad nauseam. You might think you’re an expert at this point but no one is an expert better than a professional that buys and sells real estate on a day-to-day basis. Gaining insights and secret tips from real estate agents and brokers could be the key to saving money and finding the home you really are going to love for years to come. Here’s our five secrets of every house hunter should know before jumping in the market.

#1. Think strategically.

Our bay area market is hot and there are new developments popping up all the time but it may not be fast enough. Buyers, especially first-time homebuyers need to think strategically in order to land a house in a hot market. It can be so frustrating looking at multiple houses only to be bid out time and time again. However, there’s always a way to gain an advantage over the competition. One way is for your agent to pull tax records of sellers to get information to use on a personal letter to the seller. This personal letter could be the ideal way that you get the home. Also, ask your real estate agent to share your needs on social media and with other agents for insight on homes that may be have yet to hit the market.

#2. Research and scope out the neighborhood.

Before making an offer on a particular home, check out the neighbors and the neighborhood around that home. Perhaps they’re having a garage sale in your desired neighborhood and you can ask the homeowner questions as your shopping. You can also sometimes find neighbors out watering the lawn and you can simply asked them about the neighborhood, the marketand what they like or dislike about a particular area.

#3. Use pricing psychology.

Pricing a house is very similar to pricing just about anything. $5.99 seems like a better deal than $6, even though we know that it’s basically the same. Pricing a house works very similar. If the property is listed at $625,000 and you know that the property has already received several offers, you may be tempted to go over the highest asking price with a flat number such as $650,000. However, raising it with an odd number such as $648,000, or $647,000 etc., may be the unique bidding number that will get yours noticed over the others.

#4. Be a great buyer.

Don’t be a lowball buyer that insults the seller at every turn. Sellers are more attracted to buyers that they like and that may share some interests. The personal letter can offer an insight into your personality and character and if you’ve already seen the inside of the home you might make notice of some of the things that stood out to you such as their baseball collection, unique design taste or complement them on or remodel they’ve recently completed.

#5. Keep an open mind.

Try not to let outside stigmas alter your perception of the home. Many people feel that a home where a senior citizen may have lived and even perhaps have passed away in is a reason to discard the property but chances are the the person that lived here took very good care of the property even though they may still have pink Formica, vinyl floors and original wallpaper. Keeping an open mind could give you a better chance at success and keep competitors away.

These five tips can make it a lot easier to find and purchase the home of your dreams. For more information please contact me today and let’s get started looking at a variety of homes in your desired area.

Tri-Valley Mortgage Mistakes and How to Avoid Them

March 30, 2016 by temineth Leave a Comment

Buying a home is a big step and an exciting one too so you want to make sure that you don’t make any mistakes during the home buying process. Now, this is not to say that is very easy to make these mistakes but sometimes, unknowingly, homebuyers can make a lot of mistakes during the mortgage process of the just don’t realize can harm their chances of actually getting a loan. When buying a home in the Tri-Valley area I urge all of my buyers to get pre-approved first. This is usually the first mistake many buyers make.

Not getting Pre-Approved.

This is where you actually sit down with a lender and figure out how much money you can spend on a house. The lender will determine how much income you’re receiving each month and how much is going out in debts, loans and basic utilities. From there, the lender will determine how much in a monthly mortgage payment you can handle which will relate to the total cost of a home. This also is a way to determine what your interest rate will be based on your credit history, report and score. Many homebuyers feel that they can simply enter some information on a mortgage calculator to determine their price range but unfortunately, if they’ve not gone through lender, their financing is not secured. Sellers look for secure financing and low risk offers. By being prepared with a preapproval letter ahead of time, you can ensure the seller that you’ve already done your financial homework.

Changing your identity.

This might sound like a crazy task but you might be surprised as to how often this happens. For instance: if a couple is planning on getting married and they’re buying a house at the same time, between the time the couple was approved for a loan versus when it closes, the wife’s last name could’ve changed. This is changing your identity and it could really negatively affect your chances of getting a home loan. Yes, you are the same person but don’t make any of these major identity or name changes until the property closes.

Making large purchases before closing.

Once the lender has determined how much you can afford you don’t want to change that in any way. This means it is not the time to finance a vehicle, spend large amounts on new furniture or other major appliances or take out loans of any kind. Consider freezing all of your assets, liabilities, loans and big spending until the closing is completed.

Not answering questions to your escrow or lender in a timely manner.

Everyone is working towards the closing date. There are numerous parties involved in the buying and selling of real estate and anything can hold up that process. Make sure you respond to phone calls and requests in a timely manner and don’t get frustrated if escrow or title officers ask for more identification or specific documents. They need to make sure that you are the correct person buying the home and that your identity is protected. Also consider all costs involved and ask about the costs including taxes, HOA dues, insurance and appraisals.

By keeping all of these things in mind you can ensure that your deal will close on time without a lot of hiccups. Of course, every single transaction is different so even if you’ve done everything possible those rare instances can happen or things simply fall through. By avoiding all of these mistakes you have a better chance at setting yourself up for successful homebuying purchase.

Who Pays for the Tri-Valley Home Appraisal?

March 21, 2016 by temineth Leave a Comment

When purchasing a home or condominium throughout California’s Tri-Valley area, many buyers wonder who actually pays for the home appraisal. There are a lot of closing costs and different fees built-in for buyers and sellers in a purchase and sale agreement. Sellers pay for excise tax when selling the property and several courier fees all culminating into their own closing costs. Buyers also have several closing costs and one of those includes the appraisal.

In order for a lender to properly evaluate a property they must discover fair market value on a home. Lenders will order a home appraisal for all borrowers to make sure that they’re not overpaying for a home and is the property is the proper value for what the borrower is requesting.

Federal banking regulations require that the lender order the appraisal. This is not something the buyers can do on their own. If the buyer was planning on purchasing a home with cash and they wish to have an appraisal conducted they would need to pay for it out of their own pocket. But, because it is the lender that is requesting the value, they will order the appraisal but still make the buyer pay for it. However, federal law also entitles all buyers to receive a copy of the completed appraisal.

Lenders will usually collect the cost of the appraisal upfront. If it is not collected upfront it will be added into the closing costs. Appraisals typically cost between $400 and $500 but appraisers can charge additional fees, especially if they need to make multiple trips for different reasons. Most of the time, and appraiser will be able to conduct the appraisal in one trip. Extenuating circumstances may prevent the appraiser from conducting the entire appraisal at the scheduled time. This could be due to a tenant or a seller that’s being unreasonable and not allowing the appraiser to tour the property or the home or for some reason there was a major part of the property that was an accessible at the time.

An appraisal is not a home inspection. Home inspections are simply a report on the structure and integrity of the property and the construction itself. An inspector will not base documented value to the home but may be able to tell buyer what the costs of replacing certain items could be. However, buyers should not take this into account when viewing the appraisal. Often times, buyers will say “the appraiser only said that this was worth $300 but my inspector said it was worth $500!” The appraiser is really the one that will determine the value of the home. Now, if there’s something that the appraiser has missed or has grossly undervalued in the home, the seller can certainly contest this. For instance: if the seller had upgraded a particular feature in the house that may not be visible to the outside with some high quality materials that could add a lot of value to the property, the seller can make note of this and asked that the appraisal be changed. However, it is up to the appraiser to determine the value in the end.

If the property does not appraise for the borrowed amount, the buyer will either need to come up with the difference on their own or the seller will need to lower the price. If neither are willing to budget, the transaction will usually be terminated because financing will not be completed.

For more information on appraisals, Tri-Valley real estate or if you have questions on a particular property or transaction feel free to contact me today.