Okay, so how do I do this?

2 Aug

After the release of my new book, I received several emails from families who are REALLY thinking hard about making their next home “a Corten Steel one.”

And that means selling their present homes FIRST. GULP!

The mortgages that some families carry today are “family killers.” And as the economy and purse-strings tighten, sometimes it just makes sense to look at things in a different light, and consider doing things differently.

A dear friend of mine is trying to sell her home, in a pretty grim marketplace. It’s agonizing. She’s not alone.

All across America, real estate is taking a beating, and people who are trying to make changes are faced with bitter recipes for change.

One of the first steps you need to take is to get a decent appraisal of what you have.

Knowing what you have will give you a starting point.

While I’m not a Realtor, I’ve participated in the process often enough over the years. And, I’m lucky that I have a few pals that ARE Realtors (the GOOD kind, that work their butts off to help YOU, and not just themselves) and I’m going to send out some emails asking them to contribute to this new “thread” as well.

THEY participate in this daily and I’m sure that they’ll have valuable stuff to add.

But here’s a starting point;

For a homeowner, a real estate appraisal establishes “what you have.” This is essential, in fact some Realtors call it the “linchpin” to buying or selling a home or any real estate property. This appraisal sets the benchmark and helps establish the value of the property transaction that will occur among the buyer, seller, real estate agent and ultimately, the mortgage lender.

There are some things that you should know about an Appraiser before they show up on your curb.

By law, an appraiser must be state licensed to perform appraisals prepared for federally related transactions. And, you are entitled by law to receive a copy of the completed appraisal report from your lender.

Appraisals aren’t easy. If they were, everyone would be doing them. So to help the appraisal process go smoother, it’s beneficial to have these documents ready for the appraiser:

  • A plot plan or survey of the house and land (if you have one available to you).
  • A floorplan (if you have one) showing the room sizes and square footage.
  • Information on the most current purchase transaction of the property in the last three years.
  • A copy of the current listing agreement and broker’s data sheet and Purchase Agreement if a sale is “pending”.
  • Assemble an “important points sheet” (some realtors call this a “brag sheet”) that details all of the major home improvements and upgrades you’ve done, the date of the installations, the cost of those upgrades (for example, the addition of central air conditioning or a roof replacement) and permit confirmation (if required/available).
  • Written property agreements, such as a maintenance agreement for a shared driveway or common spaces.
  • A list of personal property that will/could be included in the sale of the home.
  • The Title policy that describes encroachments or easements.
  • The most recent real estate tax bill and or legal description of the property.
  • A home inspection report (NOT the same thing as an appraisal), or other recent reports for termites, synthetic stucco wall systems, septic systems and wells.
  • Information on “Homeowners Associations” or condominium covenants and fees.
  • A list of “Proposed” improvements if the property is to be appraised “As Complete”.

Once your appraiser has arrived, let them do their work. You don’t need to shadow the poor guys/gals, scrutinizing their every move. You do not need to accompany him or her along on the entire site inspection, but make yourself available so that you can answer questions about your property and point out any home improvements.

Here are some other suggestions:

Accessibility: Make sure that all areas of the home are accessible, especially the attic and crawl space areas.

Housekeeping: Appraisers see hundreds of homes a year and will look past most clutter, but they’re human beings too! A good impression can translate into a higher home value. If you’re one of those “Hoarders” that we see on TV, spend some time cleaning up and organizing first.

Maintenance is IMPORTANT! Repair all the minor things that you ca n find; like leaky faucets, missing door handles and trim.

I’m reminded that you should note this too: FHA/VA Inspection Items – If your borrower is applying for an FHA/VA loan, be sure to ask your appraiser if there are specific things that should be done before they come.

Some items they may recommend might be: Install smoke detectors on all levels (especially near bedrooms) and put in NEW batteries; install handrails on all of the stairways; insure that windows and doors operate properly; remove any peeling paint you can find and repaint those areas; fix drooping or sagging wallpaperprovide easy inspection access to the attic and crawl spaces.

I know that some of these sound like “Home Inspection” points, but they do “color” the way that the appraiser sees your home.

Make the task as simple as you can for the appraiser. You WANT these people to be in a good mood. Your resale value may depend on it.

And I have it on good authority that appraisers like good coffee or cold sodas, and homemade chocolate chip cookies… 🙂

Okay. That about covers my input here. If you’re a Realtor I tapped for insight, it’s your turn.

Stay tuned.


2 Responses to “Okay, so how do I do this?”

  1. clark August 2, 2010 at 8:27 pm #

    Good information regarding how to help an Appraiser do their job. Getting an appraisal is a keystone to pricing a property for sale.
    Bringing a real estate broker who is knowledgeable in your market area is also critical.
    For their fee, Appraisers are essential and must conform to strict guidelines to arrive at their estimate of value; a real estate broker often has more leeway in the factors they can use in their CMA reports. They present their information in a manner that should help the homeowner get a sense of the “market” for their property. Real Estate brokers will know how Buyers are looking at property and property values and usually can help the home seller get the highest price. Especially in a Buyers market like we see today, listing with a broker will almost certainly get the homeowner more money than if they tried to sell it on their own.

    One of the most critical concepts we real estate brokers help our Sellers understand is that of “market value”. Market value in not ‘set’ by the broker, or the Appraiser or the home Seller. It is ‘set’ by the Buyyers, by the marketplace. The job of your real agent is to help you learn what the current market value is, what are the qualified Buyers in the market willing to pay for a given house. This is crucial to putting a price on the house that is going to bring the most attention from Buyers and eventually will bring in Offers.

    The best advice is, find a good real estate Broker that has experience and expertise in (your) local market and add them to your team. Be sure to take the time to find a agent that you are comfortable working and you feel you can trust. Everything else will follow from that.

  2. ted yrizarry August 3, 2010 at 5:49 am #

    Pretend one had aquired a few acres, built a ISBU cabin and placed it there. Do the same rules apply? Could said cabin be considered a basis for a possible “equity loan” for something like sinking a water well or adding a wind generator…? Stuff like that?
    While I am intending to do mine as borrow free as inhumanly possible, I was just curious.?. Meow

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