T H E B L O G
What is the Purpose of an Appraisal?
What is the Purpose of an Appraisal? A home serves as collateral for the mortgage loan, so the lender needs to make sure that the home is worth the price being paid. An appraisal provides a means for the lender to determine the value and condition of the property, and analyze the fair market value based on comparable properties in the area. In some cases, the condition of the property is even more important, such as in the case of low equity loans like an FHA or VA loan. The lender wants to make sure the property is not only worth the loan amount but also that it is in good overall condition. This ensures that in the event of excessive repair costs or personal financial situations that arise unexpectedly, the homeowner will be able to pay the mortgage. An appraiser must be licensed and certified in the state in which he or she is practicing, and have completed thousands of hours of instruction and supervised appraisals in order to qualify for a license. The appraiser will look at the market where the property is located and will conduct a search for comparable properties that have sold in the previous six to twelve months. The appraiser evaluates both the inside and outside of the property to determine the home's current condition and prospective market value. The appraiser will not only be looking for positive aspects of the property, but also for needed repairs that might detract from the property's value. Before an appraisal, it's a good idea to deep clean the home and completes any needed repairs in order to present the property at its best. It also helps the appraiser to see every part of the home, as the appraiser is required to take photos of every room, the electrical system, the heating system, etc. So the appraiser needs easy access to the entire inside and outside of the property. If you are unhappy with the appraisal results, you can appeal the appraiser's evaluation. However, it is best to have a solid basis for the challenge, not just a feeling that your home is worth a different amount. You'll need additional, accurate information to provide to the bank or appraiser, such as: - The appraiser used outdated or inappropriate comparable properties to determine the market value - Upgrades that were not taken into consideration could potentially improve the appraisal report and home valuation - Incorrect square footage and other basic information on the appraisal report, such as wrong room count Whether you are buying, selling, or refinancing, it's important to understand the appraisal process and how it may impact your transaction - and your bank account!
Read MoreAssessed Value, Appraised Value, Market Value - What's the Scoop?
Just what is the difference between appraised value, assessed value, and market value? Does it matter if a home is "listed below appraised value"? Are the terms interchangeable? No. Each is very different so it's important to understand the differences between them. Assessed Value Each city and town performs its own assessments in order to determine what homeowners will pay in property taxes. Municipalities send out tax assessors to go around the city or town and assign values to existing homes. They use a number of different variables, such as sales comparison data and cost methods to determine what a given property is worth. In most cases, the assessors don't go inside the house to see how many rooms there are, what installations are in place or observe other physical aspects of the home that add or detract from its value. They rely on public data from when the house was built or when building permits were pulled or when it last sold. Because of this, assessments may not adequately and correctly reflect a property's true value. There is also no specific rule or law that says how often assessments must occur. That is determined by the local tax assessor's office. Appraised Value An appraisal is a much more thorough evaluation. Lenders typically require a professional appraisal to be done on a property during a purchase or a refinance transaction. This helps determine fair market value and to assure that the amount of loan to value is adequate. While an assessor only takes into consideration external factors like those mentioned above, a professional appraiser considers many unique aspects of a residence such as architectural style, insulation type and amount, foundation type, location, age of home, upgrades and updates, and more. Market Value This is the value the current market will bear - based on the price a buyer is willing to pay and a seller is willing to accept. Market value is greatly impacted by economic conditions, the amount of housing inventory available, updates and upgrades buyers expect or that are consistent in a specific area, and other factors that may be of either local, regional or national concern.
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Do you think Boston made the list of the Top 50 Greenest Cities in the US? Yes, it did! Check out the list to see the criteria used in this study, and find out where Boston (and some other favorite cities) landed. Thinking of moving? Don't forget that with the RE/MAX nation-wide and world-wide connections, we can help you with local or long distance housing goals! Click here to see more about the 50 Greenest Cities in the US
Read More Frank Lloyd Wright House for Sale in Virginia Beach
There's just something about a FLW house that draws everyone's attention, even decades after his death. Built in 1959, the home features both custom-designed built-in furnishings and some updates that blend perfectly with the original aesthetic. Oh, and the views! The house has sweeping views of Crystal Lake and a private dock. Want to make it yours? Let us know, our RE/MAX connections are nationwide. See the photos of this gorgeous and special property.
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Memorial Day honors service members who have died in military service to the nation. The holiday has roots dating back to the post-Civil War era, when citizens would informally place spring flower memorials on the graves of fallen soldiers. On May 5, 1866, the town of Waterloo, NY, formalized this ritual and hosted a city-wide "Decoration Day," encouraging its citizens to create memorials on soldiers' graves with flags and flowers. In 1868 Gen. John A. Logan declared that the first ever national Decoration Day should take place on May 30th to honor the fallen soldiers of the Civil War. Over the next few decades the day transitioned from being called Decoration Day to its present Memorial Day. In 1968 Congress passed the Uniform Monday Holiday Act, which established Memorial Day as the last Monday in May.
Read More Do I Need a Mortgage Preapproval?
Yes! Unless you a paying cash for a property, you will need to speak with a mortgage lender or two or three, and get a preapproval before you head out to search for a new home. The lender will ask you to provide documents such as recent paystubs, job history, debts and bank account information, and tax returns, and will use that info along with a credit report to determine not only that you're credit worthy of a mortgage, but also how much of a mortgage you qualify for. Keep in mind that as interest rates change - and your debts are paid down or increase - that mortgage approval amount may vary. The preapproval is super helpful in allowing you to determine your budget. Just because you're preapproved for a specific amount doesn't mean you have to spend that much, though! You may want to keep some money in reserve to buy furniture or make repairs or updates after you move into your new home. Or you may just want to keep a "cushion" in case something unexpected pops up. It's up to you, of course, to determine just how much of that preapproval amount you want to use and how comfortable you will be with the monthly mortgage payment. The preapproval is also very important when it comes time to make an offer. A seller wants to know that you are really able to purchase their home. A preapproval tells them that you have been vetted and are eligible for a loan. It would be extremely rare to find a seller who is willing to take an offer from someone who doesn't have a mortgage preapproval. Having a preapproval is just one more piece of the buying puzzle that will give you a leg up on other buyers in this competitive market! We are happy to share the contact information for lenders with whom we have successfully worked. A great relationship between Realtor, lender and client helps to make the buying process smoother and less stressful.
Read MoreWhat You Need to Save in Order to Buy a Home
Down Payment Just what is a down payment? Many people believe that you need to set aside 20% of a home's purchase price for that down payment - but that's not always the case. There are many different mortgage programs out there, some with as little as 0% down! Very common, especially for first time homebuyers, is the FHA mortgage, which is usually availalbe with as little as 3.5% down. Many cities and towns also offer grant programs for first time buyers, too. Different types of mortgages have varying terms and interest rates, which of course can change over time, including just during the time you're out looking for a home. So be sure to work with a trusted, experienced loan officer and company to be sure all your options are fully explaind to you. Earnest Money Deposit Another item you need to keep in mind when budgeting to buy a home is the earnest money deposit. This deposit is a show of good faith when you make an offer on a house. In Massachusetts, you make an initial deposit when making an offer on a proerty. After you sign the actual Purchase & Sale document you will make a second deposit. These deposits work like a credit, for instance if you put a total of $10,000 down with your two deposits, you will deduct that $10,000 from the money you will need to bring to the closing. Your agent will be able to describe the escrow process more fully, explain the amounts of the two deposits and when they are to be made. Closing Costs Closing costs vary widely from lender to lender and home to home. They are the upfront fees charged in connection with a mortgage loan transaction, such as loan origination fee, title exam and title insurance, survey and attorney's fee. There are also items that must be prepaid at the closing, such as escrow deposits for taxes and insurance. Closing costs account for between 2% and 5% of a home's purchase price so you will need to budget for these added costs ahead of time to avoid sticker shock just days before closing. Your lender will be able to give you a rouch estimate of costs when you apply for your mortgage, and within 3 days of your closing you will recieve a closing document or "CD" that will give you all the specific figures and the final amount of money you will need to have at the closing. Take Away Be sure to speak with your agent when starting your home search. Your agent can recommend a few great lenders and will also be able to take you through the homebuying process step by step, to be sure you're prepared not only for the excitement of house hunting, but also for the reality of paying for your new house!
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Guide to HOAs Whether you're a new homeowner or just a homeowner new to an HOA, it can be confusing to understand exactly what your responsibilities are and how these new rules will be enforced. A homeowners’ association, commonly referred to as an HOA, is an organization in a neighborhood, community or complex that determines and upholds a set of rules or standards for its properties and residents. HOAs are becoming increasingly popular, particularly as 55+ and 62+ developments are being built nationwide for the baby boomer generation. HOAs exist to help maintain quality of life in these communities and protect property values for all homeowners. These associations typically charge homeowners a fee or regular dues to help with maintaining things like common areas and pools, landscaping, trash removal and other amenities. What kind of rules does an HOA enforce? HOAs help all homeowners remain equally responsible for shared common spaces such as landscaping, elevators, swimming pools, clubhouses, parking garages, fitness centers, sidewalks, security gates, etc. HOAs define a set of rules known as covenants, conditions and restrictions (or “rules & regs”) that all residents must follow. These vary from association to association, but guidelines generally deal with architectural features like fences, pools, porches or other exterior home features. Other common restrictions cover things such as hanging laundry outside, attaching satellite dishes and specifying exterior paint colors, and may restrict certain activities that can occur at your home or neighborhood. HOAs hold homeowners to high standards to keep communities and neighborhoods proud of their appearance. Who makes up the HOA? An HOA is typically made up of elected community residents who sit on a board. When you purchase a home in a community that's governed by an HOA, you automatically become a member of the homeowners’ association. Residents elect members to make up the Board of Directors. The board members tend to have regular meetings open to homeowners to discuss major issues and concerns facing the community. HOAs are governed by bylaws that dictate how the HOA will be run and spells out the process for voting, meetings, board member roles and other operating guidelines. How are HOA rules enforced? HOA rules are generally legally enforceable, and penalties are given when violations occur. Consequences can be severe depending on the nature and length of your violation, and can include fines, legal action, or—in the worst cases—eviction. If you openly commit a crime or break a law, the HOA can report it directly to authorities. If you're unable to or refuse to pay your HOA fees, there can be penalties similar to missing mortgage payments. What are HOA fees? A homeowners’ association fee (HOA fee) is an amount of money that must be paid monthly by owners, and HOAs collect these fees to assist with maintaining and improving properties in the association. HOA fees are almost always levied on condominium owners, but they may also apply in some neighborhoods of single-family homes. Fees typically cover the costs of maintaining the building's common areas, such as lobbies, patios, landscaping, swimming pools, and elevators. The association may also levy special assessments from time to time if its reserve funds are not sufficient to cover a major repair, such as a new elevator or new roof. HOA fees can also apply to single-family houses in certain neighborhoods, particularly if there are common amenities such as tennis courts, a community clubhouse, pool or neighborhood parks to maintain. What are the benefits of living in an HOA neighborhood? HOAs help take care of some of the every day chores and responsibilities you would be responsible for in a non-HOA community. Chances are you won’t need to remove snow, care for your lawn or clean the pool, among other things. You can consider the monthly HOA fee as buying yourself some free time to enjoy life!
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A common question from home inspectors (in this area at least) is "do you want to do a radon test?" So what is radon, anyway? Radon is a colorless, odorless, naturally occurring gas. It is formed by radioactive decay of radium atoms, a byproduct of radium and uranium. Both of these elements are found in granite, and since Massachusetts and New Hampshire (The Granite State) have a lot of granite in the ground, we stand a good chance of having radon. In most instances as the radon gas permeates the ground, it is diluted by the air around it and is not usually a problem. But it can find its way into a house through openings and cracks in the foundation and become trapped inside. Without proper ventilation in cases like this, it can definitely become a health concern. How do you test for radon? Radon testing is usually done over a 48 hour period with either carbon or charcoal caniters, or a continuous electronic monitor. Results are displayed in Picocuries (pCi) per liter. The EPA has set 4.0 pCi/L as the upper limit in a home and recommends a remediation system if the level is above that number. Can you mitigate radon? A remediation system is pretty simple. It uses a fan to draw the radon gas through a pipe installed under the basement slab and exhaust it to the exterior of the home. Any cracks are sealed and any sump pump holes are covered and sealed. The exhaust pipe exits through the rim joist or rool, with a waterproof fan installed in the attic or the exterior of the home. A visual reader shows the level of radon as monitored by the system, so you can see the level, as radon readings constantly change. Most companies provide a warranty for a number of years, too, to help you feel secure that the system is working. For more information, go to the EPA website, or contact a home inspector or radon remediation company.
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