So you have a home with an addition. Was it Permitted by the County?
How will the lack of a building permit affect the Appraisal and The Home's Value?
You will be happy to know that they are NOT required by HUD or for Conventional Loans....However.....there is a caveat.
When the Appraiser inspects the home, if the addition or finished basement or enclosed Garage, etc. has not been completed in a Workmanlike, Professional Manner this condition WILL be noted in the report. Then it is up to the Underwriter to determine if further inspections or investigations into the addition or finish work is required OR if they will decline the Loan all together.
So what does Workmanlike mean to an Appraiser? It means the addition must blend or flow well with the remainder of the home and it must not look "thrown together" or finished off in an inferior way, with inferior materials or with an inferior foundation, etc. As a Realtor, you KNOW what I am talking about. If you think the addition or finish work is marginal or sub-standard, so will the Appraiser.
One IMPORTANT thing to note, MOST Appraisers will NOT inquire about Permits for Finished Basements or Bonus Rooms over Garages. It is quite common for Homeowners to Finish these areas without getting a Building Permit, even though many Counties require one whenever Plumbing or Electrical work is involved. Some Counties require permits for Decks and Fences and again, most appraisers will not even ask if a Permit has been pulled for this type of addition. Some will not ask about permits for enclosed Garages, it depends upon how it was finished off and how it compares in quality and condition to the rest of the home.
The work should conform to building codes and standards in place at the time of the addition or finish work. Since Appraisers are not building inspectors and do not have the building codes handy they will typically include a disclaimer in the appraisal report stating there was an addition, it has been completed in a workmanlike, professional manner and it is assumed that the work conforms to all current building codes and standards at the time of the addition. Then we will supply plenty of photos for the Lender to Review.
If you have any questions about Building Permits and additions, contact me and we can help.
** CHECK OUT LINKS TO THE LEFT OF THIS ARTICLE FOR HALL & FORSYTH COUNTY BUILDING PERMIT REQUIREMENTS .
Even with everything the Internet has to offer by allowing You to "LOOK" at thousands of homes online...Do yourself a FAVOR and Hire A Realtor!
As the saying goes...."KEEP CALM & LET A REALTOR HANDLE IT" WHY? I'll give you 10 reasons why.....
1. You need someone to run interference when it comes time for the Appraiser to Appraise your home. Your Realtor can provide the Appraiser with the Comparable sales they used in order determined a proper listing price. This can be invaluable especially if the appraiser is not familiar with your neighborhood.
2. Your Listing Realtor is worth their Commission and weight in Gold during the most crucial time.....Contract to Closing. Many deals fall apart during this time and your Realtor is the one who has to run interference with the Loan Officer, Inspector, Appraiser, Buyer's Realtor, Closing Attorney, etc. There are so many things that they handle behind the scenes that you are not aware of in order to make sure that everyone gets to that CLOSING TABLE!
3. Your Buyer's Realtor is also worth their Salt as they make sure that you are not overpaying for a home, by telling you if the listing price seems high. They are the ones who have to negotiate an offer with the Listing Realtor, who then presents to the Seller. Realtors who have good negotiation skills can make or break a deal on your next dream home.
4. Your Realtor is a WEALTH of information on service providers. They can provide you with names of contractors from painters, roofers, inspectors, appraisers, landscapers, electricians, plumbers, HVAC Installers, Septic Repairman, Termite Inspectors, etc. Just think if you had to figure out which ones were the best and would not SCAM you! Your Realtor already knows which ones are the best for your needs as they have first hand experience with all of them.
5. Realtors make sure that as a Seller you are not doing anything that could land you in Jail, such as proper disclosure issues, complying with any State Regulations as a Seller, etc.
6. As a Buyer your access to Listed Homes is thru a Realtor. You cannot gain access any other way. Without Realtors you limit your buying experience to FOR Sale By Owners and they are not obligated to use Sales Contracts and Disclosure Forms that are there to protect you as a Buyer. This is critical!
7. Realtors act as buffers between buyers and sellers. Most people find it difficult to negotiate deals face to face when it comes to buying and selling a home. You may do yourself a disservice by not having a Realtor negotiate for you.
8. Your Realtor can be invaluable when you are working deals from out of State. They know the area in which you want to buy and You do not. They can help you find just what you are looking for without worry of the unknown such as Neighborhoods, Schools, Shopping, Places of Worship, etc.
9. Realtors keep your information Confidential. They are looking out for your best interests at all times and are focused on finding exactly what you are looking for in a home.
10. Realtor Networking, Advertising and Marketing far exceeds anything a For Sale By Owner can reach in the way of potential buyers.
Finally....Realtors are there for you AFTER the sale. Many times questions come up after you are in your new home and your Realtor is there to help you or hook you up with someone who can help you.
Required repairs are limited to those necessary to preserve the continued marketability of the property and to protect the health and safety of the occupants
This essentially covers FHA Appraisal requirements. Of course for ALL Loans not just FHA, ALL utilities must be on INTO The home prior to the Appraiser inspecting the property or it will be conditioned in the appraisal report.
REALTORS FEEL FREE TO PRINT THIS OFF AND PROVIDE TO YOUR SELLERS.
Dear Home Seller:
Thank you for your time in reading this important letter. I promise it will be worth it! As you know, those who are PREPARED are far better off and usually avoid unpleasant surprises that can cost them thousands of dollars.
As a Seller it is so important in this market to make sure that you are not under pricing or over-pricing your property. It can mean the difference between leaving thousands on the table, never selling your home or delaying significantly the time it takes to sell your home. You may say my Realtor can provide me with that information for FREE! Why do I need to pay for an Appraisal Report?
A Real Estate Appraiser can provide you with invaluable information about what ALL Appraisers look for in a Home and what drives and determines value. Appraisers specialize in Valuation of property. Realtors specialize in Marketing your home and negotiating the best possible price for you as a Seller.
Appraisers have NO vested interest in your Home, so their professional opinion of its value is independent and unbiased which is what you need and want!
So Why get an appraisal IF you feel that your Home is priced Right? Below are 4 perfect Reasons and they will EACH be well worth the cost of the report. It will be one of the best investments YOU can make to "Prepare your Home for Sale", much the same as spending money to paint your home, install new carpet & appliances (if needed) in order to ensure the highest possible sales price.
1. You get a current opinion of value for your home along with a detailed sketch so that you & your Realtor know exactly what your heated square footage is since Courthouse records are often inaccurate. Square footage has a direct impact on Appraised Value. How great would it be for a perspective buyer to see your home layout along with ACCURATE Square footage included in the Online Listing. Realtors typically quote Courthouse Record square footage and the records are wrong most of the time.
2. You will be able to provide the Pre-Listing Report & Sketch to the Bank's Appraiser for your buyer. Trust me, that appraiser will be VERY happy to have a recent report and sketch to refer to as it will save them time. It will go a long way to ensure that Appraiser's value is similar to the one that is provided to you in the Pre-Listing Report. If you have a cash buyer, the report will help them feel secure knowing the home is worth what you have agreed upon. Please note: The Appraisal report is 100% confidential, no one gets a copy of the report other than you, unless you give the Appraiser permission to release a copy.
3. You can use the Report as a negotiation tool or rebuttal in case the Banks Appraiser is coming in below your contract price. This can make or break your deal! Consider this report an "insurance policy" or "ammunition" for these situations.
4. If a buyer comes along and is willing to pay what you are asking, your home STILL has to appraise for at least the contract price. The Pre-Listing report will give you the peace of mind knowing that there will be no surprises come appraisal time!
DO NOT RISK LOSING THOUSANDS ON YOUR HOME, WHEN AN APPRAISAL THAT COSTS $350.00 TO $400.00 WILL SAVE YOU FROM THAT KIND OF LOSS! CONTACT A LOCAL APPRAISER WHO KNOWS YOUR AREA AND GET A PRE-LISTING APPRAISAL BEFORE YOU PUT YOUR HOME ON THE MARKET.
In order to give back to the Community and to the Realtors who have referred business our way over the years, we have started a Monthly Newsletter which will be informative on the Appraisal Process and any important Appraisal News that impacts the Appraisal Process.
These newsletters will hopefully help Realtors and their Clients get through some of the difficult times that may come with Appraisals.
Our first newsletter addressed how to Rebut an Appraisal that comes in below the Sales Price, (assuming of course that the Appraisal is flawed).
The next newsletter will deal with FHA Appraisals.
So if you would like to be "In the Know" and want to be added to our monthly email newsletter list, contact us and include your email address. Tell your friends and co-workers too. WE WILL NOT Abuse your inbox! We think you will find the newsletters to be very helpful.
Thanks for stopping by.
Our goal was met in February. 50% of our Appraisal Business was Personal Business, such as referrals from Realtors, Sellers and Buyers ordering appraisals directly from us..NON Lender Business in other words. Thank you to those Realtors, you know who you are, who have referred business to us for PRE-LISTING and Cash Buyer Appraisals. We appreciate your business very much!
TO SEE UP DO DATE CURRENT BLOGS ALL REAL ESTATE RELATED, CHECK OUT THIS WEB SITE ACTIVE RAIN AND MY BLOG ON THAT SITE:
Closings are taking longer these days not only due to increase in volume. If you are thinking Appraisers are holding up the works.....I have news and some Facts for you.....
A recent survey of appraisers across the USA was conducted and the question put to them By Appraisal Port (a widely used appraisal portal by Lenders and appraisers) was as follows:
How often does your client ask for something that is already in the original report you've submitted?
Thank you, we'll be in touch!