3 Stumbling Blocks of Closing - Part 2

Source: pixabay.com

Appraisals and Inspections

While typically these steps affect the buyers’ side of the deal slightly more, a low appraisal for a seller can be a nightmare. Appraisals and inspections function similarly but are used for different purposes.

What is an appraisal?

An appraisal is typically required by the lending bank to protect themselves by not lending more than the home is worth. They usually hire the person who does the appraisal and could make or break the deal. A home appraisal can cost anywhere from $300-$500 and is typically paid by the buyer upfront, however the cost is typically negotiated in closing, which the seller may give credit towards.

The appraiser visually inspects the home and assesses it’s value. They are looking at location, structural condition, renovations, and recent sales in the area of comparable homes.* Square footage and the number of rooms are typically considered in home comparisons. 

If the home is appraised at a higher value than the sale price, that is certainly a boon for the buyer and automatic equity upon purchase. However, if the appraisal comes in lower, that could throw a monkey wrench in the deal. That means the bank won’t be willing to lend you over the valued amount, forcing the buyer to cover the remaining cost. This can happen particularly in “hot” housing markets where buyers are compelled to make bids against steep competition. There is some recourse in this instance other than walking away. 

A skewed appraisal does not only affect the buyer but the seller as well. Appraisers aren’t perfect and there are many homeowners who act in order to appeal appraisals they feel are inaccurate and unfair. The lending bank typically has a process in place to challenge an appraisal, because unfortunately, this isn’t an uncommon occurrence in a continually fluctuating market. 

Image: Realtor.com

What is an inspection?

Another upfront responsibility of the buyer, while they could theoretically skip this step, it would not be smart to do so. The difference between a home appraiser and a home inspector are many. While an appraiser doesn’t work in favor of the buyer, seller, or even the bank, a home inspector is hired and working in the buyer’s best interest. A home appraiser additionally is not responsible for functions of the home and only does a visual inspection and property comparison.  An inspector will test for radon, asbestos or mold, will consider HVAC, and other home functions such as electrical systems and plumbing.** It is wise for the buyer to be present at the inspection to truly gauge the seriousness of each reported condition.

The whole point of a home inspection is to protect the buyer from purchasing a “lemon.” They may be made aware of problems or replacements to expect in the next few months or years, however, an inspection is not any type of guarantee. 

A seller may also choose to have a home inspection made before listing the property in order to be proactive in addressing any issues. Once a problem is known, it becomes “material fact” and must be disclosed to all future potential buyers.

Many times, if a seller conducts a home inspection, the buyer will want to take a peak without shelling out the cash, or conversely, if a buyer orders an appraisal, the seller wants to see how their property fares.  Either way, the other party may want to see the results of a home inspection or appraisal that they did not pay for. The appraiser or inspector is only liable to the person who paid them. This can often be a point of contention between buyers and sellers. Instead of involving yourself, be sure to work through your trusted Realtor through these potentially tricky steps! 

Resources: Realtor.com | thebalance.com

Stay tuned for Part 3 - Repair Addendum 

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Selling? It's all in the details

For those of you getting ready to put your house on the market, there are many DIY things you can that will attract your buyer. Getting rid of clutter, adding a plant to the entryway, and going for neutral colors are all great ways to get the buyer to imagine themselves at home!

Source: pixabay.com

10 Important Details That Are Often Overlooked By Home Sellers
Forbes Real Estate Council | March 7, 2018 | Forbes.com

First impressions are formed in a one-tenth of a second. It is this knee-jerk reaction that helps us formulate whether we like something or not, and it can also make the difference in whether your home sells quickly or not at all. 

Making a good impression with home buyers needs to happen the instant they enter your house, creating interest and a desire to have your home as their own. All too often, sellers forget to take care of the small details that can easily turn a buyer off, ultimately taking longer to sell and often at a reduced price.

Weighing in these important and often overlooked home elements are 10 members of Forbes Real Estate Council. They recommend all home sellers take care of these details before allowing their real estate agent to show their home to a potential buyer:

1. Curb Appeal 

Curb appeal is key. Cleaning up the yard, planting fresh flowers and mulching can go a long way. You want to appeal to the emotions of the buyer. Once you have them hooked, your house will be sold. Cleanliness and appearance are ultra-important. - Timothy VandenToorn, United Properties of West Michigan

2. Minor Touch-Ups

Before you allow your home to be shown, please be sure to touch up anything, including paint, woodwork and small items, especially on the exterior of the home, before they get inside. First impressions are so important, and you need to make sure the little things are taken care of because that's the beginning of the showing. If it starts badly, it's more difficult to get them wanting to buy. - Kevin Taylor, Sand to City Real Estate Team 

3. Welcoming Environment

Don’t forget to make your house look like a home. It’s important to remove the clutter and distracting personal details, but you also want a potential buyer to be able to picture themselves in that house. Bake some cookies before a big day of showings for that lingering cookie smell, or invest in some flameless candles for a cozy ambiance. A welcoming environment is key for first impressions. - Joshua Hunt, TRELORA

4. Clean Closets 


The size of bedroom closets — especially in the master bedroom — can be a make/break moment for a prospective buyer. A neat, organized closet that showcases space and functionality can truly make a difference. - Lisa Fettner, ReferralExchange

 5. The Forgotten Front Door

Many homeowners are accustomed to tidying and cleaning inside the house but many forget about the front door. Given that it's technically "outside," many don't feel it's significant, but the truth is, the front door accumulates a lot of dirt and is frequently what buyers are staring at while they wait for their agent to open the lockbox. Give buyers something pleasant to look at before they enter. - Thomas McCormack, Resources Real Estate

6. Neutral Artwork 

A seller wants buyers to be able to imagine themselves living in their home. But that Velvet Elvis painting you've had since school, that bright orange and green sunburst sculpture over the fireplace you bought on a vacation or that bronze bust of your favorite politician are all no-gos. Store them; bland is best. You don't want to be remembered as "that home with the puke-green yard sculpture." - Kevin Hawkins, WAV Group, Inc.

7. The Smell Test

I cannot tell you how often buyers will reference homes by their scents — and usually not in a good way. Simple fixes for common offenses can usually be found in general, carpet and upholstery cleaning, removing clutter and any/all air fresheners and potpourri, — and in a real pinch, fresh paint on walls. Better to be remembered as the house that smelled of fresh paint. - Beverly Serral, Beverly Serral Signatures 

8. Clean Surroundings

Even before getting to the front door, first impressions start on the road when driving to the property. Keeping the yard trim is one thing, and tidying up the house is another, but if the street or other close properties (such as a vacant lot) are littered with trash, take the time to go out and clean it up. It will make all the difference in the sale. - Kent Clothier, Real Estate Worldwide 

9. Tidy Garage

The garage almost always tells the truth about how the property has been maintained. If it's a complete mess, stuffed full of boxes, furniture and junk, buyers assume the well-staged interior is just a facade. If, on the other hand, the garage is clean and well organized, the buyer assumes that the same level of attention and detail went into maintaining the home. - Joe Boylan, SpringsHomes

10. Appealing Photos And Listing 


Historically, curb appeal was the first impression a potential buyer would encounter. However, with the advent of technology, this is no longer the case. Most buyers will spend time researching your property online before they ever drive up to the physical location. Be sure you have professional photos and that your agent is creating an appealing listing online prior to ever showing the place. - Sarnen Steinbarth, TurboTenant


This article originally appears on Forbes.com

3 Stumbling Blocks of Closing - Part 1

Negotiating Price

You know what the home sold for down the street, but is it really a comparable property?  Negotiating price between the buyer and seller side is not the only area where expertise helps, pricing your home is something your Realtor heavily considers before listing.

What goes into your listing price?

There are actually many factors that go into pricing a home and most experts recommend not relying on just one opinion. Two of the most common methods used are Appraisals and a CMA or Comparative Market Analysis. An appraisal is an estimation by a professional, usually hired by the bank or lender to visually inspect the home to determine it’s value. A CMA is collected research of previously sold homes in your area based on location and similar properties, usually provided by your Realtor to determine a listing price. 

Other factors that determine listing price is inventory. In Richmond, inventory has remained relatively low, so it has been somewhat skewed in favor of the seller. However, even after you and your Realtor determine the listing price, a buyer has the right to negotiate.

Don’t let your emotions get involved

Buying or selling a home is an emotional time for many. Sellers may have an inflated sense of their home’s worth, it is a Realtor's job to set expectations on how to expect a listing price to be received. It is the goal of a top notch Realtor to list your home at a great market value in order to sell without lingering on the market.

Conversely, buyers could think to be a savvy shopper means submitting a low ball offer. This is definitely a risk some buyers are willing to take, but it may put a bad taste in the seller's mouth and sour the deal from the beginning. Another mistake that Realtors see is buyers not willing to make a reasonable concession for a great home just because they don’t like the color of the walls.

Money isn’t everything

Some people value time over money and vice versa. Price is not the only thing negotiable in a closing. Some buyers and sellers will make exceptions if you meet their preferred closing dates!

In any case, handling negotiations in a professional way should be done through your Realtor. While your Realtor is obligated to submit an offer, they can advise on what a fair counteroffer may be.

What neither party wants is a ’No Sale.' 

Stay tuned for Part 2 — Inspections and Appraisals!