You may think all of the hard work is over once you've found a buyer for your Glenview home, and an offer has been accepted. Let's hope you're right. However, there are some things that still have to be done to ensure that your buyer can get the money he needs from his lender.
The first thing is a general inspection of the home. There may also be a second inspection required for termites, or as termite inspectors like to call them, WDO. WDO stands for wood destroying organisms and could actually mean something more than just your run-of-the-mill termite.
After your home has passed the hurdles of these two inspections and has been certified as a wonderful house with no WDO or other problems that could undo your deal, there is one more thing that the lender will require, and that is an appraisal. The appraisal is different from the inspections in that the appraiser does not do such things as test appliances, go up on the roof, or look down the chimneys.
The appraiser should be state licensed and is considered an objective third party with no interest, financial, or otherwise, in the house. The appraiser's job is to determine the value of your property, and he will generally do that by using one of the two following methods:
The first method is by Sales Comparison. The appraiser will compare your house with recently sold properties similar to it in the same area. He will make adjustments between the subject property and the comparison properties, or comps, to make sure the home features equal out. He can then set a value on your home according to the values already established by the area comps.
The second method is the Cost Approach. This method is best done on new housing where the building costs are available. Using these prices, the appraiser is able to set a value by establishing what it would cost to replace the home.
After the appraiser looks over your house and does his analysis, a report will be generated for the lender. It will include the following items:
1. Details about your property along with comparisons to three similar area properties.
2. An evaluation of the overall real estate market in your area.
3. A statement of any problems or serious flaws that the appraiser notices while checking your property.
4. Notes about the surrounding area where your house is located.
The bottom line of an appraisal is that it needs to be high enough. This usually means the appraisal should value the house at the same or more than the amount the buyer and seller have already agreed upon as the selling price.
The lender needs to feel comfortable in lending the buyer the amount of money he needs to purchase the property, and lenders feel comfortable when they believe they could re-sell the property and get their money back if the buyer defaults on the loan. Other things, such as private roads to access the property or the length of time the appraiser feels it would take to sell the house, can also be a stumbling block for the lender.
There are ways to take care of all of these problems when the buyer, seller, and lender are willing to work together to come to a solution that they are all happy with. Your Realtor® can be a big help in these negotiations, so the best way to go when selling your home is to get a real estate agent who is experienced in all facets of buying and selling property.
The Marla Schneider Team is the Realtor® you're looking for when it comes to buying or selling your Glenview home. Give us a call today at 847-657-3790 or contact us online. We're here to help you with all of the ups-and-downs of buying or selling your biggest investment.