Appraisal day, the day both sides of a real estate transaction hold their breath, in anticipation of the outcome. So, what is an appraisal exactly? And why is it needed?
An appraisal is a non-biased valuation of a home, and it is REQUIRED if you are using a loan to buy your home. Lenders want to ensure that they are loaning you the appropriate amount of money, and to do that, they order an appraisal. Imagine if your friend gave you a "very valuable" coin in exchange for a $10,000 loan. Wouldn't you want to make sure that coin is really worth that big of a loan? That's the lender perspective.
An appraisal is done by a third party, someone with no connection to either side of the transaction, and it takes into account everything about the home- condition, location, closed sales of comparable properties nearby, and how long they took to sell. All of this information is compiled and analyzed, and the appraiser comes up with their opinion of the value of the home. Read through the infographic below to get a better understanding of the process. Next week we'll answer the question "What if my house doesn't appraise?" because I just KNOW that was your next question. Stay tuned!
So you've decided to start down the exciting path of home ownership, but you're torn! Single family residence or condo/townhome? Which do you choose? Each has it's own pros and cons, and only YOU can decide what's best for you. The best thing you can do is educate yourself on the differences, before you start looking, so that you don't fall in love with something that just won't work for you or your family. I'll briefly go over the pros and cons, as explained in the photo below.
Single family residence (SFR)
1. You have control over all decisions pertaining to your home. If you want to have a rainbow colored front door, go for it!
2. Generally, SFR's have more square footage.
3. If you have pets, they are more pet-friendly since they usually have a larger yard.
4. More privacy thanks to no shared walls.
5. Generally higher resale value.
1. Increased cost - all maintenance and repairs fall to you, the homeowner.
2. Lack of amenities you may find in a condo/townhome community (pool/gym/clubhouse).
3. Generally more expensive to purchase.
1. Less maintenance/upkeep since HOA handles all exterior landscaping and maintenance of building exteriors.
2. Possible availability of amenities (pool/gym/clubhouse).
3. Increased sense of security due to neighbors being close.
1. HOA fees, which can vary widely depending on location and amenities offered.
2. Inability to customize the exterior of your home due to HOA regulations.
3. Less privacy due to shared walls.
4. Not as pet friendly due to smaller, sometimes non-existent, backyard.
5. Generally lower resale value.
There are always exceptions to these generalizations. There are single family residences in some HOAs, allowing you to blend the pros of each type, and buy the perfect home that fits your needs. If I can be of any assistance to you in your home search, please don't hesitate to call, text, or email me today!