Is a For Sale By Owner (FSBO) prepared to understand and or deal with an appraiser, and are sellers aware of the challenges they may face by selling their home on their own.
This might seem beyond basic, but sellers might have preconceived notions, correct or incorrect about an appraiser’s role.
The appraiser, when hired by a mortgagte lender to conduct an appraisal for purposes of making the loan, is essentially the eyes and ears of the bank.
They are supposed to be unbiased and objective, and they will attempt to validate the contract sales price of the property (known as the “subject property”) for the lender making the loan.
This means they will do a physical visit to the property to measure the heated and cooled living space, take pictures and do a visual inspection of both the inside and outside with respect to lot, location view, etc.
Their walkthrough and documentation of the property will serve as the basis for their research to find three to six active, under contract and sold comparable sales that are in the immediate neighborhood as close to the subject property as possible.
But I’ve heard many a seller (and buyer) think they were some sort of inspector. Appraisers will not inspect or check any elements in the house, and they will not walk on the roof. If they observe something of concern, they will note it on the appraisal, such as a stain on the ceiling, tree limb on a roof or potentially a leaning fence.
An appraiser holds a state issued license based on completing coursework and passing exams to become licensed.
Depending on the state, they must work under a more experienced appraiser for a designated length of time before they can go completely on their own. There are different levels of appraisers based on their experience levels.
Things that could be noted also depends on the kind of loan being done. If the loan is Federal Housing Administration (FHA) or the Department of Veterans Affairs (VA), they will closely scrutinize these kinds of things compared to a conventional mortgage.
2. What information should an appraiser have?
The appraiser will need an MLS sheet, tax record, any floor plan or survey documents as well as a list of improvements and upgrades that have been done to the home.
As your listing agent, I have the expertise to provide all of this to the appraiser before their visit. The more information the better. The goal is to make it as easy for the appraiser as possible.
They are typically running from appointment to appointment each day and inside numerous properties, and this helps make sure they have a handy reference and won’t omit anything.
Three major real estate brokerages are following counterparts including Realogy in endorsing a bill that would ban LGBTQIA housing discrimination nationwide. I joined REMAX in 2002 for their compassion, and expertise working with buyers and sellers.
Just in time for Pride Month 2019, the annual June Celebration of LGBTQ rights and advocacy in the U.S., three major real estate brokerages — Compass, eXp Realty, and Redfin — all confirmed to Inman news this week for the first time that they support the Equality Act, a proposed update to the U.S. Civil Rights Act that would make it illegal for anyone in the country providing various services, including employment, housing and related services, to discriminate against people based on sexual orientation or gender identity.
Further, all three companies told Inman they are taking steps to join the advocacy group the Human Rights Commission’s wider business coalition supporting the legislation, which includes numerous other real estate firms and businesses across industries.
“We support the Equality Act as part of our commitment to fulfill our mission – to help everyone find their place in the world,” a spokesperson for Compass told Inman.
“Redfin fully supports the Equality Act and are now in the process of joining the business coalition,” a spokesperson for the company told Inman.
The Equality Act would add non-discrimination protections for LGBTQIA-identifying individuals into the nation’s civil rights laws, which include the Fair Housing Act.
It passed in the Democrat-led House of Representatives The Fair Housing Act, passed into law in 1968 and now a bedrock of the real estate industry, makes it illegal to discriminate based on race, color, religion, sex, familial status or national origin in the renting or selling of housing and related services. It does not, however, specifically mention sexual orientation or gender identity as protected categories.
In the absence of a uniform specific federal law banning discrimination against such persons in housing and other services, 20 states in the U.S. have passed their own laws banning housing discrimination based on sexual orientation and/or gender identity.
Realogy, RE/MAX, Zillow and HSF Affiliates have all previously announced their support of the legislation, adding the three most recent companies to a growing list. The National Association of Realtors (NAR), the largest industry trade group in the nation with around 1.3 million registered members, has also recently expressed support for the Equality Act after being urged on by the industry advocacy group the National Association of Gay and Lesbian Real Estate Professionals (NAGLREP).
BY PATRICK KEARNS Staff Writer for Inman News.
Many Broker and agents may ask what I share so much to everyone in my blogs. In a world where buyers can find homes faster than Realtors can pass them along, this is one of the true benefits we can offer our clients. Although the overall purchase price is the factor with the most weight given to it, there are several others we can work with to help our clients stand out.
1. Aggressive closing dates, large deposits
The most popular ways to put forward a strong offer are to have aggressive closing and a large deposit to hold back as a binder or escrow.
After price, these are typically the second and third items looked into, respectively. Chat with the loan officer to see how tight you can realistically make the dates without requiring an extension.
Once you make a determination, explain to the myself or another lilsting agent the conversation you had and that those dates are not just feasible, but to be expected.
Follow that up by making the deposit a full lump sum at contract execution rather than in various disbursements after inspection, etc. Putting it all upfront shows the seller just how into the property you are.
The value-added services we offer and our clients appreciate most Three tips to help us offer the ultimate in white-glove real estate service READ MORE
2. Pre-approval letter
I work with many of the same loan officers deal after deal. We have come up with a pre-approval letter that shares with the sellers that all income and asset documents have been received and reviewed, credit run, and file is ready to move to underwriting.
This shows that the buyer is pre-approved, not just pre-qualified. Asking the loan officer to provide you with the automated underwriting engines (AUS) findings and adding a brief explanation on how to read them also shows the homework done by the loan officer to pre-approve my buyers.
This can express to the sellers just how strong of a mortgage candidate the prospective buyers are, and it can give them confidence the deal will go through according to plan.
3. Waive inspections
Waving inspections is another way of getting clients into a home. The best way to do this and protect your buyers at the same time is with “for buyer’s purposes only” inspections.
This gives buyers an opportunity to back out if they perform an inspection and severe issues come up. This is also a situation where the buyer, should know the property and have a good idea of what condition it is in.
It is out of our scope to be building inspectors, but you should be able to recognize asbestos wrap, missing plumbing, outdated electrical, past its life roof, etc.
4. Send in a full offer
Sending over a full offer also is a great way to gain acceptance. When submitting an offer, always be sure to include the pre-approval letter, copy of deposit check and all related disclosures and addendums.
If it is a FHA mortgage, it’s a must to be sure to include the FHA Amendment Clause as well. This way the seller has everything and can execute the contract without needing to go back and request further information.
Creating strong offers that beat out other buyers and getting our client the home they want is a win for all.
Material in this article is referenced by the primary writer BY MICHAEL MAYNARD May 31, 2019
“IT”S FLORIDA LAW!” As a member of the National Association of Realtors, and Florida Association of Realtors, I receive weekly and monthly tidbits on the Law! This is just one of so many matters I feel is important to my Buyers and Sellers, and Extremely informative! It’s our responsibility as your Realtor to protect your interest, and this is just one way engaging a Realtor supports the “VALUE” we bring to the table. Understanding the savings, protection, and stress free representation during the long or short journey to your day at closing are dollars saved during the transaction process!
Wanted to share this announcement as it references RE/MAX
Following the announcement of the Redfin Direct service that lets consumers make offers without agents, two companies are parting ways
BY PATRICK KEARNS Staff Writer for Inman news
The deal is off: RE/MAX and Redfin are ending their nascent exclusive referral partnership after Redfin introduced a new platform last week that would allow consumers without buyers’ agents to place offers over the internet on Redfin-listed homes in Boston.
RE/MAX CEO Adam Contos sent a letter to his owners, brokers and agents last week in the wake of Redfin’s announcement and seemed to re-affirm his commitment to the Redfin partnership. On Monday, however, Contos sent a letter announcing the dissolution of the partnership.
“Given Redfin’s recent announcement regarding a program that would encourage buyers not to use agents on listings where the seller is represented by Redfin, we cannot continue with an official, corporate-level relationship at this time,” a spokesperson for RE/MAX said in a statement. “We have begun the process of dissolving our exclusive referral agreement with them beginning today.
The two sides had originally signed a two-year contract, giving RE/MAX agents first access to Redfin’s partner agent program in areas where Redfin didn’t have a presence, which was 5,000 ZIP codes across the U.S. and in Canada.
“We still have mutual esteem between the two companies,” Redfin CEO Glenn Kelman told Inman in a phone call.
Redfin announced last week it was quietly testing the pilot program in Boston, called, “Redfin Direct,” which would present prospective buyers the option to make offers on a Redfin-listed home directly from the company’s website.Homesnap Pro hits 5 years and 1 million agents How we did it and what comes next READ MORE
The goal was to give the seller a competitive offer that would only require a 2 percentage commission – 1 percent to the Redfin listing agent and a 1 percent transaction fee.
There was an immediate concern in some corners of the industry that the move would greatly impact buyers’ agents. Redfin itself, however, said it would still employ buyers’ agents and had no plans to cut them out of deals.
“That program goes against every value RE/MAX has had for more than 45 years,” Contos said in the letter announcing the end of the partnership. “I feel very strongly and passionately about that, as does out Board of Directors and my leadership team.”
My comment: Since I’ve been with RE/MAX since 2002 the practices of these marketing giants does not serve the best interest of buyers and sellers. This is just another practice that is changing the way people buy and sell real estate. RE/MAX agents pride themselves in protecting it’s buyers and sellers by bringing out potential costly clauses that otherwise could hinder our buyers and sellers final outcome.
I had a question thrown at me the other day. My client/customer refuses to adjust the price of their home because they must net X amount! Once we procure a purchase agreement, “how can I be certain it will close?” We can never predict an outcome of this nature, however with some thought and preparation, and informing the buyers that the appraisal may not match the contract price we have several options.
A) Presuming this is a CASH offer an appraisal is not necessary, however if I’m representing the buyers, I would certainly advise this. In a perfect world, I’ve seen this happen! Back before the Real Estate crash of 2008, lenders nor cash buyers cared! Mortgage brokers wanted the deal, buyers wanted the home for fear they would loose their chance of obtaining the home of their dreams. The buyers made offers on half a dozen homes and lost their bid, due to more than multiple offers in a transaction.
B) In today’s world, buyers have many choices. It’s my opinion buying a home that was or is a builder’s model, is a very bad idea. The buyer is obtaining a property that has exceptional features and that can be great, however when this homeowner attempts to sell, the challenge? Ninety percent of the time it will not appraise, you ask why? Living in a home with remarkable features is extremely satisfying, it’s extremely challenging to o get your equity out of the home. Appraisers are required to appraise, by location, and the bare bones of the property, nothing more.
C) Many appraisers lost their licenses in the late 2000 early 2010 evaluation due to pressure and practices that were not always the most professional. The state pounced on these carless individuals and legislation changed the requirements. The most stringent of this criteria, requiring a Bachelor’s degree and internship in order to obtain a license.
D) Appraisers can be overwhelmed with orders, and to streamline their business they hire or contract data collectors and at times have individuals perform drive by observations with photos. He or She examines the data and photos, thus determining the value and go to the next appraisal. An appraiser is not required to complete an analysis with any more detail. Missing content value, is actually something appraisers ethically cannot include in their value.
I will continue to share examples and go into detail defining the term diminishing return, all of which are factors in an appraisal. To be safe in any real estate transaction, keep in mind the bones and location are the subject matter, not detailed amenities offered in a model home, or a home with too many amenities to support the market value.