With Terry Story, 26-year Veteran Real Estate Agent with Coldwell Banker in Boca Raton, FL
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Noted real estate veteran, Terry Story, talks about the importance of appraisals when you sell a house, and reminds us that we only need appraisals if there’s a mortgage involved, not if it’s an all cash deal. One in five home sale contracts get delayed over appraisal issues and of that, about 10% fail to go through.
Appraisals also have quantitative and qualitative aspects because an appraiser essentially compares the home for sale to similar properties in the neighborhood, and has to make changes for things such as an extra bedroom, a bigger or smaller covered area relative to the neighborhood median, the condition of the house, etc. So some of these adjustments tend to be approximations that are open to interpretation. For example, an appraiser may value an extra bedroom at about $2,500 but the market value of an extra bedroom is significantly higher. So when you see an appraised value, make a few adjustments of your own to reflect how the market might value differences. Additionally, appraisal values on intangibles such as, say, the views from a home, are also very subjective.
In her Real Estate Survival Guide, Terry addresses a rental scam where tenants paid the security deposit upfront, moved into an apartment where the owner purportedly lived abroad and regularly paid their rent, only to get an eviction notice a few months down the road because their rental was a bank foreclosed property, a rather common scam that targets foreclosed homes or property owned by persons living abroad. Terry’s sage advice? Always check public property records and do your homework before moving in.
If you’re in the market for a newly built home, move quickly because there typically is a lead time of at least three months before you can move in. Moreover, take advantage of still low mortgage interest rates before they start to move up. Finally, if you are selling a “smart” home, make sure you remove all your codes and passwords from the home’s smart devices lest that information fall into unscrupulous hands.