You’ve spent months looking and finally settled on the house of your dreams. The seller even accepted your offer! Congrats! It’s not *quite* time to break out the bubbly yet, though! So many home buyers and sellers have questions about the appraisal process, we wanted to make sure we addressed it on our blog! For more tips on how to buy your first home, click here!
What’s an Appraisal?
The appraisal is basically your lender making sure that the home is worth what you’re offering (in case they need to get their money back!) The lender uses an unbiased third-party to examine the home and any improvements the seller has made, as well as how it compares with similar properties that have sold in your area within the past six months.
What Does It Involve?
Appraisers take quite a few details into account when determining their valuation of your dream home! They’ll be looking very closely at the square footage, condition of the home, any improvements the seller has made and any factors that might negatively affect the home’s value. They’re not home inspectors so they won’t be looking over every little detail—they’re just getting a general idea of what the home’s worth.
What Happens Next?
Once the appraiser is finished, you’ll get a copy of the report. The fee for the appraisal is typically included in your closing costs—around $300 to $400. If the appraised value is higher than your sales price, you’re in the clear! You’ll have instant equity in the home and your lender will feel confident in loaning you the money needed to purchase it. It’s when the appraised value comes in lower than the sales price that you’ll run into trouble. The lender won’t pony up more than the home is worth so the seller either has to lower the sales price or the buyer needs to come up with the remainder out of pocket.
If lowering the price or coughing up the difference won’t work, it’s not the end of the world! You can choose to walk away from the contract and have your earnest money deposit returned or even pay for another appraisal. Keep in mind: not being able to buy your “dream house” because of a low appraisal is actually a good thing—you won’t be overpaying for a house that’s not worth it!
Ever wonder why some homes sell faster than others? There are plenty of examples of similarly priced homes that had drastically different days on market! Here are our 5 best tips for speeding up a home sale:
1. Clean It Up
There’s no beating around the bush, the house needs to be clean. If you’re not sure if your house is passably clean, get a friend to give you an honest opinion or just hire a cleaning service. Ideally, decluttering and deep cleaning should happen BEFORE listing photos are taken. Don’t make potential buyers have to imagine what the house might look like tidied up–get rid of clutter both inside and outside the house and put some elbow grease into making the place sparkle! Cabinets and drawers should be wiped down, any scuffs removed from the walls and kitchen appliances polished. Shampooing your carpets or mopping the floors can make a big difference!
2. Consider Staging
Take a look at some of the other homes for sale in your area. Some of them will be vacant, some will still have the seller’s furniture and some may be professionally staged. Which looks more appealing to you? Staging is an extra expense but for many sellers it is worth the trouble! You can cut down on staging costs if the home is only staged for the listing pictures. If you’re really pressed for time or can’t afford to hire a staging company, focus on staging the bedrooms and living rooms
, adding art pieces strategically to make the home feel more comfortable.
3. Professional Listing Photos
Dimly lit iPhone pictures aren’t going to cut it nowadays! The pros know the best ways to frame and shoot various rooms and can adjust for non-optimal lighting situations. Professional photographers will also have wide-angle lenses to fit the entire room in the photo and video and drone capabilities if your home requires them. Your CBE agent
will know several great real estate photographers who can make your home look amazing!
4. Make It Available
Once your home is on the market, get ready to spend a lot of time away from your home so buyers and real estate agents can view the property comfortably without you or your pets lurking around. For at least the first week or so that the home is on the market, it’s best to accept all showings within normal viewing hours and to make the home as accessible as possible.
5. Price It Right
Bottom line: Buyers are mostly concerned with their bottom line. Pricing the home appropriately from the beginning will drastically cut down on days on market and help you capitalize on the initial buzz from potential buyers. Your Coldwell Banker Elite agent
can help you decide on the right price for your home by looking at a variety of factors: your house’s age, any updates, square footage, and the school district. They can also pull up comparable homes, or “comps,” that have sold in the area to evaluate the best price.
Most sellers (wrongly) assume that upgrading your home before putting it on the market is a waste of money. Today’s savvy buyers may take a second look or even end up paying more for a home with energy-efficient features! With all of the smart home tech coming out nowadays, it’s easier and cheaper than ever to update your home! Here are a few home improvements you can make without spending a fortune.
Install Energy-Efficient Products and Features
Consider investing in energy-efficient appliances throughout your home such as a washer and dryer or refrigerator. If you can’t afford to make that big of an investment, a smart thermostat or smart lights
can help cut down on energy use and utility expenses. Smart thermostats learn the user’s habits and preferences with the ultimate goal of creating cost savings and comfort. In addition to making the future homeowner’s life easier, savvy modern buyers will recognize immediately the value of having a smart home in terms of energy-efficiency.
Energy-efficient window replacements
can also make a difference in attracting buyers and lowering utility bills. Windows are the first place many homeowners and energy auditors examine for leaks and cracks that can lead to higher energy bills. New windows can really spruce up the exterior of the home, too!
Put in a New Furnace
Home heating costs can add up, and replacing old or damaged furnaces can be pricey. However, new energy-efficient furnaces are becoming increasingly popular and more affordable. It may be beneficial to conduct a home energy audit to determine where efficiency can be improved. This is a great way for you to pinpoint where in the home needs extra attention, energy-wise.
You’ve prepped your home for sale in every imaginable way–fresh paint, a deep cleaning, new landscaping, decluttered closets, even tidying up the garage! Your house looks better than it ever has and you’re ready to hit the market! Before you stick that “For Sale” sign in the ground, consider gathering these key pieces of information to make your life a bit easier down the road!
Do you have a copy of a current survey on your home? Buyers want to know about property lines, easements, conservation buffers, whether there’s room for a pool, if the property line extends to the water behind your home, etc. Providing a survey upfront will help to eliminate these types of concerns before your property is under contract.
Buyers often need to know room dimensions as it helps with determining furniture placement and to ensure their furniture will fit in the new space. As any real estate agent can attest, many hours have been spent measuring spaces while looking at homes and comparing that against the existing buyer’s furniture dimensions.
3. Utility Bills
Buyers want to get an idea of what they can expect the heating and cooling bills to be in a home. Review your bills over the last one to two years to get an average in the various seasons, or call your local utility provider as they can often provide you with information on the high, average and low costs. This information can be very beneficial when a buyer sits down to number crunch their total costs of owning a home. If you had an unusually high or low bill, provide some explanation to accompany the numbers.
4. Pest Control
If you have any type of regular pest control treatments done on your property, compile information as to who the provider is, what you have done, how much you pay and how often the company comes out to treat the property. You may want to keep a copy of your service agreement handy for the buyer’s reference.
Buyers especially want to know who a seller uses for their homeowners insurance and how much they pay. This is especially important in higher risk areas (where there are hurricanes, floods, fires, etc.) With homeowners insurance potentially more difficult to obtain in some areas, using the existing seller’s insurance company can help streamline the process.
7. Product Manuals and Warranty Documents
Gather the various product manuals for all items that will be staying in the home such as appliances, water heater, heating and cooling system, ceiling fans, pool equipment, etc. If your home came with any warranties, be sure to include these for the new owner as well. Putting all of these in one large folder makes it easy for everything to be readily accessible in one place for the new buyer.
8. Service Providers
Compile a list of all service providers/vendors and their contact information who you have used on your home: lawn service, pool service, A/C company, etc. While a new buyer may or may not choose to use these services, they will certainly appreciate having resources available to them and may elect to initially use them as they make the transition to living in your home.
9. Covenants and Restrictions, Neighborhood Rules and Information
This is key critical information for a new owner to have on hand. A contract may likely hinge on the buyer’s review of this information, so it’s easiest to have it available ahead of time. If you don’t have these, contact your neighborhood’s association president or management company for assistance in obtaining a copy. Many of these documents are matters of public record and are available by going online to the appropriate municipality’s website.
Whenever you’re ready to list, we can work together to create an informational package or binder that you can provide to prospective purchasers that come through the home with the information mentioned above. Gathering this information before you put your home on the market will save time and make the process that more efficient once you find a buyer. It may even help your home to sell faster as all of this information is available upfront, eliminating the need for guesswork and waiting on answers while another property could possibly come on the market to grab the buyer’s attention.
We’re lucky to be located near several military bases and government contractors so serving veterans and active duty military members is one of our top priorities. We’ve taken a closer look at the 2018 Veterans & Active Military Home Buyers Profile report to analyze the differences between recent active-duty and veteran homebuyers and sellers versus those who have never served.
One of our main takeaways was that differences in household composition and financing options incentivized home buying demand for veteran and active military buyers and sellers. Over half of active-duty and 41% of veterans purchased a home with no money down (100% financed) as opposed to just 7% of civilian home buyers. The majority (77%) of active-duty military used a VA loan and 15% used a conventional loan. If you’re one of those service members that might be interested in no-money-down financing, we’d be happy to connect you with loan officers that can find the right loan product for you.
Interestingly, active-duty military buyers were most likely to buy a multi-generational home with an average of 4 bedrooms and 2 baths. The report found that active-duty military buyers were most likely to have children under the age of 18 in the home. Active-duty buyers’ main reasons for moving in the future were either for a job change or to flip their current home. If “flipping” or remodeling a home as an investment before your next PCS might be something you’re interested in, we have plenty of experience finding suitable “fixer-upper” homes with enough room for the whole family!
On the other hand, veteran buyers were the largest group purchasing a home as a married couple and had the oldest median age. They were also the most likely group to purchase a home as a single male. Veterans and non-military buyers tended to buy smaller, less-expensive homes–around 3 bedrooms and 2 baths. Whether you’re looking to stay in the Northern Virginia area or relocate to the shores of Lake Anna or the peace of the countryside, we have offices and knowledgable agents all over the region to help you with your next move.
Civilian or non-military buyers typically listed a better neighborhood as their biggest reason to move in the future, and bought the smallest homes of all three groups. Non-military buyers were also the least likely to purchase a multi-generational home and moved the shortest distances of all groups.
We are so honored to assist our active-duty and veteran military members find their new “Home of the Brave” in the greater Northern Virginia region! Whether you’re looking to accommodate your growing family, downsize after retirement or just find a project home to work on before your next PCS, Coldwell Banker Elite would be proud to help.