Home sales numbers in St. Charles continue to increase, but there are a few glitches that occur. There are large numbers of homes at below-market prices & the Interest rates are hovering around 3.5% !!  The home sale numbers have been increasing every month since June 2011.

One of the glitches that has been occurring stems from Low Valuation in Appraisals – here’s an excerpt of an article on this subject (click here for the full article).

The real estate market is recovering but still faces hurdles, notably from tight mortgage credit, but problems with a sizeable share of real estate appraisals also are holding back home sales, according to survey findings by the National Association of REALTORS®.

Most appraisers are competent and provide good valuations that are compliant with the Uniform Standards of Professional Appraisal Practice. However, appraisals generally lag market conditions and some changes to the appraisal process have been causing problems in recent years, including the use of out-of-area valuators without local expertise or full access to local data, inappropriate comparisons, and excessive lender demands. In addition, before the beginning of last year, some lenders’ loan processors edited valuations, cutting them by a certain percentage.

Although 65 percent of REALTORS® surveyed in September report no contract problems relating to home appraisals over the past three months, 11 percent say a contract was cancelled because an appraised value came in below the price negotiated between the buyer and seller, 9 percent report a contract was delayed, and 15 percent said a contract was renegotiated to a lower sales price as a result of a low valuation. These findings are notable given that homes in many areas are selling for less than replacement construction costs.

Lawrence Yun, NAR chief economist, says there has been a steady level of appraisal issues for quite some time. “Though the real estate recovery is taking place, the combined issues of stringent mortgage lending requirements and appraisal frictions are hampering otherwise qualified buyers from purchasing a home in a timely fashion, and in some cases are preventing them from buying at all,” he says.

If you are a first time home buyer thinking about buying a home in St. Charles or St. Louis Counties, working with a Real Estate expert than knows the St. Charles and St. Louis County market can really help you.  Sandra Meranda specializes in the St. Charles and St. Louis county home markets.  Contact me for help with finding or selling your home.

How To Prepare for a Home Appraisal

You’ve just signed all of the paperwork for your refinance, handed the loan officer the check for the appraisal, and now you’re wondering what is going to happen next. Good news-the appraisal inspection is painless, and usually takes anywhere from 30-60 minutes to complete. However, there are a few things that you should do to help the process move along as smooth as possible.

Preparing for the appraisal inspection:

• Create a detailed list of the recent improvements, which should include the following: when completed, cost of the improvement, before and after pictures if available.
• Make sure each room is accessible; the appraiser is required to inspect each room.
• If there is a crawl space, this area will also have to be made accessible for inspection for an FHA appraisal.
• Give the appraiser room to do their job. Errors are more likely to occur when the appraiser isn’t able to concentrate on their inspection.
• Keep all pets restrained. I’ve been bitten twice by a dog, and once by a cat; the owners had assured me that their pets were friendly-not so much!
• If you live within a development that has a homeowners association, have the name and phone number of the contact person available, along with a fee statement.
• If the appraisal is for an FHA loan, then the area leading to the attic will have to be cleared and made accessible-the appraiser is required to make at least a head and shoulders inspection of the attic area.
• Walk through each room and straighten up as if you were getting ready for company to visit. Appraisers are objective and can look past many things, however, the underwriter reviewing the appraisal photos may feel differently.
• Complete any unfinished projects-most appraisals are done “as is”, and any projects that haven’t been completed, will have to be adjusted for within the appraisal report.
• A copy of any agreements regarding easements (shared driveways and/or garages, etc.) should be made available.

Concerns about value:

For years I’ve been a big proponent of developing a relationship with a Realtor. I’m not talking about a real estate agent who happens to be a relative that lives half way across the state. I’m talking about one that does a lot of work within your neighborhood.

By building a relationship with a professional Realtor (this is all they do and they do it well), they’ll be able to give you great insight as to what’s happening within your neighborhood, and they would be glad to let you know what similar homes are selling for.

Once the appraisal is complete:

You have a right to a copy of your appraisal, so ask for it. If you should find any errors or have any concerns, talk with your loan originator. This is hard for borrowers to understand, being that they paid for the appraisal, but the mortgage company is the appraiser’s client, and they can’t discuss the appraisal with anyone else unless given permission.

Trying to understand an appraisal can be like trying to read the “Dead Sea Scrolls,” so ask questions and get clarification when needed-you paid for it!

Written By Michael S. Bolton, Home Appraiser

This is the time of year for buying and selling real estate. There are large numbers of homes at below-market prices & the Interest rates are hovering below 4%!! The home sale numbers have been increasing every month this year since June. It is never too early to start getting your home for this Spring also. Contact Sandra Meranda for details today!