Frequently Asked Appraisal Questions And Everything You Ever Wanted To Know About Appraisals But Were Afraid To Ask

Q: What do appraisers look for during the appraisal inspection? Is it the same for an FHA loan as it is for a conventional loan?
A. In most basic terms, a house is made of a foundation, walls, and a roof. And appraiser will pay attention to all of these. When appraising a property for FHA loan, in addition to determining the market value, the appraiser also has to make certain the property meets HUD minimum standards for health and safety.
A few of the many items appraisers look for when doing an inspection for an FHA loan include peeling paint in properties built before 1979 interior and exterior semi colon exposed wood on the exterior of properties semicolon exterior grade level to the negative grade needs to be corrected semicolon and heating and cooling systems. And Appraisal is not a home inspection a home inspection by a qualified professional is recommended for every sale.
Conventional appraisals are concerned with the condition of the property and how it affects market value. If an appraiser sees a defect or an issue that raises concern, they will note it in the report and make a client aware of the problem.
Q: Why don’t appraisers include the finished basement in their report?
A: This comment is what we hear repeatedly.  FNMA, garages and basements, including those partially above grade, must not be included in the above grade room count. Fannie Mae considers a level to be below grade if any portion of it is below grade a walkout basement with finished living space is not included in the above grade room count.
That doesn’t mean that the finished walkout basement with bedrooms, full bath, media room and wet bar doesn’t get any credit or have value. It is just addressed on a different part of the appraisal form.
There are also exceptions to this rule. If a property has a kitchen on the lower level sometime seeing as a bi-level or split-level houses, this area is included in the above grade gross living area, as a kitchen is necessary for house to be functional. Another local exception is a popular 5 level split. The finished area partially below-grade typically a family room or half bath is included in the room count in the gross living area, as this area is typically finished like the above grade living area and is perceived by buyers as part of the above grade living.
Q: What happens if the appraisal value comes in lower than the contract price?
A: Despite what many Realtors feel about appraisals, it does not make us happy when appraised value is less than the contract price. It is our job to provide an opinion of the market value and in this high demand low inventory Central Ohio market, this can be quite a challenge.
Appraisers do their best to find the comparable sales that are most similar to the subject property with respect to size, quality, condition and utility. Due to the limited sales available in the same neighborhoods, it may be necessary to use older sales or find sales outside the immediate neighborhood.
If the listing agent has provided the appraiser with the comps when used when listing a property, he/she has let the appraiser know about the number of contracts presented on the property, and the other factors about listing that the appraiser might not be aware of, then there is little to provide for reconsideration of value.
In these cases, there may be an adjustment of the sales price, or the buyer may have to bring more money to make up the difference.
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Home Ready by Fannie Mae

Homeready is an affordable, low down payment mortgage product design for credit-worthy low-to-moderate-income borrowers, with expanded eligibility for financing homes in low-income communities.

Benefits
# Low down payment semicolon as little as 3% down for home purchases
# Flexible sources of funds with no minimum contribution from borrower’s own funds
# Non-occupant borrowers permitted
# Cancellable mortgage insurance (restrictions apply)
# Reduced MI coverage requirement for loan-to-value ratios above 90% (up to 97%)
# Pricing is better than or equal to Fannie Mae’s standard loan pricing (risk-based pricing waivers for LTV ratios are >80% with a credit score greater to or equal than> 680)
Borrowers
# Have low to moderate income
# Are first time or repeat home buyers
# Have a credit score greater to or equal than >620 ; borrowers with credit scores greater to or equal than> 680 may it better pricing
# Have supplemental border or rental income
# Are looking to purchase or refinance
Visit fanniemae.com/homeready for more details

5 Tips To Prevent Package Theft This Holiday Season

 We’re entering the biggest shopping season of the year. Unfortunately this is also prime season for package thieves. The Columbus Division of Police reminds you as you’re making online purchases over the next few weeks, follow these tips to avoid becoming the victim of package theft.

1. Sign up for delivery alerts so you know when your delivery is scheduled – and when the package has been delivered.

2. If you’re not able to be home when a package will be delivered, ask a trusted neighbor to hold it for you.

3. If possible, require a signature for all deliveries.

4. Consider shipping packages to your place of work or use the ship to store option.

5. Be a good neighbor! If you see a package on your neighbor’s doorstep, reach out and ask if they would like you to hold it until they are home.

Better yet, if you work from home, post on Nextdoor and offer to allow your neighbors to send their packages to your house. If you do have any packages stolen, first contact us and then check with your neighbors on Nextdoor to see if they saw anything suspicious. 

SAFETY FOR BUYERS

Three safety lessons for home shoppers.

  1. Educate yourself on the safety of an area.
    You may have some concerns over the safety of a neighborhood. The importance of educating yourselves about neighborhoods is essential. For example, you might want to drive by the property at different times of the day to get a better sense of the neighborhood for themselves and to talk to neighbors.

    Some real estate professionals provide a list of third-party resources for their buyers to check on crime statistics in an area, such as Family Watchdog to locate registered sex offenders in an area; CrimeMapping.com’s mobile app to uncover crime activity near your current location; and sites like DiedInHouse.com that reveal if any deaths occurred at the property in the past.

  2. Take extra precautions in distressed, vacant homes.
    First, when showing an REO, make sure it’s safe to go in. Your agent should have done a perimeter search around the property before entering. Do you see broken windows, a kicked-in door, or any signs of someone living there through the windows (such as a sleeping bag on the floor or food left out)? If you see such signs that a squatter may be present, don’t go inside.

    Also, homes that have been vacant may have maintenance issues. You may need to watch your footing as you tour the house, navigating away from any loose floorboards, steering clear of a rotted deck, and avoiding loose railings. Loose gutters or lighting fixtures may pose added dangers.

    Abandoned animals might be inside too. In an REO, pets can sometimes be left by the previous owner, or wild animals may find a way in. Never approach an animal. It can become hostile. Contact your local humane society or shelter.

  3. Prevent buyer regret — and illness.
    Another growing concern reported with REOs: drug contamination, and how a home’s tainted history can get lost if it sits in foreclosure limbo. The number of meth- or clandestine drug-contaminated homes is growing, according to the Drug Enforcement Agency. These drugs can seep into a home’s surfaces, and unsuspecting buyers who move in may face not only a range of respiratory illnesses or neurological problems but also a costly decontamination process of the home.

    The risk from meth and clandestine contamination in homes is a rising concern that has prompted more real estate professionals to raise the issue to their clients. For example, homes where marijuana was produced may be more prone to mold damage. Rewired electrical work also can present fire dangers too.

    No federal disclosure law exists for meth or marijuana grow houses, and the disclosure regulations vary greatly by state. Oftentimes, standard home inspections won’t turn up drug contamination problems either but requires extra testing by specialists.

    Some real estate professionals have been trained to look for the signs, like the strong smell of urine or chemical smells like ammonia or acetone; trash filled with products like paint thinner, lighter fluid, drain cleaners, and cold tablet containers; and chemical stains on the toilets and bathtubs. Or, buyers and agents sometimes may feel some of the signs when they step inside the property, such as a burning sensation in the eyes or throat.

    Buyers can be encouraged to check the Drug Enforcement Agency’s National Clandestine Laboratory Register, a searchable database of addresses that have been uncovered by law enforcement agencies to have clandestine chemicals or drug labs. Some counties and states also have databases to track such homes. They can also purchase meth-testing kits or have a professional test for contamination.

Keeping Sellers and Their Home Safe

SAFETY TIPS FOR SELLERS

  1. Prescription drugs: Remove or lock them up prior to showings.
    A growing number of real estate professionals are reporting theft of prescription drugs from sellers’ homes during open houses. Indeed, nearly half of 164 real estate professionals surveyed at a REALTORS® Expo reported knowledge of prescription drug theft taking place at open houses.

    Home sellers should use a bag to remove prescription drugs from their homes prior to showings or to properly dispose of expired prescription drugs (the bags included a list of drop-off centers for safely disposing of expired medications).

  2. Stow away valuables: Valuables include everything from the mail left on the countertops (which may contain personal information and bank statements) to such items as jewelry, artwork, cellphones, and gaming systems.

    In capturing virtual tours or photographs of the home for marketing purposes, make sure such valuables are not photographed, like a seller’s priceless coin collection, wine cellar, or equipment in a fully outfitted media room.

    Too many people fail to consider that criminals nowadays can case houses from the comfort of their computer. They can see all the person’s valuables when you put them in fliers and on a website. If the valuables are not being sold with the house, why do they need to be shown anyway?

    Before sellers leave the house for a showing, they need to be responsible for walking through the house and making sure everything of value is out of sight.

  3. Remove family photos: It’s for your safety.
    Many real estate professionals advise sellers to remove family photos from their home. But the conversations are often framed around staging and making it so prospective buyers can imagine themselves living there. Focusing on the safety of your family. You may be reluctant to remove your family photos just because I say it will help new owners envision it becoming their house.  You don’t know who’s walking through the house. You have photos of your wife, teenage daughter, children displayed, and you could have a pedophile or stalker walking through your home. Who would leave their family photos up after you say that?
  4. Make a house safe for the buyers and the agent.
    Turn on the lights prior to showings — whether it’s daytime or evening — so that agents and buyers can move safely through the home and not have to face any dark unknowns. During the initial safety check of a listing,we should ensure all rooms have adequate lighting as well.

    Also, sellers should make sure there are no potential hazards in your home, like loose floorboards or carpets. You don’t want to risk someone tripping and falling in your home and potentially open yourselves up to liability.

    It’s important to remove not only weapons like guns before showings but also not-so-obvious weapons too. For example, many home owners may have a block of knives on their kitchen countertops; remove these for the agent’s safety as well.

  5. Keep the house locked: Consider extra monitoring.
    Another safety reminder for you: Doors need to be kept locked at all times. A home is being presented to the public, and it may attract intruders.

    Home sellers should know about deadbolt locks and keeping them locked. Also, sliding glass doors can be secured with bars and extra locks. Motion-sensor lights can be a good option for outdoor areas for added security. Windows should be checked to make sure they are locked securely.

    Take an extra step with some of your properties, particularly vacant ones, and possibly installing a wireless security system. A company called Presence allows you to turn your old smartphone device into a home security system, for free. By uploading the video-monitoring app, you can use your old smartphone to feed videos remotely to your current phone to keep an eye on the listing. You can also use a motion-detection sensitivity feature to alert you to any detected movements in front of the camera and send a video clip to you via email. Presence works with iOS, Android, Amazon Alexa, and web browsers.

  6. Beware of unexpected visitors coming to your doorstep.
    You need to know that when your house is for sale, you may also get some unexpected visitors who ask to see their home.

    Instruct visitors there are proper procedures for showings: Only real estate professionals using the lockbox should gain access to their home.

    What’s more, a growing rental fraud scam is causing more home sellers to report renters who are showing up at you doorsteps, too, ready to move in. Real estate professionals say their for-sale listings are getting scraped from websites by scammers who then place them as a rental listing on sites like Craigslist.

Down Payment Assistance in Ohio

Need help with a down payment and closing costs?  The Ohio Housing Finance Agency (OHFA) can help.

OHFA offers 30-year, fixed-rate conventional, FHA, VA and USDA-RD government loans with generous income and purchase price limits, designed especially for home buyers with low- and moderate-incomes.

Your Choice! Down Payment Assistance allows home buyers to choose either 2.5 percent or 5 percent of the home’s purchase price. Assistance can be applied towards down payments, closing costs or other pre-closing expenses. This assistance is forgiven after seven years. If you sell or refinance your home within seven years, he/she must repay all of the assistance provided.

Eligibility Requirements
You may qualify for an OHFA home buyer program if they meet the criteria listed below:

  • income and purchase price limits;
  • credit score requirements, conventional, USDA, VA and FHA 203(k) loans: 640 or higher;
  • FHA Loans, non-203(k): 660 or higher; and
  • debt to income ratios for your loan type.

Homebuyer Education Requirements
Qualified buyers are required to complete free home buyer education, and OHFA’s streamlined education program allows you to complete a course offered by any U.S. Department of Housing and Urban Development (HUD)-approved counseling agency in Ohio. Please note, OHFA home buyer education is not completed until after home buyer has submitted their loan application with their loan officer. Home buyer Education is not required for borrowers who are only registered for their MTC Basic program.

To apply
OHFA works with lenders, credit unions and mortgage companies across the state. To find an OHFA-approved lender in your area, along with tips to help with the application process, call OHFA toll-free at (888) 362-6432.

Fall Maintenance Checklist

Every season change helps to remind you to do a few things around the home to keep it in tip top shape.  Here are some things to get done this fall.

 

  • Check all window and door locks for proper operation
  • Unhook all hoses from home
  • Check your home for water leaks
  • Have a heating professional check your heating system every year
  • Run all gas-powered lawn equipment until the fuel is gone
  • Make sure that the caulking around your bathroom fixtures is adequate to prevent water from seeping into the sub-flooring
  • Replace your furnace filter
  • Inspect, change batteries and clean dust from the covers of your smoke and carbon monoxide