If you encounter any appraisal issues during your sale, there are three ways you can respond. We’ll cover each of them today.
Real estate contracts include an appraisal contingency that states the property must be appraised at or above the agreed-upon price or the buyer doesn't have to complete the purchase and their earnest money will be refunded
Buyers offering cash will sometimes forgo this contingency, but, in most other transactions, the appraisal process will play a major role.
The appraisal contingency states the property must be appraised at or above the agreed-upon price or the buyer doesn't have to buy.
If your home doesn’t appraise, you’ve got three main options:
1. The seller can lower the price to the appraised value.
2. The buyer can make up the difference in cash.
3. The buyer and seller meet in the middle, with the buyer offering part of the difference in cash, and the seller lowering the price.
If none of these three options works, buyers can generally terminate the deal without losing their earnest money deposit
Appraisal issues have become somewhat more common recently, so hopefully these tips will be helpful to you if you find yourself faced with this kind of problem during your own real estate experience.
If you have any other questions or would like more information, feel free to give us a call or send us a message. We look forward to hearing from you soon.
Many buyers want to purchase a property with acreage but don’t know what to look for. Here’s how you should approach this type of transaction.
Here are five important factors to consider when you’re thinking about purchasing a property with acreage:
1. Is it cleared or not? Clearing out a piece of land can run anywhere from $3,000 to $5,000 per acre.
2. Is there an existing survey? If the seller has one, it can save you a lot of money. It will cost around $1,000 or more to get it done yourself, but you should have it done before closing. You can also write the survey into your contract.
If a survey exists, it can save you a lot of money.
3. Are utilities readily available? What’s the utility situation like? Have they been tapped and run through to the property? Having to do so on your own could cost another few thousand dollars. Having to put a well or septic tank in will cost even more. If there’s an existing well or septic system, make sure you get them tested. If they are functioning properly, that’s a big benefit for you.
4. Is the property low-lying? You’re going to have to do some research with the floodplain manager and see if you’re in a flood zone or in wetlands. You’re going to want to walk the property, especially after rainfall. I recommend doing this in the winter.
5. What does the future of the property look like? Make sure there's no zoning changes and no major road construction planned on the land around where you’re considering.
If you have any questions for me about buying acreage or about anything else related to real estate, don’t hesitate to give me a call or send me an email. I look forward to hearing from you soon.