Interest rates may have been rising, but they are still invitingly low. As a consequence, some Leisure Village homeowners are looking to refinance their mortgages to lock in interest rates while they can. A key element in both refinancing and home sales is, of course, the formal appraisal.
Most homeowners regard the appraisal process as a spectator activity: the appraiser comes, checks out the house, goes back to the office and writes up an appraisal. But, as with most of life’s endeavors, taking a proactive stance is more likely to garner the best results. When it comes to the appraisal, there are several factors that you do control.
First — before you even call in the appraiser — prep the house. Now is the time to address any flaws that could materially affect the valuation. Next, be sure to select an appraisal company with local ties. Appraisers who live and work outside the area are typically more likely to render a conservative valuation. Having less familiarity with the neighborhoods breeds caution. An appraiser from Camarillo will be aware of the local amenities and attractions which make a property more desirable.
If you have made significant improvements to the property, point them out to the appraiser. Organize evidence proving what you spent for each. If you can provide ‘before’ and ‘after’ photos, provide copies the appraiser can take with him. This is particularly important for improvements such as heating or cooling systems: they can add considerable value to an appraisal, but are difficult to see.
Don’t leave it up to your appraiser to find comparables for your property – you (or me, if I am your agent) can provide the ones that tell the story you want it told. Comps are particularly important if you can find properties that have sold without an agent — the appraiser may not have access to these. It’s not unknown for an appraiser to accidentally miss one or two that are similar to your property and well priced. Why leave it to chance?
For this and any other real estate questions, I’m always pleased to offer experienced guidance. Call me anytime!
October’s Mortgage Credit Availability Index shows a slight relaxation in lending standards — but as most Leisure Village home buyers and sellers will agree, getting a mortgage is still difficult. With mortgage availability benchmarked at 100, although it’s currently at 111 ½, compared with the 800 it stood at in 2007, today’s is still a tough environment.
That’s why Leisure Village seller financing is being considered by more homeowners. When a home is owned outright, seller financing can draw a higher selling price (with future interest payments as a bonus). But before making such an offer, Leisure Village homeowners need to consider all of the ramifications: there is more involved than just the assumption of added risk.
Of course, ordering and examining a buyer’s credit report is the starting point. If the story it tells needs too many explanations, it’s time to walk away. Foreclosing on a seller-financed home can be more difficult than through a traditional foreclosure —particularly if the financing documents are substandard.
At first blush, seller financing might seem to simplify the whole transaction, but in fact some details usually handled by a bank must be hammered out:
• Who will pay for the appraisal; who for the inspection?
• Who is going to be responsible for property taxes and upkeep?
• Will the deed be transferred to the buyer right away, or only after the home is paid off?
Those issues point out why a “handshake deal” can’t be recommended for a Leisure Village seller financing arrangement. Just consider the last two points: if the deed hasn’t been transferred and taxes are in arrears, whose credit is harmed?
A good attorney will draft an agreement that nails down responsibilities and penalties for a buyer default as well as a detailed payment structure. A well-drafted seller financing agreement protects both parties by preventing misunderstandings and providing an unambiguous inducement for good behavior.
Given the right buyer, clear communicating and a framework cemented by the proper paperwork, Leisure Village seller financing can provide the missing element that makes a sale possible. If you will be listing your own Leisure Village home this fall, when you give me a call, we can discuss many of the different paths to success.
Renovations and upgrades will increase anybody’s Leisure Village home values, right?
Maybe…but not so fast! Believe it or not, some projects can actually diminish a Leisure Village property’s home values. In other words, you could potentially lose more than the cost of the project: you could lower your home’s ultimate resale value as well!
One of the most common examples is the overly ambitious landscaping project. Who doesn’t love a well-tailored garden or a perfectly maintained backyard? Yet, as HGTV’s Sabrina Soto, host of “The High/Low Project” points out, overdoing it can be counterproductive. To some potential buyers, too much landscaping could equal increased maintenance (meaning more work and expense). When the balance isn’t right, turned-off prospective buyers can bring lower offers. When it comes to landscaping, the idea is to keep up with the Joneses, not outdo them.
Another potential trouble spot comes when a remodeling effort goes into converting a spare bedroom. Especially because local property records can record a home’s structural description over the course of the years, a change in the number of bedrooms from four to three can mean home values headed in the wrong direction. It’s also the kind of change that can give rise to skeptical queries in prospective buyers’ minds — running the gamut from “why exactly did they convert the bedroom into another room?”” to “what else have they changed that we’d better know about?”
Any creative, off-the-beaten-path design upgrades can create more problems than solutions. You might think that a potential buyer would look at what they view as an unsuitable paint color and think, “Well, that’s just a few hours of work.” But few buyers want to spend their free time painting…especially when it’s on top of custom textures. Soto says that textured walls are difficult to sand and downright nasty to remove. Home values are usually better served by skipping the fancy textures and sticking to neutral colors.
Home values in Leisure Village have been on the rise, so before making any moves that could wind up being counter-productive, if you are preparing to sell this fall, why not call me for an up-to-date market assessment?
Another closed escrow today in Village 20. This was a rental property that we managed and the tenant found her perfect home in the Village. Since the prices are up, the landlord decided to let her out of her lease. We put the house on the market and it sold right away. A win, win for everyone.