Are you refinancing your home? If you are, the lender will require an appraisal. Also, did you know an appraised value difference of even a couple thousand dollars can make or break your loan approval? So what steps can you take to ensure your home is appraised for maximum value without getting denied for a loan? Here are a few tips to help know what to expect from a home appraisal and make sure your home comes out on top.

What is an Appraisal?

Opendoor.com defines a home appraisal as “the process by which a licensed appraiser conducts a thorough inspection of a property to assess its true worth (which isn’t always the same as the listing price). The appraiser will then compile all of their findings into a report and generate the home’s appraised value.”

Make Sure Your Home is Appraised for Maximum Value

Most appraisers perform inspections by:

• Comparing sales of houses in your neighborhood
• Determining a sales price per square foot
• Applying that sales price per square foot to the square footage of your home

The appraisal should equal or exceed the amount you request for your loan in order for the lender to approve it. When home values in your area fall, refinancing becomes more difficult, especially when you have only a small amount of equity in your home.

And since an experienced appraiser has inspected thousands of homes, it’s quite easy for them to assess your home’s amenities quickly. An interior inspection can take about 30 minutes or less. And that’s not a lot of time in a home nor is it much time to make a good first impression.

The appraiser typically drives giving the outside of the house a cursory inspection. They don’t ask to see the inside unless something looks questionable. So it’s a good idea to request a walk-through appraisal from the lender. A walk-through inspection gives you the opportunity to point out the upgrades or improvements made to your home that comparable homes in your neighborhood don’t have.

When an appraiser determines the worth of your home, they take a lot into account. Some of the factors they must take into account can’t be helped, like your home’s location, for example. But there are things you as a homeowner can do to make certain your home is appraised for maximum value. So it’s recommended that you prepare in advance of the appraiser’s visit.

1. Prepare a Packet

Prepare a packet of information to hand the appraiser as they hurry out your door after they inspect your home. Include the basics about your home and anything that helps back up your refinance offer.

Some upgrades that can improve a home’s value include upgraded countertops and flooring, extensive trim carpentry or built-ins, and energy-efficienct upgrades to appliances, windows and insulation.

Fact sheet about your home:

• Address
• Year your home was built
• Square footage
• Number of bedrooms and bathrooms
• Size of the lot

List of recent sales:

The appraiser has access to recent home sales. But there’s always a chance they may miss something. Make a list of:

• Any for-sale-by-owner homes
• Homes sold to a relative
• Owners who sold quickly to move out of town

List of improvements and upgrades you’ve made to your home:

• List improvements and their dates
• Include contact information each contractor who worked on each improvement
  

2. Fix What’s Broken

The appraiser assigns an “effective age” based on your home’s condition and how well you’ve maintained it. For example, fix the following (and then some):

• Cracked windows
• Thread-bare carpet
• Missing tiles in the shower
• Torn vinyl flooring
• Damaged doors
• Cracked or mildewed caulk
• Hairline cracks in drywall
• Peeling or flaky paint, inside and outside your home
• Evidence of water damage that has been repaired

You want the effective age assigned to your home to be low. A higher effective age results in lower value. So, make repairs to anything that ages your home in the eyes of the appraiser!

3. Clean Whatever Needs Cleaning

Most appraisers say a clean or dirty home bears nothing on its value. But if a clean home adds to the appearance of a well-maintained home, affects the appraiser’s overall opinion of your home, and makes a better impression, what harm can a good cleaning do? Play it safe and clean up the following really well:

• Overgrown landscaping
• Carpet stains
• Marks on walls
• Clutter, inside and outside
• Loose and rotten boards on your fence

Will Your Home Be Appraised for Maximum Value?

Getting your home appraised for maximum value without getting denied for a loan to refinance is possible with some preparatory work. Some things impact your home’s value more than others do. But remember, the inspection process varies by appraiser. And everything you can do to ensure your home is appraised for maximum value and streamline the appraisal process is worth the effort when refinancing your home.

Contact me, Charles D’Alessandro, your Brooklyn Real Estate Agent with Fillmore Real Estate. As a Brooklyn real estate agent and broker with over 30 years of experience, I can help you prepare your home to sell even during these challenging times.

Our office is completely shut down and committed to your safety during the COVID-19 health crisis in compliance with the State of New York public health policies. I can be reached by phone at (718) 253-9600 ext. 1901 or by email at [email protected].

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Charles D’Alessandro
Your Brooklyn Real Estate Agent
718-253-9600 ext. 1901

Consumer Tip – Real Estate Red Flags (1)

The majority of Brooklyn licensed real estate agents and brokers are well-trained professionals who can help make the process of buying or selling your home a successful venture rather than a stressful adventure. Occasionally, however, you may run into an unlicensed person posing as an agent, or a licensed agent who is not following the rules of the profession. In either case, your real estate experience can quickly turn sour. Here are a few Consumer Red Flags When Hiring Your Brooklyn Real Estate Agent I hope you find them helpful for your next real estate transaction.

Following are some “red flags” that may assist you in determining if you are NOT working with a legitimate or honest real estate agent. These tips are not intended to provide legal advice in drafting real estate related documents or provide detailed descriptions of the nature of relationships that may be created between agents and buyers and sellers.

Consumer Tip – Real Estate Red Flags (2)

Some “red flags” that may assist you in determining if you are NOT working with a legitimate or honest real estate agent. These tips are not intended to provide legal advice in drafting real estate related documents or provide detailed descriptions of the nature of relationships that may be created between agents and buyers and sellers.

• RED FLAG – Agents using high-pressure tactics, especially in an attempt to have you sign a purchase or listing agreement
  Tips-

  • Do not be pressured into entering into a purchase agreement based solely on the agent telling you there are multiple offers so you need to make your purchase agreement offer immediately. Multiple offers may exist but don’t be pressured into making a decision you are not comfortable with or if you do not understand the terms of the purchase agreement. If the sellers accept your purchase offer it becomes a legally binding contract. You may have to forfeit your earnest money deposit if you get “cold feet” and later decide that you just don’t want or like the property.
  • Do not be pressured into signing a listing agreement unless you are comfortable with the agent and understand and agree with the terms of the listing agreement including any marketing strategy.
• RED FLAG – Agents asking for earnest money or a down payment check made out to the agent…or asking for cash
  Tips-

  • Earnest money should be paid with a check or money order and made payable to the real estate company and not to the individual agent.
  • By law, earnest money must be placed in the listing company “trust account” and cannot be mixed with personal funds of the agent. Once the listing company receives the earnest money, it must be deposited within three business days. However, the buyer and seller may agree, in writing, to handle the funds differently.
• RED FLAG – Agents who do not provide answers to your questions about the property or fail to return your calls or maintain communication with you
  Tips-

  • By law agents are required to disclose all material facts they are aware of that may adversely and significantly affect your use or enjoyment of the property, such as existing structural or mechanical problems, water infiltration problems, easements or encroachments, or faulty septic systems.
  • Do not enter into a purchase agreement until your questions are answered. You also have the option of including “conditions” or “contingencies” in your purchase agreement. If your conditions or contingencies were not met, you would not be obligated to go through with the purchase. Some common contingencies are a buyer requiring a satisfactory home inspection report by a certain date and at the buyer’s expense. If the home inspection is unsatisfactory, the buyer can cancel the purchase agreement and obtain a refund of the earnest money.
• –RED FLAG Agents who don’t disclose who they represent
  Tips–

  • Whether you are buying or selling, it is important to understand the different types of relationships that can be created between you and an agent. Expect agents to act in the best interests of whomever they represent.
  • Agents must provide a consumer with an “agency disclosure” form at the first substantive contact with the consumer. The agency disclosure is intended to provide a description of available options for agency and nonagency relationships and a description of the role of a licensee under each option. The agency disclosure form is not a contract. If a buyer or seller wants an agent to represent them, a written contract must be entered into such as a listing agreement or a buyer representation contract. Following are the different types of agency relationships in real estate transactions:

  Seller’s Broker: A broker who lists a property of a salesperson who is licensed to the listing broker who represents the seller and acts on behalf of the seller.
  Subagent: A broker or salesperson who is working with a buyer but represents the seller. In this case the buyer is only the agent’s customer and is not represented by that agent.
  Buyer’s Broker: A buyer may enter into an agreement for the broker or salesperson to represent and act on behalf of the buyer. In this case, the agent represents the buyer only and not the seller.
  Dual Agency: Dual agency occurs when one broker or salesperson represents both buyer and seller, or when two salespersons licensed to the same broker each represent a party to the transaction. Dual agency requires the informed consent of all parties.
  Facilitator: A broker or salesperson who performs services for a buyer, a seller, or both but does not represent either in a fiduciary capacity – meaning the facilitator is not obligated to represent the best interest of either party.

• RED FLAG – Agents who will only show you properties they have listed
  Tips-

  • A Brooklyn real estate agent who you have entered into an agreement with should be acting in your best interest, not his or her own best interests. Agents should be willing to show you properties that they have listed as well as other company listed property and property that is For Sale By Owner (FSBO’s).
• RED FLAG – Agents who ask you to sign blank or incomplete documents
  Tips-

  • Do not sign any real estate related documents that are blank or incomplete. Most of these documents are legally binding.
  • Be wary if you are told, “Don’t worry about that section, we’ll fill it in later.”
• RED FLAG – Agents who require a listing agreement for extended periods of time
  Tips-

  • Do not be pressured into signing a listing agreement for lengthy periods of time. A typical listing period is six months but you can negotiate a shorter or longer listing period.
• RED FLAG – Agents who are difficult to contact or do not regularly communicate with the consumer
  Tips-

  • An agent who has your best interests in mind should be easy to reach.
• RED FLAG – Agents who do not provide a basis for a listing price
  Tips-

  • The agent should provide a market analysis with documentation to support the listing price.
• RED FLAG – Agents who attempt to talk you out of a home inspection or hiring a real estate attorney
  Tips-

  • Agents are prohibited from discouraging the use of an attorney. Hiring an attorney, while not required, may be desired and it’s your right to do so.
  • If an inspection is discouraged, it might be because there is a defect in the property.
• Make sure your agent is licensed
  Tips-

  • Visit New York Department of State Department of Licensing to verify that your agent has a current real estate license and to find out if there are any enforcement actions against him/he
• Tip-

  If you’re thinking about selling your Brooklyn real estate and would like more tips on how to get it ready, please call Charles D’Alessandro Your Brooklyn real estate agent with Fillmore Real Estate a call at 718/253-9600 ext 206 or email me at [email protected], for more information and a Free Market Price Evaluation without obligation!

Are you a first-time home buyer?  There are a lot of things you’ll want to learn before making that first purchase.  Here are 9 tips to help you get a Brooklyn New York home you’ll love and be prepared for additional costs you may not have considered:

1. Ask yourself if you’re ready. Are you financially ready to buy a Brooklyn New York home?  Do you have a steady job and income?  Do you have money for the down payment?

2.      Get pre-approved. When you get pre-approved for a mortgage loan, your lender checks your credit and lets you know the amount of mortgage for which you qualify.  Having a pre-approved loan will put you at the top of the list when presenting an offer.

3.      Identify closing costs. The cost of closing on the sale of your Brooklyn New York home shouldn’t be overlooked. Closing costs include origination fees, title and settlement fees, taxes and prepaid items such as homeowner’s insurance or homeowner’s association fees.

4.      Calculate your total monthly housing cost. Include taxes and homeowners insurance.  In some areas, what you’ll pay for your taxes and insurance escrow almost doubles your mortgage payment.

5.      Include home maintenance expenses in your budget. Maintaining your investment can be labor-intensive and expensive. Unexpected costs for new appliances, roof repairs and plumbing problems can drain your bank account.

6.      Find a Brooklyn home. Identify the neighborhood, you want to live in.  Hire a full-time REALTOR® who specializes in that neighborhood to help you find and negotiate the purchase of the home.

7.      Get a home inspection. Make sure your agent includes a home inspection contingency in your offer to buy a home. If you’re unsatisfied with anything found in the home inspection, have your agent negotiate with the seller to make repairs, pay for repairs or lower the price.

8.      Make it to closing. You have your financing, your offer has been accepted, and you’re anxiously awaiting the day you close on your home.  Now, you just have to make sure you don’t do anything to jeopardize your credit.  Do not change jobs, buy a new car or apply for credit cards.

9.      Celebrate. Congratulations!  You’re now the proud owner of your first home.

Buying your first home can be exciting, especially if you’re knowledgeable about the process and prepared. Follow me for more Questions &  Answers About Buying a New Brooklyn Home .

If your goal for this year is to be a first-time homeowner, let me guide you through the process of finding and buying a home. For a FREE copy if Michael Reinhardts book “Buying Real Estate does Not Have To Be Stressful, call Charles D’alessandro your Brooklyn Realtor® of Fillmore Real Estate today at (718) 253-9600 ext 206 or email me at [email protected] for more information.