Why spend tons of money on what appears to be the same job?
Why spend tons of money on the appraiser you hired by the bank to decide and estimated fair market value of the home. The banks require an appraisal because it protects them instead of what most think, the buyer. The buyer pays for the appraisal usually around $425 or more depending on square footage.It’s not an option. It’s a requirement.
On the other hand, the various home inspectors are as follow. Pest control operator, property home inspector, roof inspector, and chimney inspector. They are hired by the buyer to inspect the condition of the home. It is usually valid on the day the property inspector does his inspection. If the condition changes after that date the inspector is not responsible,
Why spend tons of money?
The buyers pay for the home inspections. In some occasions the seller will pays for the inspection. This usually happens when the property was put on the market for sale or when they may accept an offer from a Veteran under a VA Loan. If sellers use their own inspectors, both pest and property, it done during the pre-listing period.
Your costs for home a inspections range in price between $450-$650 for a home inspection. $175 is the common cost for a chimney inspection.
What’s the problem?
Home buyers tend to believe when they order a home inspection they know the condition of the property. If it’s satisfactory then all is well. From a conditional viewpoint they would be correct.
When the home Appraiser gives the lending institution the market value of the home it is for current market value. This is based on various factors. Pre-determined factors are consistent. There is a standard used by all certified appraisers. Appraisers use standard appraisal factor based on each property being appraised in order to establish a base for everyone.
Types of appraisals
There are three primary types of real estate appraisals. When buying a home the sales comparison approach is used. The other two types are the “cost approach,” and the “income capitalization approach”. What the appraisal does is compares other like properties to the the home you have an offer on. The Appraiser will use this data to determine value. The homes compared will be within a close proximity to the subject home needing a new loan (the one your just purchased).
They also will only use homes which closed escrow in the past 90 days. This is why it is important for your Realtor to do a Comparative Market Analysis (CMA), before you submit any offer on any home.
The appraisal is meant to protect the lender of your home loan to its true value. If the appraisal is less than your offer price, you can be assured your loan will be turned down. Which means, the lender is less likely to give you the loan for your new home. Lenders are not in the business to foreclose on homes. Being a realty company is not the best use of their resources, Banks are in the business to make money off of their money through collecting interest.
The Golden Rule
When buying a home usually the Golden Rule will be the deciding factor on whether you get a loan to purchase a home or not. Oh, you don’t know about the Golden Rule I am speaking about? It’s the one that state…”those with the gold make the rules”.Your lender and your Realtor need to know up front any issues with your credit. This will make sure your approval is able to meet the standard set by your lender for home loans. The best way for you to find out what that would be by asking your loan agent in the beginning of your loan process.
What to do now?
Need more information about the home buying process? There is an easy 3-step process you can take to help you.
1.) Take out your cell phone
2.) Look up my number (hint: 650-346-7366)
3.) Call me immediately
Once you call we can discuss what is most important to you about the home buying process and I will answer your questions accurately. There is not any cost or obligations. Our goal however, is to demonstrate beyond a doubt how you will want Cliff Keith and Team in your corner as you move forward with your home buying process. You will then hire us to help you with all your real estate needs.[Tweet “Why spend tons of money on what appears to be the same job?”]
SF Bay Homes
Secondary phone: 650 346-7366
Fax: 650 597-1221
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