| You finally have a contract on Your Home | | Print | |
| Wednesday, 05 August 2009 15:15 |
|
It has been on the market for months and finally the right buyer came along and found their dream home. You have negotiated your price and terms of the contract, now its time for the buyer to go to work and perform. Your realtor is going to set up a check list and ensure that the buyer does everything in the time frame allotted from the effective date of the contract. However there are some things that are not under the control of the Real Estate Company you selected to sell your home. There are going to be different steps that must be performed by the buyer depending on the terms that were negotiated under the contract. If the buyer is going to finance any part of the purchase price through a commercial lender its going to require an APPRAISAL be done on the property. This appraisal is ordered by the lender from a State Certified Appraiser. In the present real estate market this has become a reality check for both Home Sellers and potential buyers. This is by far one of the hottest topics in this summer’s market. Banks are sending out appraisers who are not familiar with the area they are doing appraisals in and they are using foreclosed and short sold homes as comparables to determine price. Example: The names have been changed but the sale was real. A listed property was contracted for $920,000. An appraisal was ordered and the home appraised for $920,000. Looks like a done deal. Wrong, five days before the closing date the bank requested another appraisal. This one came in at $840,000. Now Mr. Smith the seller has to re-negotiate with Mr. Jones the buyer on this new appraised price. In any market but this one Mr. Smith the seller would have realized a million or more for his home. The National Association of Realtors requested a moratorium and complained that the new code is raising costs to borrowers, distorting property values and killing sales. Bottom line: Be aware of the issue. It affects your equity, even if you're not buying or selling. And watch to see whether Congress fixes the problem. |
