Oh no! The Appraisal is Low!

Congratulations! Your offer was accepted on a home! ....But your lender ordered the appraisal and it's less that what you offered for the home...

Is the value hanging in the balance? 

So your appraisal was low... now what?
Get a copy of the appraisal from the lender and open up a discussion with the seller. If it's an FHA appraisal, the appraised value will stick with the home for six months or maybe longer, even if the contract is terminated and another buyer comes in who agrees to the listed price.

Then what?
You have some choices. Some are in the buyer's favor and some are in the seller's favor.  This is where having an agent good at negotiating can really help!

• Have your agent review the comparable properties selected and the facts, such as number of rooms, age of the property, square footage, etc, in the appraisal for errors.  If justifiable errors are found, the appraiser may adjust the value.
• Ask the seller to reduce the purchase price to the appraised price. Since almost every buyer needs mortgage funding to purchase a home, it's highly unlikely that the seller will be able to find a buyer who won't be negatively affected by a low appraisal. The worst the seller can say is no.
• Pay the difference in cash. If you were planning to put a large amount down, you may be able to reduce the amount you were going to put down and still qualify for the loan. Keep in mind that a higher loan-to-value ratio will result in a higher interest rate and higher payments. In addition, if putting less money down brings your loan value to more than 80 percent of the appraised value, you'll have to pay mortgage insurance.
• Decide on a compromise with the seller if neither of you can afford to drop the price completely or pay the difference in cash. As long as you still want the house, it's better for both of you than walking away from the deal.
• See if the seller and your lender will allow for the seller to hold a privately held second mortgage. Some lenders will not allow for a total mortgage amount over a certain percent, but others might allow it if your credit is good enough, you're putting enough money down and the lender feels it's an acceptable risk.
• Get a second appraisal. You may have to change lenders to do this, and there's no guarantee that another appraisal would be higher (it may even be lower). FHA appraisals require the appraiser to register his appraisal to the property, so a second appraisal is not an option in those cases.

A good Realtor® will help you navigate rocky waters such as these.

Can you keep the family photos up or must they come down?

I’m in a lot of homes every week as I consult with buyers and sellers and I do see many beautiful and stylish photo displays on the wall. Wall Words are very popular right now as well as frames with meaningful sayings that celebrate the family displayed and what is important to them. I see gorgeous photography of families, children and pets. And let’s not forget those baby shots that just melt your heart!

When you are SELLING…as stunning as these pictures and wall displays are, they are DISTRACTING to your potential buyers.

So…now the BIG question….What do we do with these beautiful photo displays on the walls?

Do we take them all down, patch the wall/re-paint and stare at a blank boring wall?
Do we add a piece of artwork instead?
What if we have A LOT of walls with photos?

Don’t despair! There is a STAGING TECHNIQUE that works quite well.

One of the easiest and inexpensive ways to NEUTRALIZE those family and pet photos is to just replace the photos inside.

Here’s how in 3 Easy Steps:

Take inventory of all the personal photos you need to cover; note orientation and frame sizes.

Seek out your vacation photos of landscape or visit a photo sharing site and do a search for black and white nature/trees/flowers/landscapes... or even architectural photos. Whatever you prefer or will work for the room and style of house. (It can be in color if that works best in that particular space.)
Once you find the ones your looking for, print them off in the appropriate size either at home if you have a photo printer or online to pick up at the local box store. This works best for 4×6, 5×7 and 8x 10. (Any bigger than that, it gets a little more difficult.)
Put it over the existing photo in the frame and TA DAH!…..you have a nice, neutral photo to display temporarily.

Remember that there is also a balance that needs to be achieved throughout the house when it comes to all those personal photos. To achieve balance, follow these guidelines:

There may be some walls that everything will just need to come down and you’ll patch and repaint.

There may be a wall that will need a piece of artwork in place of the photos.
Be sure that all the frames in your display are the same. This creates a nice, clean simplistic presentation that does not distract from the selling features of the room. If you have a display of photos with all different types of frames, they definitely need to come down. Please do not attempt to replace the photos with the neutral photos suggested above using all those different frames. It just won’t work.

What about those collage frames that hold 4-10 pictures? Gone. Again, please do not attempt to replace the photos with the neutral photos suggested above using all those different frames. It just won’t work.

Yes, there can be people in your staging photos BUT they should be silhouettes or distance shots.

Are you feeling sentimental about taking down the photos of your loved ones? I promise you'll appreciate them more after they've been gone for just a bit.

So, are you going to swap out those pictures so people look at the house or are you going to keep your personal life on display?

Call me if you need help!

Do This, Don't Do That

When it comes to buying a house, a list of do's and don'ts can help you get off on the right foot especially if you plan to apply for a mortgage.  Here are some basic dos and don'ts to help you stay on track with your home ownership plans.

Do This

● Do Pay Old Debts – The less debt you have, the easier it’s going to be to get a great mortgage. Paying down your debt as this is another area that a lender will look at if you don’t have a lot of capital to put down as collateral.
● Do Pay Off Early – If possible, don't ever make minimum payments. Adding a little extra every month to debt payments is a really good help when trying to get a mortgage in the future. This applies to existing mortgages as well. The quicker you can pay it off, the better.
● Do Show Evidence of Down Payment Savings – Though some loans will allow you to receive "gift funds" from a family member for your down payment, it is best to show you have acculated your own down-payment savings

Don't Do That

● Don’t Miss Payments – If you currently have a mortgage or any other type of loan, make sure you always make the payments on time. Car payments, credit card payments, school loan payments... it doesn't matter what type of loan it is, you need to pay on time every time.
● Don’t Overextend – Many people like to live beyond their means – i.e. spend more than they make – but this can quickly lead to problems. When getting ready to apply for a mortgage, make a household budget and practice sticking to it for six months before you apply. Use a "cash-only" system so you are not buying anything on credit.   By not overextending yourself financially, you can increase your chances of mortgage approval.

Want more mortgage advice?  I have have a handful of trusted mortgage professionals that would be happy to discuss your options and create a plan to get you the best possible loan terms for your situation.  Contact me now!

Are you qualified to buy that house?

Did you know most sellers will only entertain offers that are accompanied by a pre-qualification or pre-approval letter from a lender (or proof of funds)?  Many sellers also require that buyers be pre-qualified before even booking a showing for their home.

Have you found a lender yet to get pre-qualified? If not, send me a message or give me a call and I can refer a couple.


Call Sarah! 651-964-0289
Facebook.com/CallSarahFirst

Are you ready to buy or sell?  Need help determining if you are ready?  I can help!
www.CallSarahFirst.com

Tips from the Red Cross to Beat the Heat!

It's summer. No doubt that means some HOT days so take a look at these tips from the Red Cross and be safe!

Heat Index

Prepare for the heat:

•Listen to local weather forecasts and stay aware of upcoming temperature changes.
•Know what a Heat Index Is: The heat index is the temperature the body feels when the effects of heat and humidity are combined. Exposure to direct sunlight can increase the heat index by as much as 15° F.
•Discuss heat safety precautions with members of your household. Have a plan for wherever you spend time—
•home, work and school—and prepare for the possibility of power outages.
•Check the contents of your emergency preparedness kit in case a power outage occurs.
•Know those in your neighborhood who are elderly, young, sick or overweight. They are more likely to become victims of excessive heat and may need help.
•If you do not have air conditioning, choose places you could go to for relief from the heat during the warmest part of the day (schools, libraries, theaters, malls).
•Ensure that your animals’ needs for water and shade are met.

Safety during a heat wave:

•Never leave children or pets alone in enclosed vehicles.
•Stay hydrated by drinking plenty of fluids even if you do not feel thirsty.
•Avoid drinks with caffeine or alcohol.
•Eat small meals and eat more often.
•Avoid extreme temperature changes.
•Wear loose-fitting, lightweight, light-colored clothing. Avoid dark colors because they absorb the sun’s rays.
•Slow down, stay indoors and avoid strenuous exercise during the hottest part of the day.
•Postpone outdoor games and activities.
•Use a buddy system when working in excessive heat.
•Take frequent breaks if you must work outdoors.
•Check on family, friends and neighbors who do not have air conditioning, who spend much of their time alone or who are more likely to be affected by the heat.
•Check on your animals frequently to ensure that they are not suffering from the heat.

Know the signs of heat related emergencies:

•Heat cramps are muscular pains and spasms that usually occur in the legs or abdomen caused by exposure to high heat and humidity and loss of fluids and electrolytes. Heat cramps are often an early sign that the body is having trouble with the heat.
•Heat exhaustion typically involves the loss of body fluids through heavy sweating during strenuous exercise or physical labor in high heat and humidity.
•Signs of heat exhaustion include cool, moist, pale or flushed skin; heavy sweating; headache; nausea; dizziness; weakness; and exhaustion.
•Move the person to a cooler place. Remove or loosen tight clothing and apply cool, wet cloths or towels to the skin. Fan the person. If the person is conscious, give small amounts of cool water to drink. Make sure the person drinks slowly. Watch for changes in condition.
•Heat stroke (also known as sunstroke) is a life-threatening condition in which a person’s temperature control system stops working and the body is unable to cool itself.
•Signs of heat stroke include hot, red skin which may be dry or moist; changes in consciousness; vomiting; and high body temperature.
•Heat stroke is life-threatening. Call 9-1-1