Due to the large inventory of bank foreclosures and short sales currently on the market, banks and lending institutions are becoming even more stringent when qualifying potential real estate buyers for mortgages. As a result, banks want to make sure that buyers have the ability to pay back money owed on the loans.
Banks also protect their mortgage investments by making sure that the mortgage’s collateral backing is secure. The appraisal is now more important than ever, as banks want to make sure that if the borrower fails to make their payments on the loan, then the bank will be able to sell the home for at least the amount equal to the mortgage balance. As a result, you cannot just find able and willing buyers to purchase properties at agreed upon sales prices. Now, you have to take the extra step and sell these sales prices to appraisers.
Last week, the National Association of Realtors’ Existing Home Sales Report showed how appraisals are negatively impacting residential real estate transactions in the United States. In fact, 14% of all transactions in April were either cancelled or renegotiated to a lower sales price, because of low appraisals!
When considering listing your home on the market, please work with a Realtor that can answer all of your questions and concerns regarding appraisals. Remember, you will have to sell your home twice: first to the buyer and then the appraiser. Do not get all excited when you agree on terms with a potential buyer, as that is only half the battle. The second half is having the home appraised. The Parkland Parrot Real Estate Team emphasizes to each of our sellers that the appraisal is probably the most important aspect of the real estate transaction. As a result, your Realtor should meet the appraiser and present him/her with the the following items:
Remember, banks cannot have direct contact with appraisers. So, the only individual that communicates with the appraiser is the listing agent in order to allow the appraiser access to the property. Make sure your Realtor does their homework and meets with the appraiser at your home. Appraisers come from all over South Florida and might not be affluent with your particular community. As a result, make sure that you and your Realtor put together a plan for both the buyer and appraiser. If you are thinking about selling your home and would like us to explain the home selling process as it relates to appraisals, please give us a call at: 954-609-0591.
Know the neighborhood. Know the value. Know your hometown agents: The Parkland Parrot Real Estate Team. If you are interested in buying or selling in Parkland or South Florida and are looking for experienced local Realtors, please do not hesitate to contact the Squawk at 954-609-0591 or send us a message here.
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