Get an accurate appraisal to secure your mortgage
As you may know, it’s more difficult to get a mortgage loan these days, since the subprime mortgage crisis hit in 2007. Of course, lenders are still issuing loans; it may just take a little more work on both your end and theirs.
One of the keys to securing a loan is getting an accurate appraisal of the property you want to purchase. Lenders use information from a professional appraiser to determine your loan amount, but now the changing Breckenridge real estate market means appraisers need to research more to present an accurate portrayal of your prospective home’s worth.
As you might guess, lenders are much more cautious these days, due to declining home values nationwide. In order to reduce their risk, they want to make sure their property appraisal is correct. In today’s market, an accurate appraisal takes more time to determine, and some appraisers are raising their fees, which may affect your bottom line. (However, you can request a copy of your home’s appraisal from the lender; just ask how.) Here are some of the variables affecting current appraisals:
First of all, because of the slow Summit County real estate market, there are fewer sales in each neighborhood, so appraisers often have compare homes in other comparable neighborhoods, then make adjustments. This takes more analysis, including taking foreclosures and builder discounts on new construction into consideration.
Second, actual sales prices aren’t selling as close to the listing price as they did a few years ago. For example, a house originally listed at $600,000 may be reduced to $575,000, then sell for $550,000. So, an appraiser must analyze the situation to determine whether or not the home was listed at a higher price than it should have been to begin with, or if the lower sales price is a reflection of the neighborhood’s decrease in value. The take-home message is this: Don’t rely on neighboring listing prices to try and determine the value of your home.
Another thing that is decreasing the selling price on homes is seller incentives. Many sellers are offering to pay the buyer’s closing costs as an incentive to purchase their home. Seller incentives can affect a home’s sales price, so the appraiser needs to review closing documents in order to assess the real market value.
Appraisers are also taking a more careful look at the condition of the property — both inside and out. Buyers have their choice of homes today, so they can be picky about the condition of the property. Obviously, a turn-key home will be more valuable than a property in poor, or even average, condition. Appraisers are now comparing the shape a home is in and adjusting their reports accordingly.
In general, real estate transactions, including financing, have become more complicated since the market’s downturn. But this isn’t all bad news. Cautiousness has brought back structure and analysis to the appraisal process, which reeled so out of control in some instances that homes were valued for well over the amount they were worth, skewing the entire market. As long as they’re using accurate appraisals, lenders want to loan money to qualified buyers, no matter what the market is doing. Appraisals are now more consistent, which will ultimately lead to a solid real estate market, where buyers and sellers can trust the valuation of properties.
Real Estate House Of Representatives House Md…
I didn’t agree with you first, but last paragraph makes sense for me…