Buyers in today’s market often have questions about the importance of getting a home appraisal and an inspection. That’s because high buyer demand and low housing supply are driving intense competition and leading some buyers to consider waiving those contingencies to stand out in the crowded market.
But is that the best move? Buying a home is one of the most important transactions in your lifetime, and it’s critical to keep your best interests in mind. Here’s a breakdown of what to expect from the appraisal and the inspection, and why each one can potentially save you a lot of time, money, and headaches down the road.
The home appraisal is a critical step for securing a mortgage on your home. As Home Light explains:
“. . . lenders typically require an appraisal to ensure that your loan-to-value ratio falls within their underwriting guidelines. Mortgages are secured loans where the lender uses your home as collateral in case you default on the agreed-upon payments.”
Put simply: when you apply for a mortgage, an unbiased appraisal – typically required by your lender – is the best way to verify the value of the home. That appraisal ensures the lender doesn’t loan you more than what the home is worth.
When buyers are competing like they are today, bidding wars and market conditions can push prices up. A buyer’s contract price may end up higher than the value of the home – this is known as an appraisal gap. In today’s market, it’s common for the seller to ask the buyer to make up the difference when an appraisal gap occurs. That means, as a buyer, you may need to be prepared to bring extra money to the table if you really want the home.
More than ever, our homes have become an integral part of our lives. Today they are much more than the houses we live in. They’re evolving into our workplaces, schools for our children, and safe havens that provide shelter, stability, and protection for our families through the evolving health crisis. Today, 65.3% of Americans are able to call their homes their own, a rate that has risen to its highest point in 8 years.
June is National Homeownership Month, and it’s a great time to reflect on the benefits of owning your own home. Below are some highlights and quotes recently shared by the National Association of Realtors (NAR). From non-financial to financial, and even including how owning a home benefits your local economy, these items may give you reason to think homeownership stretches well beyond a sound dollars and cents investment alone.
The real estate market is expected to do very well this year as mortgage rates remain at historic lows. One challenge to the housing industry is the lack of homes available for sale. Last week, move.com released a report showing that 2020 is beginning with the lowest available housing inventory in two years. The report explains:
By doing your homework and thinking about the process as four smaller stages, shopping for a home can be less complicated and, perhaps, even enjoyable.
Buying a home is an intimidating endeavor. The process can be time-consuming, it has its own language of unfamiliar terms and acronyms, and it involves one of the largest outlays of cash you’ll likely make in your lifetime.
The steps, process and details of buying real estate can be intimidating and overwhelming. For the most part, however, the transaction should follow these seven steps.
The steps, process and details of buying real estate can be intimidating and overwhelming to the first-time (and even the veteran) buyer. If you’ve never done this before, you likely have no idea how the process begins or what to expect.
Here’s a secret for first-time homebuyers: No two homebuying experiences are ever the same. Even with a Zillow sneak peak, a shopper never really knows what homes will look like until they see them in person or what snags they’ll encounter once mortgage lenders and home inspectors get involved.
For some people, it’s the unpredictability of the experience that makes it most exciting. Others prefer to go in armed with as much knowledge as possible. If you fall in the second camp, and you’ve been eyeing open houses, this nine-step guide can help you prepare for your first time buying a house.