Why a Low Appraisal Isn’t Always a Bad Thing

Why a Low Appraisal Isn’t Always a Bad Thing

  Having worked as brokers, agents, and appraisers, we certainly understand the ins and outs of negotiating a real estate contract.  As such, we’ve also come across that awful scenario (and headache) of a real estate appraisal coming in below the contract price.   So the Appraisal Came in Too Low- What Now?   Typically, this puts the ball in the buyer’s court.  As an agent, it’s part of the job to make sure your client doesn’t end up paying too much for their house.  Of course the option of taking the lower financing and coughing up a larger down-payment is always there.  Sadly, we often see agents who just decide to roll with it and recommend this course of action to their clients. As a buyer agent, don’t be afraid to go to bat for your clients.  An offer should be based on what the home is worth, and not the listing price.  Cost and value are very different things. When an appraisal comes in lower than the asking price,  renegotiating the sales contract should be the buyer agent’s first course of action (provided the seller is willing to listen, of course). Sometimes, a seller might try to discredit or cast doubt on the appraisal by looking for some mistakes.  Don’t be afraid of potentially ruining the deal; this is where you need to stand your ground as an agent, and look through the appraisal yourself. “Well that’s just the one appraiser’s opinion; we think our price is perfectly fair.”   It’s very important to remember that real estate appraisers have to follow a certain set of rules.  There...
Passing the FHA Appraisal- 3 Quick Tips

Passing the FHA Appraisal- 3 Quick Tips

Do you have an upcoming FHA Appraisal on your property? FHA Appraisals are quite thorough. If there’s anything even slightly wrong with your property, and a good FHA appraiser will find it. Here are 3 tips to ensure your property passes your FHA appraisal with flying colors.    1. The FHA does not permit damaged or chipping paint anywhere on the property– this is easily the most common problem we encounter that causes a property to fail an FHA inspection.  Often times, FHA repairs need to be completed in a short period of time.  There are all sorts of little tidbits of information you might need to know about painting, but most of these can be answered at your local hardware store. It’s also noteworthy that whether the interior paint is chipping or not, homes built before 1978 will still need to have the interior scraped and re-painted, as it’s very likely the walls were painted with lead-based paint, which is a no-no in the FHA handbook. The most important piece of information we’ll pass along is this- you can’t rush painting.  Different surfaces need different types of paint; different types of paint need different weather conditions and different amounts of time to dry. 2.  Make sure all of the utilities are working properly.  Now remember that real estate appraisers and home inspectors do different things– but when it comes to an FHA appraisal, they do have a shared responsibility to make sure the utilities are functional.  Make sure all of the lights and faucets turn on and off, and that hot and cold water flow properly.  These repairs cannot be...
Was Your Home Measured Wrong?

Was Your Home Measured Wrong?

Depending on the floor plan, measuring a home can be quite a headache.   It’s important to let your appraiser or real estate professional measure your property uninterrupted –we’ve mentioned this before.  What we haven’t mentioned is that getting the numbers right isn’t all it takes for a home to be considered mismeasured.  While there are others, generally there are two commonly used standards of measurement in the world of real estate: the ANSI (American National Standards Institute) or the AMS (American Measurement Standard).   In our review work, we find some interesting results when it comes to measurement standards.  On paper, the ANSI standard is the more commonly used of the two- but that’s just the problem.  It’s only on paper.  In reality, many real estate appraisers and professionals are measuring and drawing up floor plans under the impression they’re using the ANSI standard, when they’re really recording measurements using the AMS measurement standards.  There’s another word for this- wrong.    While the difference between the 1/10th of a foot and a 1/2 foot may not seem like much, the real problems that can arise from this will show up in court.   If your real estate appraisal (or any official document listing measurements on your home for that matter) displays the measurements for your home in the wrong measurement standard, it can ultimately discredit both the real estate appraiser (no so much your problem) and the appraisal itself (there’s your problem.) Ultimately, it’s not a bad idea to ask your surveyor, inspector, appraiser, or whomever is measuring your house what standard they’re using.  It could help you catch that error that’ll save...
The 3 Essential Tips for Real Estate Fix and Flips

The 3 Essential Tips for Real Estate Fix and Flips

How Do I Get Into Fixing & Flipping?   When most people hear the term “fix and flip”, the first thing they think of is a get-rich-quick scheme- maybe even one built to scam uninformed home buyers.  This is not true- or everyone would be doing it.  Fixin’ and flippin’ takes lots of work, not to mention the large risks that go along with it. A simple google search will turn up with thousands and thousands of fix and flip guides across the internet- some good, some bad.  We browsed quite a few of the top search results- they were mostly the same, despite a few details here and there. Instead of just adding another guide to the sea of search results, here are a few important tips every investor should know that we did NOT find when looking around the internet.     If you are considering the fix and flip industry, here are a few other articles worth checking out: – The Difference Between Remodeling, Renovating, and Restoring  –  Why Not to Overbuild Your Home  –  Home Repairs You Should Not Wait to Do   Jonathan Montgomery Founder and President of the The Real Estate Appraisal Group.He has been a real estate professional since 1998. He’s been a broker, and investor and now serves as an appraiser.  He currently works as an appraiser, doing real estate appraisals in Washington D.C., Southern Maryland, and Northern Virginia.      #treagroup...
Avoid This Mistake: Cost & Value are NOT the Same

Avoid This Mistake: Cost & Value are NOT the Same

The title says it all, folks.   Newcomers, or anyone inexperienced in real estate, seem to hold a common misconception.  There’s an old motivational saying along the lines of “you get what you give”  or “you get out of it what you put into it.”  It’s a good saying, it encourages people to work hard to achieve their desired results.  It’s mostly true- but not in real estate.     When improving your house, it’s important to maintain a simple rule: Make sure the improvements you get are things that ANY buyer would want- not just you. If you can afford to pay for incredibly expensive elephant-ivory bathroom tiles, then great for you.  Just keep in mind you’re probably one of very few people who would find that appealing- or be willing to pay for it.  This is the same as overbuilding your home– it doesn’t just have to be bigger to be considered overbuilt.  Ultimately, it’s important to research what sort of renovations, remodeling, or restorations will add the most value to your home before getting started.  Obviously, it will pay off in the long run.     Jonathan Montgomery Founder and President of the The Real Estate Appraisal Group.He has been a real estate professional since 1998. He’s been a broker, and investor and now serves as an appraiser.  He currently works as an appraiser, doing real estate appraisals in Washington D.C., Southern Maryland, and Northern Virginia.      #treagroup #realestate   ...