Avoid Appraisal Problems In HomeSale by Jeanette Joy Fisher Before you sign a contract to sell your home, check to see if the purchase offer depends on financing. Look for a clause witch states that the offer is contingent on your home's appraisal done by the buyer's mortgage lender. This clause causes many home sellers to lose the sale or to lower the sales price later. Appraisers draw on comparable market sales (comps) of local properties sold within the last six months to value your home. With today’s rapidly rising seller’s market, six-month- old information is ancient history. Appraised value does not always equal the true market value, or what the home will sell for on the open market. Realtors will give you a comparative market analysis, an informal estimate of market value based on comparable sales. Lenders, on the other hand, will use the appraised value to determine a new mortgage amount. Some lenders require that the stated property value covers the mortgage amount plus their selling costs in case of foreclosure. For this reason, a sale may fall through if a home sells on the open market for more than the appraised value, which often happens in bidding wars over hot property. We learned the importance of securing a sufficiently high appraisal when we sold a rental property in Lake Elsinore, California. We listed the house for $234,700 on Friday. By Monday morning, we had three offers: $245,000, $255,000, and $260,000. We accepted the one for $255,000 because the buyers had $80,000 down, reassuring us that they had sufficient funds. As usual, the lender sent an appraiser to review the property. This busy appraiser didn't take the time to view all the upgrades we put into the custom-built home. Even worse, he used only comps from the local one-mile radius. Because this home is close to a shopping district, there were not many homes sold in this limited area during the six-month period. The appraiser used comps six months old; during this time housing costs in Southern California appreciated around thirty percent. Sales from six months previous should have gone up in val Please visit http://www.sellfast.info/

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