Inspections and appraisals can be a huge part of the process when selling your house in Louisville. Real estate transactions are often quite complicated. Therefore, it is important to understand the process in order to make the best financial decisions. Read on to find out what home sellers need to know about inspections and appraisals in Louisville.
Contingencies
Home sellers need to know inspections and appraisals are an intricate part of traditional real estate contracts. These contracts typically include an inspection contingency or due diligence contingency. This allows protection for buyers, who are given a specific time period for the inspection to be completed. Should there be any issues found with the home in Louisville, the options for both the buyer and seller are clearly outlined in the contract. Depending on how the contingency clause was written, the outcome of the inspection could cause closings to be delayed. It could even cause deals to fall through. Failure to include this clause in a contract could mean that the buyer, having decided not to complete the purchase based on the outcome of the inspection, would lose their earnest money deposit.
Repair Expenses
Home inspections focus on the condition of the property structurally, as well as the systems which keep the home a comfortable and enjoyable property. This includes items such as air conditioning, heating, plumbing, electrical systems, and the condition of the roof and foundation. The inspector will prepare a report for the buyers, to make them aware of any issues found. Depending on the conditions in the contract, after a negative report, buyers may have the option to request a time period for a second inspection, or a deduction on the price. The cost for the repairs is likely to fall on the seller’s head. It is wise to contact three professionals for estimates to get a realistic number and a timeline for completion. These out-of-pocket expenses can quite literally run into tens of thousands of dollars, depending on the severity of the problems found.
Valuation
Inspections and appraisals also bring into focus the actual current market value of the home. While the inspection focuses on issues with the home, the appraisal takes several variables into account. This includes comparing properties that have most recently sold in your area. Appraisers have predetermined values for bedrooms, bathrooms and the like. They will add value to a property with more features than the comparable properties, or subtract from the property value for what may be lacking, such as only having a one-car garage.
Mortgage lenders also require the appraisal to meet the loan-to-value (LTV) ratio. Basically, the mortgage amount is divided by the appraised value. Lenders use this measurement as a guideline. The lower the resulting number, the lower the risk on the loan. Should the loan-to-value be a higher number, the lender may require mortgage insurance to be purchased as well. Wise buyers will ensure that there is a contingency clause in the contract based upon the appraisal results as well.
Deal Breakers
Failing to understand the impact of inspections and appraisals in Louisville can lead to disastrous mistakes. This can end up costing a home seller valuable time and a great deal of money. Sadly, buyers may find their house isn’t worth what they thought only after the inspection and appraisal are complete. With these and many other clauses that can be in place to protect buyers, problems may cause sales to fall through. The buyer may ask the seller to pay for repairs, out of pocket, before closing or to deduct the value of the repairs from the price of the home and renegotiate a contract. All the while, the clock keeps ticking, and the seller is now paying to hold the property longer than expected. In reality, they are losing even more of the valuable equity that had been built in the home.
Let Us Help You
We Buy Houses in Kentucky makes real estate transactions easy, even for first-time buyers or sellers, without any of the problems that accompany inspections and appraisals in Louisville. At We Buy Houses in Kentucky, husband and wife team Daniel and Catherine Close will lay out a plan to save you valuable time and avoid what could potentially be thousands of dollars in repairs. Doesn’t an as-is home sale sound much easier?
We offer cash for houses in Louisville, Kentucky and surrounding areas, including: Bardstown, Fern Creek, Highview, Jeffersontown, La Grange, Lyndon, Mount Washington, Newburg, Okolona, Shelbyville, Shepherdsville, Shively, St. Matthews, Taylorsville and Valley Station. We also buy homes in Southern Indiana, including these areas: Clarksville, Jeffersonville and New Albany.
A professional buyer’s purpose is to solve problems for buyers or sellers, so why not let a professional buyer, like We Buy Houses in Kentucky, guide you step by step through the process? Send us a message or give us a call at (502) 383-1484 today to learn more!
