How Water Damage Can Affect Your Home Appraisal

 Home appraisals can be good or bad depending on how well a home measures up. If you are trying to sell your home you want the appraisal to be as high as it possibly can. If you are having a home appraised because you want to buy it, a high appraisal is good because the home is probably in good shape. If it appraises badly it might be bought for less money, but it also probably means it needs repairs.

If you are trying to sell your home it will have to be appraised. The thing to do is make sure your home is in as good repair as possible beforehand. Some things affect appraisals more than others. Decorating issues, like the need for painting inside or out, can make your home look less appealing, but since new home owners will often repaint to their own preferences anyway, painting issues will probably not affect your homes value very much.

One major thing that can affect your appraisal is water damage. Any where there is evidence of water damage in or outside your home needs to be addressed before the appraisal. A small leak from a water pipe that has not been fixed can make an appraiser look closer for signs of wood, sheetrock, and mold damage. He might find something you have not. Rust stains in tubs or sinks and under faucets can be evidence of leaking or faulty faucets. Some of these faucet leaks could be coming from pipes behind the walls. This could be a concern for water and mold damage that can not be seen.

Loose tiles or raised spots on a wood floor can also be signs or current or past water damage. This can cause concerns about mold and other wood damage underneath the hardwood or tile that can not be seen also. All things such as this should be fixed.The attic is another place that is usually inspected by an appraiser. He will be looking for signs of water damage in the beams and insulation. If he finds any, it could mean your roof has defects and this can really affect the appraisal.

The easiest way to make sure you do not miss repairing anything that an appraiser might find later, is to use a check list for anywhere in your house that water goes in or out. All pipes, appliances, roofing, sewer lines, spigots, and sprinklers. Any thing you can think of that can cause water problems should be checked and repaired.  http://rhnws.com.au/

How Appraisal Can Ruin Your Mortgage

 Appraisals are one of the most important steps in buying or selling a home, yet they can also be among the most frustrating as well. That’s because when it comes to determining the value of a home, there's no exact science or magic formula used during an appraisal. However, if there's a large enough gap between the appraised value and the previously agreed upon purchase price, it can temporarily or permanently halt the transaction. 

So, how can appraisals go so wrong?

Typically, appraisers review the purchase prices of similar homes located nearby that have sold within the previous six months. But what if there aren't any homes like the one they have been hired to appraise?

Unfortunately, many dig up older sales records dating as far back as five years ago. They may also check out listing prices for similar sized homes that may be priced significantly higher than what a buyer is actually willing to pay for the home. Or, they may use out of market numbers. In any event, the end result is an appraised value that’s well below what both the buyer and seller were anticipating. As you can imagine, when a buyer receives news that the home they are intending to purchase is worth less than the agreed-upon purchase price, they begin to worry, and rightfully so, If they can't afford to do that, many buyers will try to renegotiate the price will the seller, and that's when things can get messy. All too often, the two sides can no longer come to an agreement on the price of the home, and the sale falls through.

How often does this occur?

The National Association of Realtors recently conducted a survey of 3,000 agents, and found that 33% experienced a delay, had to renegotiate the price, or had to cancel the contract altogether last year because of an appraisal discrepancy.  They say that's because the system is flawed. They say appraisers are looking at sales prices from a few months ago when the housing market wasn't as strong as it is today.

So what can you do?
There are steps that sellers and buyers can take to protect themselves, to ensure that a transaction happen without any glitches or delays. Experts say buyers should add a contingency clause to the purchase contract stating that they get back the initial down payment if the appraisal ends up being less than their offer. That way, the buyer has more leverage to renegotiate the offer or walk away from the deal without losing the funds they've already paid towards the home.  http://rhnws.com.au/

How to differentiate appraisal and inspection

 When buying a home it is advised to not only have an appraisal, but also an inspection of the home by a certified inspector. An inspector will inspect all areas of the home for damage and note any problems, such as electrical problems, faulty roof, termite damage, or any other problem a house may have. An appraiser performs an overview of a home and makes note of obvious deficiencies in a home but does not inspect every part of the home for problems.Be advised, not to confuse the term Home inspection with the term Appraisal Inspection. They have two different meanings.

There are two separate charges for a home inspection and for an appraisal report. The lender will generally require you to have an appraisal done on the property to determine the value and general condition of the property. The home inspection is up to you though to decide if you would like to have one or not. A home inspection by a certified home inspector is highly recommended to make sure the house is up to date and note and deficiencies and possible trouble areas.

A Uniform Residential Appraisal Report will usually contain a disclaimer from the appraiser saying that they are not performing in the capacity of a home inspector and that their training and expertise is not in evaluating the fitness and serviceability of specific components of the home. If you property is located where termite is common, ask the inspector to conduct the termite inspection while he is doing the regular home inspection. Some BC lender will ask the borrower to provide the termite inspection as well. If you have any concerns about the condition of a property consult with your Realtor prior to submitting an offer. In some cases you can submit an offer contingent on a satisfactory home inspection, or make the seller of the property agree to pay for up to $X based on the inspectors findings.

Home Appraisal

According to the Appraisal Institute, the role of the home appraiser is to "provide a professional opinion, usually an estimate of market value, to be used in making real estate decisions." Typically, appraisers are employed by lenders to estimate the value of real estate involved in a loan transaction. An appraiser hired by a lender works in the best interest of their client, the lender.

Home Inspection

A home inspection is an objective visual examination of the physical structure and systems of a house. Home inspectors are usually employed by the prospective home buyer. A home inspector hired by a buyer works in the best interest of their client, the home buyer. An appraisal is not a home inspection and a home inspection is not an appraisal. Keep in mind that the approval / acceptance of a home by a lender is not an endorsement of the home's physical condition.  http://rhnws.com.au/

Things to expect during real estate appraisal

 During a home appraisal, an appraiser will determine the fair market value of your house. This is based on research on the selling prices of homes in your neighborhood and on a visual inspection of your house and property. Depending on the type of financing, an appraiser may test the systems in your house, such as the plumbing.

When I get to a house to do an appraisal, I inspect every room in the house and draw a floor plan. If there is a door in any room, I'll open it to find out what is behind it. When there is an attic or basement crawl space, I'll look inside. I will take pictures of every room in your house. Appraisers must consider many factors during an appraisal. We'll look at the condition of each room, for instance. Are the walls and floors in good shape or badly damaged? Are there signs of problems, like pooled water on a basement floor near the washer or stains on the ceilings indicating there may have been a roof leak? If so, I'll ask the homeowner what caused them.

I'll also look at fixtures in your house. Do you have new, high-quality appliances? Do you have new windows? Did you add new fixtures to the bathrooms recently? All of these things can add to the appraised value. Appraisers also inspect the outside of the house. They will measure the entire house from the outside, as well as your entire property. They will take pictures of every side of the house. Certain exterior factors can affect the value of your home. For instance, a new roof or siding can add to the value. Having a corner lot or a property with a view that many people enjoy -- like the Manhattan skyline -- will also add to its value. On the other hand, a view overlooking something very unsightly may work against you.

Is there anything you can do to prepare for an appraiser's visit? I recommend that if there are any problems in the house that will be easily visible that you fix them. For instance, if your roof is leaking, have the leak fixed and re-paint the ceiling. If a pipe is leaking and causing water damage to your floors, call a plumber to repair it and then fix the floor tiles that were warped. Telling the appraiser that you plan to fix them later will not help the value. He or she has to base the appraisal on the condition of the house at the time of the appraisal.

Besides repairing anything that is obviously broken or damaged, it's a very smart idea to make sure your home is spotless. It will help to create a positive impression on your appraiser, who is evaluating the overall condition of the house. http://rhnws.com.au/

Easy way to get a appraisal of your house

   Home appraisers are the unofficial umpires of residential real estate sales, deciding whether offering prices are fair or foul. But much more often than in the past, they’re striking out deals and sending buyers and sellers back to the dugout. Each month, between 10 and 20 percent of real estate agents are seeing accepted offers to buy a home founder or collapse as a result of appraisals that came back too low, according to recent surveys by the National Association of Realtors.

Low appraisals hurt both buyers and sellers. When an appraisal comes back lower than expected, buyers usually can’t qualify for as large a mortgage. That means they have to put up a larger down payment to buy the house  something they often can’t do. As a result, the sale might fall through, or the seller will have to lower the price in order to salvage the deal.

There are ways to improve your chances of a good appraisal. But first, it’s important to know why this problem has arisen lately. During the height of the real estate boom, real estate agents and mortgage brokers often played a big role in selecting appraisers. These agents and brokers had a strong interest in high appraisals, because a high appraisal meant that it would be easier to get a deal to go through. So many appraisers felt pressured to turn in optimistic numbers, fearing that if they didn’t, they wouldn’t be hired again in the future.

Arguably, this resulted in a rash of unreasonable valuations, which contributed to the housing bubble.

This spawned a new industry, called appraisal management companies, or AMCs, which hire appraisers to provide independent valuations to lenders. Today, about 70 percent of appraisals are done through AMCs; most of the rest are done by in-house appraisers who work directly for banks. Some appraisers think this is a good thing, because they can be objective and are no longer under pressure to skew the numbers upward. On the other hand, some appraisers say they now have the opposite problem  they feel pressure to skew the numbers downward and to be as conservative as possible, out of fear that they’ll get in trouble if a high appraisal leads to a bad loan and a default.

Other critics say that AMCs have resulted in lower-quality appraisal . Because AMCs keep a lot of the money that used to go directly to the appraiser, appraisers receive less compensation for each job, and thus they have to look at more properties in less time in order to make the same income. As a result, critics say, appraisers don’t make as careful an inspection as they might, and don’t give as much thought to whether the comparable sales they use for valuation truly involve comparable properties. Some appraisers complain that in order to increase their volume, they have to accept jobs outside their local area, where they are unfamiliar with the neighborhoods and less able to make informed judgments about comparable sales.  http://rhnws.com.au/

Things about residental real estate appraisal

A  real estate appraisal helps to establish a property's market value–the likely sales price it would bring if offered in an open and competitive real estate market. Your lender will require an appraisal when you ask to use a home or other real estate as security for a loan, because it wants to make sure that the property will sell for at least the amount of money it is lending.

About Appraisers and Appraisals

    Appraisers are licensed by individual states after completing coursework and internship hours that familiarize them with their real estate markets. The lender might use an appraiser on its staff, or contract with an independent appraiser. If you are allowed to choose the appraiser, and it isn't someone the lender is familiar with, the results might be subject to review before they are accepted.

    The appraiser should be an objective third party, someone who has no financial or other connection to any person involved in the transaction.
    The property being appraised is called the subject property.
    You will probably pay for the appraisal when you apply for your loan.
What You'll See on a Residential Appraisal Report
Appraisals are very detailed reports, but here are a few things they include:
    Details about the subject property, along with side-by-side comparisons of three similar properties.
    An evaluation of the overall real estate market in the area.
    Statements about issues the appraiser feels are harmful to the property's value, such as poor access to the property.
    Notations about seriously flawed characteristics, such as a crumbling foundation.
    An estimate of the average sales time for the property.
    What type of area the home is in (a development, stand alone acreage, etc.).
Residential Appraisal Methods

There are two common appraisal methods used for residential properties:
Sales Comparison Approach

The appraiser estimates a subject property's market value by comparing it to similar properties that have sold in the area. The properties used are called comparable, or comps.No two properties are exactly alike, so the appraiser must compare the comps to the subject property, making paperwork adjustments to the comps in order to make their features more in-line with the subject property's. The result is a figure that shows what each comp would have sold for if it had the same components as the subject.

Cost Approach

The cost approach is most useful for new properties, where the costs to build are known. The appraiser estimates how much it would cost to replace the structure if it were destroyed..  http://rhnws.com.au/

Ideas to Choose a House Construction Company

 There are various aspects that come into play when building a home; one of the most important factors being the construction company that you choose. Since building a home is by no means a small investment sometimes the pressure of getting everything done to perfection and in time can be quite overwhelming. But choosing the right construction company will go a long way in easing the pressure, however, finding a good company is a challenge in itself. So here are a few considerations to think about when trying to find a residential construction company:

  One of the most crucial aspects of your home construction will be the quality of the material that is used which will not only impact the final effect but also the sturdiness and the life of the structure. So, while choosing a construction company this should be the primary contention. There will always be companies who will offer suggestion that cost less and compromise on quality but a home is a one time investment so you might as well do it right.

  Another point to consider when choosing a construction company is the level of interaction with the client; a good company will always keep you abreast of the progress and will be willing to incorporate your suggestions. They will send over landscapers, architects, civil engineers and other planners to ensure that you get the look and feel that you desire in your home and they will ensure that all the designs are approved by you before they begin construction.

  A reliable construction company will not mind regular site visits from you and they will be happy to make any changes or additions that you may deem important. Make sure that the construction company that you are dealing with does not over promise; there is certainly no dearth of establishments that will promise you the world but will deliver very little. Ideally, you want to choose a company that is committed to providing you with a home that you desire and which was made to your specifications. You should not deal with a company that simply wants to take their paycheck and get out to be never bothered again.

  To ensure that you are getting the right price and good quality start by determining your requirements. You should be absolutely clear about what you want; this should include the amenities, structural design, interiors, landscaping and appliances. Being fully aware of the work that you want to get done will give you a good idea about the amount of money that should be required to achieve the desired results. Finally, once you have chosen a company you will draw up a contract, ensure that everything is put down in writing, a handshake hold no merit in the court of law and in case of trouble if there is no documented proof that certain arrangements were made, there is very little that you will be able to do to solve the matter. http://rhnws.com.au/