Appraisals, Inspections and Survey
Estimating a home’s fair price.
The appraiser evaluates a home using three methods:
- “Comparative market analysis,” which the appraiser uses to find a typical selling price of a comparable home, not necessarily the highest priced home in the area.
- Interviews with real estate agents and the appropriate government real estate tax personnel.
- Touring the property, taking into account the square footage, floor plan, number of rooms and baths, upgrades, overall condition of the home, and the neighborhood.
More about appraisals:
- Although the buyer pays the mortgage loan application fee, which includes the appraisal cost, the appraiser works for the lender, which uses an appraisal as a final qualifier for finalizing the loan.
- If you question the results, you may want to request a second opinion.
- Appraisers often work on a tight deadline, right before closing. If the appraisal comes in lower than the selling price, it could hinder the loan approval process and the sale.
Using the inspection report to benefit you.
Typically the buyer pays for an inspection, but the seller may want to hire his or her own inspector even before the house up for sale. That way the seller can factor any problems into the asking price, or can choose to fix them before the house goes on the market.
Whether the seller does his or her own proactive inspection or waits for a buyer to call for one, be sure to consult your real estate broker or attorney. He or she can review the inspections report and advise you on which corrective work should be done to help facilitate a sale and which work you don’t have to do.
What an Inspector inspects:
- Heating and air conditioning
- Termites and other pests
- Dry rot
- Boat docks
- Sea walls
Making sure nothing is blurring the property lines:
Surveying is always wise so that both the buyer and seller know and agree on what is being transferred, and to ensure that the lot lines are unobstructed by things like fences, driveways, pools, garages, or sheds.
Keep in mind:
Surveyors are usually hired by the buyer, although this is negotiable.
If the survey turns up a property boundary problem, it’s a good idea to speak with your real estate attorney. A boundary problem might make title insurance more expensive or even impossible to obtain, which could affect the buyer’s decision to go through with the sale.