There are some huge milestones in a residential real estate transaction. The home inspection, the termite inspection and buyers’ loan approval are among the items worthy of mention. But sometimes paying such rapt attention to these big hurdles hides little dangling details that might come back haunt you when it comes time for your transaction. See if you agree with me on this one! In days gone by (say 10 or 12 years ago) few buyers bothered getting pre-approved loans before looking at homes as there were so many available and access wasn’t limited according to sanitation guidelines nor social distancing ones; nowadays things have changed though – not only is financing now more difficult but prices have also soared meaning even less inventory is out there waiting around just for us.
Sellers were happy to welcome anyone with a pulse. However, the pesky financing details are now required first before scheduling any appointments! COVID-19 has changed this and most agents require buyers to have their loan preapproved as well. This starts off the purchase process on its right foot but there’s still that matter of an appraisal – one of many steps in getting approval for your dream home.
“The whole idea is not just evaluating how much you can afford,” says real estate experts. “It also looks at everything else about what kind of house it will be buying or where they’re going when they buy something new.”
It’s a roller-coaster ride of appraisal prices and accepted offers when the market is bumping up. If you’re looking to sell, make sure your contract doesn’t remove that contingency just in case an appraised value comes back below what they’ve agreed on. Sometimes it can take weeks until lenders get reports from their appraisers so sellers are praying for good news while buyers wait anxiously too before losing out or paying more than expected at this time where everything seems inflated by comparison.
Even if you waive your inspection contingency, and the appraiser comes back with a lower value than what’s in your contract–and this can happen for any number of reasons including square footage discrepancies or other undisclosed issues beyond just simple depreciations-you’ll still have to come up with money out of pocket to make up that difference. And not only is there all sorts of pressure on buyers when it looks like their offer will be accepted (home inspections are stressful enough) but now they’re also waiting anxiously as appraisal day approaches because at stake could be tens of thousands dollars.
It’s important to have your own inspector for the house. Sellers need to make sure they have enough time and resources in order to investigate potential costs of all those repairs before listing it on the market because buyers will be looking at everything you do, from high-level overviews such as an appraisal and a home inspection right down into little details.