Andy Weiser Fort Lauderdale Realtor Blog

Everything You Want to Know About Home Appraisals

When you buy a home and there is going to be a mortgage taken out on it, your lender will require that there be an appraisal of the home to verify its value. This is to make sure that the lender is covered for their vested interest and that you aren’t overpaying for something that is not worth it.

What is the appraisal?

The home appraisal is done by a licensed appraiser to establish the current value of the property. The appraisal is done by a personal visit and inspection of the home combined by an analysis of the data of recent sales of similar homes in the area. 

Inspection v. appraisal

While both of these are crucial for the home buying process, they serve different purposes. An inspection is a thorough review of the home, its structure and systems. This is important for the purchaser, insurer, and mortgage company to all be aware of with regards to the physical condition of the home and what may be needed for repairs. The appraisal, while takes much of this into consideration, is primarily done to assess fair market value.

What do they cost?

Generally speaking, appraisals are typically done around the $300 to $400 range. Although the mortgage lender orders the appraisal to be done, it is customary for the buyer to be paying for it as part of the closing costs. 

What is the process?

Once your offer is accepted on your new home and you have signed the contract, that is when your lender will order the appraisal on the home as part of the next steps. Generally you do not attend the appraisal appointment like you would with a home inspection as it is not necessary, but it is possible if you ask.

What do they look for?

There are many things that are looked at when the appraiser conducts a report of value. Here is an idea of the things they will examine:

-Recent sales of similar properties nearby

-Neighborhood characteristics

-Lot and home size

-Age of the home

-Condition of the home

-Appliances

-Home improvements

-Amenities, such as carport, pool, etc

-Local housing trends

As you are the one purchasing the home, you are entitled to a copy of the report at least three days before the loan closes. Be sure to review it for accuracy. Should the value come back lower than you expected, you may be able to renegotiate the purchase price. 

 

Home Maintenance Checklist for First Time Buyers

When you go through the steps of the homebuying process you will typically have a team working alongside you. You will have your real estate agent, your mortgage agent and your attorney just to name a few. These professionals will help guide you through the process so you know exactly what to do. However, after you close on your home then what comes next? Here is a checklist of things to do when you move into your first home. 

Change the locks

You never know who or how many people had keys to the doors via the previous owner. Either change the locks or rekey them shortly after you move in.

Check smoke detectors

Get on a regular schedule of annually testing these and changing the batteries.

Thermostats

One of the best ways to save money is to program your home’s temperature. Program regular hours or invest in a smart thermostat that knows when you are home.

Inspect HVAC filter

Especially here in South Florida where AC is running for the better part of the year, filters can get dirty quickly. Make sure you are changing your filter per manufacturer’s recommendations for better air quality and efficiency. 

Plan HVAC maintenance

Check your HVAC system for any records left from the previous owner. See when it was last serviced to be sure it is in tip top shape. 

Locate circuit breaker panel

Fuses blow and of course at the worst times in the dark. Know where your panel is located so you don’t go fumbling in the dark to find it.

Locate water main shut off

Same thing here. Make sure you know how to shut off the water to the house should you find yourself with a faulty fixture or pipe issue. 

Clean fridge coils

The back of the fridge tends to get very dusty. Pull your fridge away from the wall and vacuum off those coils that tend to get very warm. 

Clean dryer vent

A dirty dryer vent that becomes clogged with lint can not only run less efficiently but can also be a fire hazard. Have yours cleaned or replaced if necessary. 

Inspect gutters

Gutters can get clogged with debris, become heavy and then damaged. Make sure yours have been recently cleaned and inspect them regularly for a clear flow.

Schedule termite inspections

Most homes will have a termite prevention service. Make sure you know if your home was inspected and treated. If not, schedule a reputable company to visit and invest in an annual contract for prevention. 

 

9 Reasons Why Buying a Home is Beneficial

Preparing to buy a home can take some discipline. Especially for those who may need to take a little longer to save up for a down payment, you may have to make some sacrifices like postpone a vacation, new car or the like. In the end, it is totally worth it on many levels. Here is a closer look at all of the benefits of owning your own home. 

Become established locally

Buying a home allows you to invest and grow in a community. Better yet, when you own a home you can become actively involved in the local community whether it be with your HOA, neighborhood association or even the town’s committees. These groups can allow you the opportunity to help shape the future of the area. 

Regulate monthly living  expenses

When you own a home you can say goodbye to any threat of rising rents or landlords looking to not renew your lease because they are looking to move back in or sell. Although as a homeowner your taxes and insurance may fluctuate, your mortgage can be a fixed amount for the duration of you having it.

Mortgages force you to save

Paying a mortgage is like investing in your future. Every time you pay your mortgage you are earning more equity in your home and essentially paying into a savings bank. Additionally, there have been surveys over the years that often point out that the net worth of a homeowner is far greater than that of the average renter. 

Better retirement potential

Purchasing a home and paying off your mortgage by your retirement years is only going to lessen your expenses while you are on a fixed income. Even if you cannot pay off your mortgage to remain in that home, you can always sell it and downsize with your equity as an option to get to mortgage free living. 

Homeowner tax breaks

There are numerous tax breaks that you can take advantage of when you are a homeowner. Mortgage interest deductions and home sale tax exclusions are just a couple to name. 

Personalize your home

Go ahead and paint every room whatever color you desire, reface your cabinets and install your favorite style of fixtures. Owning your own home can make for a more comfortable and accommodating home as you customize it to your liking and lifestyle needs. 

Privacy

No more 24-hour entry notices from your landlord. You can also increase physical privacy with plantings, fences or anything else that is within your desires. 

Make money

If you want to make some money on your home, consider doing things like renting a room with a roommate or even putting a room or suite on Airbnb for short term rent. Check with any HOA or local laws for your specific area first. 

Pride

Finally, it goes without saying but owning your house comes with a sense of pride. You have achieved the American dream and can rest assured that the home is yours. 

 

13 Potential Closing Disasters and How to Avoid Them

Closing on a new home can be just as exciting as it can be stressful. There are many steps to take along the way where things can go not as planned while the stakes are high. Here are some scenarios that can arise so you can try to avoid them in the first place. 

Buyer Side Potential Issues

Credit – While your credit may have been stellar when you got pre-approved, it might change later on when you put a home under contract. One of the biggest reasons this could happen is if you take on additional debts like buying a new car. Avoid larger purchases during this time to avoid any issues.

Job – It can happen, you could lose your job during the home buying process. If you can locate a new job quickly then you may even be able to get a cosigner to secure the deal. 

Closing Disclosure – With recent law changes you should receive this 3 days before closing. Make sure you review it and check for anything out of order. Alert your agent if there is immediately.

Loan Document Issues – You will get these docs 3 days before closing so again, make sure you review for anything that is even misspelled. It is not uncommon to see names misspelled which can be a closing delay so double or triple check everything!

Down Payment – Make sure you have this ready. That means make sure you have the funds ready to transfer (and not in a place where it takes several days), and know the exact amount needed.

Closing Costs – Different than your down payment, make sure you have your closing costs ready and even add a little padding to the amount just in case.

Insurance – As soon as you have a contract on a home, call and get some insurance quotes. That goes for both homeowner’s insurance as well as flood insurance. This will give you time to shop around if need be.

Seller Side Potential Issues

Title – There could be a delay if your title company finds any liens on the home. Your title will need to be free and clear of any issues or “clouds” so get a copy from your lender asap and review it thoroughly.

Walk through Issues – Homes should always be 100% empty of the seller’s belongings at the walk through and everything that was supposed to stay with the home should still be there. If either of these are not the case or if there are any damages then this could delay things unless an alternate arrangement is made.

Either Side Issues

Move Coordination – You would think this is obvious that a buyer should move in after closing and the seller should be out before. Sometimes wires get crossed and either one of these parties is misguided or a moving snafu takes place making for issues.

Death – You can deal with this potential problem with the contract stipulating that the obligations go to the heirs in the event of death.

Cold Feet – It can happen, someone for whatever reasons decides to not buy or sell the home. If a buyer does this, most contracts are written where they will forfeit their deposit. If a seller does this, they will need to return the buyer’s deposit. The buyer could potentially sue, but it is unlikely that they would. 

Natural Disasters – Should any disasters happen and the home is significantly damaged then most contracts will give buyers an out. If it is a small amount of damage, appraisers may want to review that this damage is fixed so that buyers may proceed with the purchase as normally would have occurred.  

 

7 Tips for Immediate Home Organization

It is still the beginning of the year, but spring cleaning season is just around the corner so here are some helpful tips to get your home organized in a snap. If you don’t have a ton of free time on your hands to give your home an overhaul, just tackling a few of these tips will help you feel far more organized.

Foyer

Don’t make the mistake of purchasing bins or storage baskets that are too small. This happens a lot and things tend to overflow and become messy all over again. Make sure to have enough, but most importantly large ones that can keep things neat.

Re-fold clothes

This is such an easy one that can make a huge difference. Instead of folding your shirts in a neat pile and placing them in a drawer, fold them “Marie Kondo” style. This essentially means you create a neat little rectangle that sits upright. The great thing about this is that you can fit more in the drawer and you can see all of your shirts at a glance without having to remove the stack to find the shirt you need.

Refrigerator

Bins and containers are also great ideas for things to have in the fridge. Not only do they make things look nicer, but they make foods easier to find when neatly stored. Invest in some quality containers that you can neatly stack to make life easier. Clear ones can also be helpful for easy identification. 

Travel gear

The best plan of attack here is to “nest” these items by placing smaller suitcases inside your larger ones. Store your smaller bags or backpacks inside the smallest suitcase. This keeps everything together while saving on space.

Maximize closet space

You would be amazed at how much more space you can get out of a closet when it is well organized. Especially with your narrower closets, add a shelving unit on the floor for boxes, a hanging rod for coats and a high shelf for labeled bins. You can always make use of the back of the door with a hanging organizer as well.

Tidy up open shelves

Open shelves are a popular trend and they do have their advantages. Frequently used items are easily accessed with open shelves but you have to keep them organized. Invest in some baskets or bins to keep things together and looking tidy.

Junk Drawers

Having junk drawers is sometimes necessary, but that doesn’t mean things cannot be nicely organized inside. Instead of having just one drawer, consider having a shelf with some transparent and clearly labeled bins. Being able to see what is inside the neat containers will make things neat and very easy to find.

Homes Are More Affordable Today

With prices of homes as they are these days, some may believe that owning a home in the present day is less affordable than in years past. Despite a pattern of rising prices, this isn’t completely true as it is not just the price that matters. 

So many homes are purchased with a mortgage and the rate defines much of the affordability equation. Rates today are even lower than they were in 2018. The other portion of the equation is the homeowner’s income and per recent studies that has been reported to have risen roughly by 3% over the last year. Furthermore, the National Association of Realtors has recently shared in their Housing Affordability Index that home affordability is better today than it has been in for the last 30 years. 

“A Home Affordability Index value of 100 means that a family with the median income has exactly enough income to qualify for a mortgage on a median-priced home. An index of 120 signifies that a family earning the median income has 20 percent more than the level of income needed pay the mortgage on a median-priced home, assuming a 20 percent down payment so that the monthly payment and interest will not exceed 25 percent of this level of income (qualifying income).”

The index had indicated affordability being at its greatest from the years of 2009 to 2015 during the economic downturn where there were significant sales of distressed homes in the way of short sales or foreclosures. Today, most of these properties are a thing of the past and affordability still is better than the years leading up to the crash. 

The same report also shows a mortgage payment on a median priced property as a percentage of the median national income. Historically this percentage lies at roughly 21%. Since June of 2018 this percentage has almost consistently fallen with it landing at around 15.3% towards the end of 2019.

In the end don’t assume that buying a home isn’t affordable in current times. It is important to take a look at the big picture and consider all aspects to see just how reasonable it is today.