Hey, Buyers: These Home Appraisal Tips Are for You

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Most people have deeply personal reasons for wanting to buy a home. Maybe it’s the bathroom that feels like a dreamy, modern spa. Or that two-tiered deck just made for parties.

Your lender doesn’t care about the freestanding tub. Or the built-in outdoor fire pit. Their only concern is that the house you buy is worth as much as the value of your mortgage.

To them, a house isn’t a home. It’s collateral. (Harsh, but true.) If someday, for some reason, you can’t make your mortgage payments, the lender can foreclose on the home and sell it to recoup all or some of its costs. (Even harsher, but also true.)

For that reason, a home must be valued at, or above, the agreed-upon purchase price, and this has to happen before you can close on a house. That’s where a home appraiser comes in. 

A Home Appraiser Is Neutral (Like Switzerland)

After you sign a home purchase agreement (the contract between you and the seller about the terms of the pending sale), and before your lender approves your loan, the home you’re buying must pass an appraisal — an assessment of the property’s value by an unbiased third party: the appraiser.

An appraiser is a state-licensed or -certified professional. Their job is to assess an opinion of value — how much a house is worth. The appraiser is on no one’s side. They don’t represent you or the seller; instead, this person is a contractor chosen by your lender through an appraisal management company (AMC), a separate, neutral entity that maintains a roster of appraisers.

Appraisers survey a house in person, using five main criteria to determine the value of a home:

  • Location
  • Age
  • Condition
  • Additions or renovations
  • Recent sales of comparable homes

Be Prepared to Pay for the Appraisal — or to Negotiate

Generally speaking, the home buyer is responsible for paying for the appraisal — and the fee is typically wrapped into your closing costs. However, who pays for appraisal is negotiable. It never hurts to see if the seller is willing to cover it.

How much money are we talking about? The average professional home appraisal will run between $287 and $373, according to estimates by the home-professionals resource HomeAdvisor.com. Costs can vary depending on the square footage and quirks of the house, with higher appraisal prices for larger or more unique homes.

Appraisals Take a While, So Be Patient

Typically, a purchase agreement has a “home appraisal contingency” requiring that the appraisal be completed within 14 days of the sales contract being signed. Because it takes appraisers some time to visit your house and write a report — up to a week, or longer in a busy housing market — your lender will order the appraisal immediately after you sign the purchase agreement.

So, You Have a Valuation. Here’s What It Means — and What to Do Next

When the appraisal is finished, the appraiser issues a written report with his or her opinion of the value of the home. To produce the report, they use their analysis of the property and data from comparable homes, as well as review the purchase offer. The report will outline their methodology and also include photographs that they’ve taken of the property, inside and out.

You and your lender will both receive a copy of the report. Three things could happen next: 

  1. If the appraiser’s valuation matches the price you and the seller agreed to for the home: Your lender will proceed to underwrite your loan. Great news: This is the final step in your loan-getting process!
  2. If the appraiser’s valuation is higher than what you’re paying for the home:Congratulations! You’ve gained immediate equity. How, you ask? Let’s say, for example, you’re paying $200,000 for the house. If the appraiser says it’s worth $250,000 — jackpot. That’s an instant $50,000 in equity. (Keep in mind, this is very rare.)
  3. If the appraisal is lower than what you’ve agreed to pay for the home: Your lender won’t give you a loan for more than the appraised value. If you and the seller agreed on $200,000, for example, but the appraisal is $190,000, that creates a $10,000 shortfall. So what happens next?

Don’t despair — not yet. If you’re faced with a low appraisal, there are several ways the deal can still go through.

If an Appraisal Is Low, You Can Still Make It Work

Before we talk strategy, some reasons why appraisals come in lower than expected:

  • The seller overvalued the price of the home. 
  • The appraiser isn’t familiar with the neighborhood.
  • The appraiser overlooked pending sales data.
  • The appraiser had trouble finding comparable homes, or missed comparable homes, so they compared your home with properties outside the neighborhood.
  • Home prices in the area are changing so fast that the listing agent’s price no longer reflects the market.
  • The appraiser rushed the job.

If the appraisal comes in low, your agent will offer recommendations about how to proceed. In general, your best strategy is to persuade the seller to lower the sales price, or to split the difference between the home’s appraised value and the price with you. This is when you can rely on your agent — and their negotiating skills — to go to bat for you.

You can also appeal the appraisal assessment. You’ll work with your agent to research comparable homes that support the sales price you agreed upon with the seller and present this information to your lender, who will forward it to the appraiser for a re-evaluation of the home’s value. Ultimately, though, it’s up to the appraiser to decide whether to revise their valuation of the property.

Alternately, you can ask your lender for a second appraisal, though there are caveats:

  • You’ll have to pay for it out of pocket (or persuade the seller to foot the bill).
  • You’re more likely able to challenge an appraisal for a conventional loan than a government loan. And you’d need solid facts to back it up in either case.
  • There’s no guarantee that it will be higher and meet the sales price.

The last option: You can come up with the cash yourself to cover the difference between the home’s price and the appraised value. 

If you don’t want to take that route (and who could blame you?), a purchase agreement’s home appraisal contingency gives you the ability to walk away from the deal scot-free, and with your earnest money deposit in hand.

Let’s assume it all works out. With the appraisal behind you, you’ll be one step closer to closing on that house.

What to Expect During a Home Inspection

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You’ll go through many emotions while having a home inspection conducted. Excitement for hopefully buying/selling your home, nervous that something will be wrong, or feeling your patience thinning out as you wonder how long this process will take. However, a home inspection is an important part of the home buying/selling process, so we’re going to go through it with you.

A Home Inspector Is Your Protector

An inspector helps you make sure a house isn’t hiding anything before you commit for the long haul. (Think about it this way: You wouldn’t even get coffee with a stranger without checking out their history.)

A home inspector identifies any reasonably discoverable problems with the house (a leaky roof, faulty plumbing, etc.). Hiring an inspector is you doing your due diligence. To find a good one (more on how to do that soon), it helps to have an understanding of what the typical home inspection entails. 

An inspection is all about lists. 

Before an inspection, the home inspector will review the seller’s property disclosure statement. (Each state has its own requirements for what sellers must disclose on these forms; some have stronger requirements than others.) The statement lists any flaws the seller is aware of that could negatively affect the home’s value. 

The disclosure comes in the form of an outline, covering such things as:

  • Mold 
  • Pest infestation
  • Roof leaks
  • Foundation damage
  • Other problems, depending on what your state mandates.

During the inspection, an inspector has three tasks — to:

  1. Identify problems with the house that he or she can see
  2. Suggest fixes
  3. Prepare a written report, usually with photos, noting observed defects

This report is critical to you and your agent — it’s what you’ll use to request repairs from the seller. (We’ll get into how you’ll do that in a minute, too.)

The Inspector Won’t Check Everything

Generally, inspectors only examine houses for problems that can be seen with the naked eye. They won’t be tearing down walls or using magical X-ray vision, to find hidden faults.

Inspectors also won’t put themselves in danger. If a roof is too high or steep, for example, they won’t climb up to check for missing or damaged shingles. They’ll use binoculars to examine it instead.

They can’t predict the future, either. While an inspector can give you a rough idea of how many more years that roof will hold up, he or she can’t tell you exactly when it will need to be replaced.

Finally, home inspectors are often generalists. A basic inspection doesn’t routinely include a thorough evaluation of:

  • Swimming pools
  • Wells
  • Septic systems
  • Structural engineering work
  • The ground beneath a home
  • Fireplaces and chimneys

It’s Your Job to Check the Inspector

Now you’re ready to connect with someone who’s a pro at doing all of the above. Here’s where — once again — your real estate agent has your back. He or she can recommend reputable home inspectors to you.

In addition to getting recommendations (friends and relatives are handy for those, too), you can look for professional inspectors at their trade association websites. The American Society of Home Inspectors’ (ASHI) Find a Home Inspector tool lets you search by address, metro area, or neighborhood. You can also search for inspectors by state at InterNACHI.

You’ll want to interview at least three inspectors before deciding whom to hire. During each chat, ask questions such as:

  • Are you licensed or certified? Inspector certifications vary, based on where you live. Not every state requires home inspectors to be licensed, and licenses can indicate different degrees of expertise. ASHI lists each state’s requirements here. 
  • How long have you been in the business? Look for someone with at least five years of experience — it indicates more homes inspected.
  • How much do you charge? Home inspection costs range from $260 to $399. The costs vary according to your location and the size of your house.
  • What do you check, exactly? Know what you’re getting for your money.
  • What don’t you check, specifically? Some home inspectors are more thorough than others.
  • How soon after the inspection will I receive my report? Home inspection contingencies require you to complete the inspection within a certain period of time after the offer is accepted — normally five to seven days — so you’re on a set timetable. A good home inspector will provide you with the report within 24 hours after the inspection.
  • May I see a sample report? This will help you gauge how detailed the inspector is and how he or she explains problems.

Sometimes you can find online reviews of inspectors on sites like Angie’s List and Yelp, too, if past clients’ feedback is helpful in making your decision.

Show Up for Inspection (and Bring Your Agent)

It’s inspection day, and the honor of your — and your agent’s — presence is not required, but highly recommended. Even though you’ll receive a report summarizing the findings later on, being there gives you a chance to ask questions, and to learn the inner workings of the home.

Block out two to three hours for the inspection. The inspector will survey the property from top to bottom. This includes checking water pressure; leaks in the attic, plumbing, etc.; if door and window frames are straight (if not, it could be a sign of a structural issue); if electrical wiring is up to code; if smoke and carbon monoxide detectors are working; if appliances work properly. Outside, he or she will look at things like siding, fencing, and drainage.

The inspector might also be able to check for termites, asbestos, lead paint, or radon. Because these tests involve more legwork and can require special certification, they come at an additional charge.

Get Ready to Negotiate

Once you receive the inspector’s report, review it with your agent.

Legally, sellers are required to make certain repairs. These can vary depending on location. Most sales contracts require the seller to fix: 

  • Structural defects
  • Building code violations
  • Safety issues

Most home repairs, however, are negotiable. Be prepared to pick your battles: Minor issues, like a cracked switchplate or loose kitchen faucet, are easy and cheap to fix on your own. You don’t want to start nickel-and-diming the seller. 

If there are major issues with the house, your agent can submit a formal request for repairs that includes a copy of the inspection report. Repair requests should be as specific as possible. For instance: Instead of saying “repair broken windows,” a request should say “replace broken window glass in master bathroom.”

  • If the seller agrees to make all of your repair requests: He or she must provide you with invoices from a licensed contractor stating that the repairs were made. Then it’s full steam ahead toward the sale.
  • If the seller responds to your repair requests with a counteroffer: He or she will state which repairs (or credits at closing) he or she is willing to make. The ball is in your court to either agree, counter the seller’s counteroffer, or void the transaction.

At the end of the day, remember to check in with yourself to see how you’re feeling about all of this. You need to be realistic about how much repair work you’d be taking on. At this point in the sale, there’s a lot of pressure from all parties to move into the close. But if you don’t feel comfortable, speak up.

The most important things to remember during the home inspection? Trust your inspector, trust your gut, and lean on your agent — they likely have a lot of experience to support your decision-making.

That’s something to feel good about.

How to Find the Right Person to Sell Your House

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Your home is where you do life. You’ve probably laughed, cried, sang, screamed, and gathered in this place for as long as you’ve lived there. You’ve gone through life in this house. Now it may be time to move on to the next chapter.

Selling your house brings on a variety of emotions. You’re probably feeling some sadness, anxiety, happiness, and concern. It can be overwhelming and getting the best person to help is what you should do. You don’t have to do it alone.

A listing agent has your back when it comes to the financials, like setting a listing price and marketing, staging, and making repairs to your house. He or she can also help you navigate more personal issues, such as your timeline, and what you’re hoping to achieve with the sale. For all of those reasons, it’s important to find an expert who is right for you and your specific situation, and who can help you get what you want. Here’s how.

-Know What a Listing Agent Can Do For You-

Before you start interviewing prospective agents, have a clear sense of what you want to get out of the selling process. When so much money is on the table, it’s crucial to know what your goals are, so that you can find an agent who really speaks to them.

Then, it helps to understand what a listing agent does (other than sell your most valuable asset — no big deal).

The listing agent will: 

  • Work with you to price your home
  • Market your home (we’re talking pretty pictures, social media promo, cute staging — the works)
  • Negotiate with home buyers
  • Usher the home sale through inspection and closing

Now, let’s break all of that down . . .

Pricing your home. This is the BIG question, right? How do I set the price? The short answer is you’ll need to trust your agent to recommend a smart listing price. 

So how can you tell whether an agent — a relative stranger to you — is choosing the best price for your home? You need to do two things:

  1. Know, generally speaking, what your property is worth. Do your own research on the prices of local comps, (but understand the limits of online property sites). Run your info by your agent for an informed perspective. 
  2. Ask the agent for pricing information on homes he or she has recently sold.Specifically, what the differences were between their listing prices and how much the homes ultimately sold for. 

When it comes to the agent’s pricing history, you’re looking for accuracy. Anyone could suggest a high price for your home, knowing it’s what you’d like to hear. But nobody (especially you) wants to have a house languish on the market, or to reduce a price repeatedly.

Marketing your home. The listing agent will also get the word out that your house is on the market, using a combination of old-school (but powerful) marketing techniques — such as direct mail, signage, and open houses — and the modern methods we know and love, like social media. Savvy agents will post pics of your house on Instagram, Facebook, Twitter, and any other platform that can get likes plus the attention of other real estate agents who can bring buyers to the table.

Negotiating with buyers. When offers start pouring in, your agent will negotiate with prospective buyers on not only the sale price but also on what contingencies (aka special circumstances) are attached to the contract. As with any negotiation, there could be some stressful, fraught moments with the buyers. You’ll want an agent who can step up for you, and who has a negotiation style that you’re comfortable with.

Closing the sale. Once you’ve signed a purchase agreement with a buyer (woo-hoo!), your agent will help you navigate the sale’s remaining steps. This includes negotiating home repair requests post inspection and dealing with any last-minute surprises before closing.

The average listing agent does all of the above. A great listing agent does all of the above, while also inspiring your confidence — that they’re getting the best price for you, and that they’re representing you and your home in the best possible light. 

So, let’s talk about how to find and hire that kind of agent.

-Ask These Questions to Find a Great Listing Agent-

Here, time is on your side. Aim to hire a listing agent six to eight weeks — or more — before the day your house is listed on the market (also known as the “go-live date”). You’ll be grateful for the cushion, especially if the agent you ultimately hire recommends that you make repairs or upgrades to your home before it’s listed. (That wouldn’t be unusual.)

To find prospective agents, start with your network. Ask friends, relatives, neighbors, and colleagues for recommendations. Word-of-mouth endorsements, as always, can be priceless.

You can also turn to another trusted friend: the internet. Property websites such as realtor.com® have directories that let you search for agents in your area. These databases can clue you into important details, such as an agent’s years of experience, number of homes sold, and past client reviews.

Three out of four home sellers only contact one candidate before picking their listing agent, according to a NATIONAL ASSOCIATION OF REALTORS® report. While that may be the norm, it’s smarter to shop around. Interview at least three agents before deciding on the one you want to work with. 

During the interviews, ask these questions to help assess whether an agent is the right fit you:

  • Do you work as an agent full-time? As in most professions, work experience doesn’t guarantee skill. That said, much of real estate is learned on the job.
  • How long have you been in the business? Generally, the more experience an agent has, the more they’re tapped into the local market. 
  • How many homes have you sold in my neighborhood in the past year? You don’t need to find an agent who specializes only in your community, though that would be ideal. You do want someone who has recently sold at least a few homes in your neighborhood and knows the local and hyper-local inventory.
  • What’s the typical price range of homes you sell? Most agents work across multiple price points, but you don’t want an agent who has never sold a home in your range.
  • What’s your fee? An agent should be able to articulate their value and explain their commission rate.  
  • How will you market my home? You don’t want to hire someone who’s just going to stick a For Sale sign in your yard and call it a day. The agent should present a comprehensive marketing plan for your listing. This should include strategies for staging your home, taking professional photographs of your home, promoting the listing on social media, marketing to other brokers, and scheduling open houses.
  • Will I be working with you directly, or with a team? Some agents lead or work as part of a sales team. The lead listing agent shares client responsibilities with other agents. Where one agent may handle private showings for a listing, another may host open houses. A benefit is that for the same fee, you get many people working for you. But if you want the sole attention of the listing agent, you may want to stick to a one-on-one arrangement. 
  • Will you provide one-on-one service? Whether you’re working with one agent or a team, ask how responsive they can be to you, your timeline, and your goals.
  • How long on average are your listings on market? Your average sold-to-list price? This can help you suss out whether the agent is a solid marketer and negotiator. These are real estate stats that the agent can pull from your local multiple listing service, or MLS. 

The bottom-line: It’s in your best interest to pick an agent who understands your goals, fits your personality, and can get your home sold for top dollar. When you meet someone who can offer all of the above, congratulations — you’ve found your listing agent.

Rountree Realty is always happy to go over the listing process, answer any questions you may have, and help you sell your house. 

December Newsletter

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December is here! The last month of the year!
In the December issue of our monthly newsletter you will find events during this month, featured listings, and market trends.
Click the attachment below to check it out.
Please don’t hesitate to reach out with any of your real estate needs.

December Newsletter

Duke Rountree
Rountree Realty Corp.
Broker / Owner
Call / Text 352-572-1739
Info@Search352Homes.com
Search352Homes.com

Homeownership Creates Wealth

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People always debate the pros and cons of owning a home. While there may be many aspects to consider, we have found a new statistic that is very important to know.

Homeownership presents a great pathway to build wealth. Among all families, the ownership of a primary residence typically accounts for 90% of total wealth, based on the 2019 Survey of Consumer Finance data. Among those in the bottom 20% of the income percentile, it’s even more: The median value of holdings for a primary residence accounts for 99% of total family assets. For top earners, however – the top 10% income bracket – it’s 42%.

Housing wealth accumulation takes time. It’s built up slowly by paying off mortgage debt and through price appreciation. And while home prices can fall, prices tend to recover and go up over the long term. As of September 2020, the median sales price of existing home sales was $311,800 – a 35% gain since July 2006 when prices peaked at $230,000.

Florida is also becoming more and more popular to homebuyers. About 1,000 people move to Florida everyday because of the appealing aspects when purchasing a home. Florida residents pay no state income or estate tax, and receive a homestead exemption of up to $50,000 on a primary residence and a 3 percent annual cap on home assessments. The state’s population has grown by about 343,000 in the last year, to about 22 million residents.

Homeowners who spend a lifetime working, raising families and paying mortgages have a greater net worth later in life. Don’t miss out on this opportunity.  

 

Check out this link for more information:

https://www.floridarealtors.org/news-media/news-articles/2020/11/homeownership-creates-wealth-even-if-thats-not-goal

November Newsletter

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October has turned into November and there is still so much left to do. In our November issue of our monthly newsletter, you will find, events, featured listings, and market trends. Click the link below to check it out. Please don’t hesitate to reach out with any of your real estate needs. 

Duke Rountree
Rountree Realty Corp.
Broker / Owner
Call / Text 352-572-1739
Info@Search352Homes.com
Search352Homes.com

November Newsletter

How Coronavirus Has Impacted Home Buying

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Impacts of Coronavirus

The COVID-19 pandemic has impacted everyone in many different ways. From having to quarantine, working from home, schooling from home, workouts from home, it’s easy to say that people are spending more time in their homes. This has led many people to wanting a home with more space or designated areas for certain activities. We have gathered some statistics on this topic.

Changes in Planning to Buy a Home

Three-quarters of homebuyers who plan to buy a home within the next 12 months say the coronavirus pandemic has impacted their home buying plans: 25% said it caused them to move or speed up their timeline, 20% said it caused them to delay moving plans and 17% are now looking for a less expensive home. Specifically:

  • 16% said the pandemic has caused them to want to move
  • 15% said it caused them to move sooner than originally planned
  • 6% chose both options

Home Preference Changes

  • 21% want a designated area to work from home
  • 21% want more outdoor space
  • 10% of respondents now want a bigger home
  • 7% want a designated space for children to learn from home

Why Changed Plans?

  • Of people planning to move, 55% said low mortgage rates are a factor in their changed plans
  • 52% said spending more time at home is a factor
  • 40% said working from home contributed to their desire to move

If the Coronavirus pandemic has caused your family to be spending more time at home and you’re now thinking about looking for a home with more space, Rountree Realty is always here to answer any questions you may have and help achieve your real estate goals during these crazy times.

October Newsletter

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September has come to a close and it’s time to start looking forward to fall.
In our October issue of our monthly newsletter, you will find fall events, featured listings, and market trends. Click the link below to check it out.
Please don’t hesitate to get in touch with any of your real estate needs.

Duke Rountree
Rountree Realty Corp.
Broker / Owner
Call / Text 352-572-1739
Info@Search352Homes.com
Search352Homes.com

October Monthly Newsletter

We Want To Sell Your Home

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Have you thought about selling your home? It can seem overwhelming and confusing at times. That’s why Rountree Realty has a step by step plan to get it done!

When you reach out to Duke Rountree with Rountree Realty Team, here is what will happen:

First Step: Consultation and CMA (Comparative Market Analysis) 

    • We will have a phone consultation and set an appointment to preview the home and property.
    • We will meet with you to learn what expectations you have for selling your home.
    • We will tour the home with seller, noting all features and improvements for our CMA.
    • We will do a CMA (Comparative Market Analysis) to evaluate the value of your home.
    • We will suggest and advise any changes beneficial in making your home marketable.

Second Step: Pricing and Marketing Preparation

    • We will schedule an in-home presentation to discuss the CMA, Pricing & Marketing Strategy.
    • We will prepare all documents (Listing Agreement, Seller Disclosure & Listing Data Entry Form).
    • We will schedule professional photos (interior, exterior and drone). 
    • We will do a 3D virtual tour of your home to show every viewpoint. 
Third Step: Marketing The Home for Sale
 
    • We will have your home posted on MLS (Multiple Listing Services).
    • We will also use Zillow, Realtor.com, Homes.com, HomeFinder.com, and 100’s of additional websites to sell your home.
    • We will showcase your home on www.search352homes.com website through our Blog, Featured Listings, and Map & Local Area Page.
    • We will mail postcards to neighboring properties.
    • We will create colorful Features & Benefits flyer (in home for buyers and sent to REALTORS) .
    • We will use our company’s professional signs and Supra electronic lock boxes.
    • We will market your home for sale on our social media platforms (Facebook, Instagram, Twitter & Blog).
    • We will do an Open House (if possible).

Step 4: Follow up and Feedback

    • We will give monthly updates on price, market changes & effects.
    • We will follow up with Realtors and buyers for feedback on your home.
    • We will assist in interim Seller financing to use FHA, VA, or USDA depending on the situation.  
Step 5: Offer, Contract and Closing
 
    • We will represent you upon presentation of all contracts/offers.
    • We will assist in negotiating the highest possible price and best available terms.
    • We will keep you advised on the status of the mortgage (approval, appraisal, underwriting), title search & examination, inspections (home, termite, water test & septic), survey, etc.
    • We will arrange the final walk through with buyers.
    • We will review the final closing statement prior to closing day(no surprises!!)
    • We will deliver your final check at closing. 

Rountree Realty Team and Duke Rountree are dedicated to helping people sell their homes and assisting every step of the way. Contact us to get your home sold!

Back To School

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It’s that time of year again… Back to school is here! School is looking a little different for everyone this year as a result of Coronavirus. Whether the students and teachers are doing school from home or actually in the classroom, this is a stressful time for everyone.

It’s no secret that teachers go above and beyond to provide their students with positive and fulfilling educational experiences. Doing that this school year is even more difficult. Teachers are having to buy even more school supplies than normal to abide by COVID-19 safety procedures in the classroom. 

Here are some way that we can all help teachers and students:

  1. Reach out to see what teachers specifically need.
  2. Donate to the classroom of teachers doing in person learning.
  3. Donate to the teachers who are online and need help.
  4. Check with the students and see what they need.
  5. Continue to show up and help throughout the entire school year.
  6. Share this resource with others to bring awareness to what teachers and students need.

You can reach out to us here at Rountree Realty if you have any questions on how to help. These are difficult times for everyone and the more we can help each other out the better!