Real Estate Help!

odusgolp
odusgolp Posts: 10,477 Member
in Chit-Chat
I'm in the state of Wisconsin. I'm currently renting a home that the owner would like to sell to me. I would like to buy it. The first step, IMO, would be to get an appraisal (the value is really quite unknown). Here's where I'm confused...

Does he hire an independent appraisal? Is that agreeable to the bank?

Do I first meet with a banker and they have a third party appraisal as part of my seeking financing?

I need some guidance in how the appraisal part should work so we have a place to start talking here...

Thanks, loves!

Replies

  • tomomatic
    tomomatic Posts: 1,794 Member
    A sale price is a very arbitrary thing. An appraisal is something that the banks use to make sure that they have an asset that's worth what you're borrowing (in case they have to foreclose...yadda yadda).

    Typically, an estimate is already incorporated into the loan process. Paying for 2 appraisals seems counter-intuitive. I don't think you can re-use an appraisal as this is something that the bank is paying for with your fees. They're only going to approve a lone for X-percent of the appraisal value.

    I say you work with an agent to agree on a price. In the sale agreement, have your agent insert a clause for the buyer and seller that if the appraisal comes back outside of a certain range, that you'll re-negotiate.
  • kerriberry74
    kerriberry74 Posts: 62 Member
    Sigh... My internet died as I tried to post before... Anyway, i'll recap. Definitely see about getting pre-approved for a loan. That would help you know just how much you have to work with. Depending on how your landlord proceeds with the sale- agent, FSBO. An agent can come up with a sale price, not sure how it works with FSBO. Usually the bank will take care of having the appraisal done once the process gets rolling.

    Things to take into consideration are 1. how much money you are able to put down. Try to avoid the PMI- private mortgage insurance- if possible. At least shoot for having it for the least amount of time as possible- you're paying to cover the bank's behind should you default. 2. Definitely have an inspection done. A passing inspection is something that can be put in as a condition of sale. IE. when I bought my place, we had that condition... There ended up being spindles on the loft that did not actually meet up with the railing. That ended up having to be fixed before the closing could happen.

    It's been a while since I dealt with mortgages, but I hope this helps you out some. Good luck!
  • frankiedb
    frankiedb Posts: 277 Member
    Hello,

    Assuming you're getting a mortgage this is what the steps are:

    Step one.
    Go to a lender such as a bank and get pre-qualifide for this home purchase. If you can get a mortgage then you will need a real estate attorney. Pretty much at this point you are out of it the bank will take care of the apprasial of the home but you will pay for it. At that time the attorney will check the title and deed to property to make sure that the home can be sold. The bank will also send an engineer to check condition of the home. You will pay for this as well. Once the apprasial comes in and the engineer report you will see if the home is worth it for you and if you still want to go forward. The attorney will advise you as well along with the bank.

    Step two:
    Once you reach this point and you have a value and purchase price the bank will do a debt to income ratio and depending what you're putting down as a deposite they will determine what your payments wil be. At this point if you're good with everything and want to go forward the attorney will then order the title and the bank will lock you in and a closing date is set for the purchase.

    If you are buying the home without financing then YOU hire the appraser and have hime give you the value and also hire an engineer to check the condition of the home. The value of the home is determine by compatible homes that sold in the area not by what someone assumes there home is worth!

    Good luck!!
  • Duck_Puddle
    Duck_Puddle Posts: 3,237 Member
    Assuming you aren't paying cash for the home, the first step is to go to a bank/mortgage broker. You need to find out what you are qualified to buy (if anything) before you do anything else. Assuming you are qualified to get a mortgage (or will be in the foreseeable future given you "fix" some things), go to a real estate agent. If you don't know one, a local mortgage officer will have a list of agents you can work with. Of course they are all tied into each others pockets, but their best interest is making sure you purchase a home-they don't make money unless you close on the house. So they will have a vested interest in helping you complete the transaction. And don't be surprised if the mortgage company gets their panties in a wad over the dumbest stuff on earth. Like my closing was delayed because the underwriter insisted on a certain sentence in the appraisal being in a certain section (as opposed to the section it was originally in). And be prepared to write letters repenting for any late payments you've had (like ever), and probably offer blood & DNA samples as well.

    Your agent will look at comparable sales and give you a ballpark figure to offer for the home. A home inspection and appraisal contingency should be written into the purchase offer (meaning that if the home inspection turns up problems or the house doesn't appraise high enough, you can re-negotiate or cancel the contract). But your mortgage officer and real estate agent will walk you through everything. I would also suggest looking at other houses on the market-even if you don't have any intention of purchasing them. It seems silly, but it will give you an idea of what else is out there and what you might be willin to pay more to have (or not).

    And stock up on Xanax. I just bought a house last fall. The MOST stressful thing I have ever endured. Good luck!
  • ltgarrow
    ltgarrow Posts: 342 Member
    Here's the absolute FIRST thing you should be doing. Contact another real estate agent. Ask them to be your buyers agent. The thing about real estate agents trying to sell the house is, they are doing just that. The agent works for the seller. A buyers agent on the other hand, works for you. They have the same training and ablities as the other agent, but they are on your side. They will work to make sure you are not getting screwed.
    And the best part is that they get their pay out of the sellers commission. Meaning that you don't actually pay for them. Without a buyers agent, the selling agent just gets a bigger cut of the price.


    My wife is an agent...and I hear things.

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