Home Seller’s Guide
CYNTHIA RICH | REALTOR | 404-402-1084
the team Meet
TAMRA WADE BROKER & OWNER
Tamra has been a career real estate broker, successful entrepreneur, and inspiring leader in the new home and residential real estate industry for over 23 years. Tamra Wade launched her real estate career in 1999 and has grown from being a new home agent to leading a top-tier real estate brokerage and the #1 RE/MAX real estate team in Georgia.
ANNA KIRCHOFF
SHERI LYNN BOURRIE
Development & Production Director Anna brings a decade of real estate expertise to her role as Development & Production Director. Her extensive experience in the industry ensures she skillfully manages and oversees the development and production of high-quality real estate projects. Anna's dedication and leadership are pivotal in driving success and innovation within the company, as she mentors and coaches our agents day in and day out.
Director of Finance
Sheri serves as the Director of Finance for RE/MAX TRU. With her strong financial acumen and extensive experience in the real estate industry, Sheri ensures the financial health and stability of our brokerage. Her strategic insights and meticulous attention to detail drive financial success and support the growth initiatives of our real estate operations and our agents as well.
TRACEY CURTIN
TAYLOR FIDLER
Tracey is dedicated to ensuring smooth transactions and providing support to both staff and fellow agents. With a keen eye for detail and a passion for real estate, she excels in facilitating seamless processes and fostering a collaborative environment. Executive Lead Coordinator & Realtor Empowerment Specialist
Marketing & Social Media Lead
Real Estate Marketing extraordinaire! With a creative flair and a strategic mindset, Taylor crafts compelling marketing campaigns to showcase your properties in their best light. Leveraging years of experience in real estate marketing, Taylor utilizes innovative techniques to drive engagement and attract potential buyers.
RE/MAX TRU gives you an incredible advantage when buying or selling a home because of the 23+ years of experience you will receive from Tamra Wade and her entire team. Her ongoing commitment to be the best in the industry resonates with everyone associated with RE/MAX TRU and the result is more homes bought and sold in Atlanta's highly competitive landscape. The combination of the branding power of RE/MAX, along with the highly skilled RE/MAX TRU team, give you, the consumer, a global reach through one of the most recognized real estate companies in the world. About Us
$468M In Sales In 2023
22 New Agents In 2023
#1 RE/MAX Team in GA for 10+ Years
#1 in 2023 for RE/MAX Closed Transactions in Georgia – Teams #1 in 2023 for RE/MAX Top Commissions Earned in Georgia – Teams #4 Owner-Owned RE/MAX Brokerage in the U.S. 2023 #4 Top 100 Team Residential & Commercial 2023 #4 Top 50 Large Team Residential U.S 2023 #1 Contributing office for Children's Miracle Network in Georgia for 2022 #1 in 2023 for RE/MAX Closed Transactions in Georgia – Teams #1 in 2023 for RE/MAX Top Commissions Earned in Georgia – Teams Mega Team Top Producer with Northeast Atlanta Metro Association of Realtors 2023 RealTrends’ “The Thousand” Rankings – #53 & #64 2023 Real Trends + Tom Ferry “America’s Best Real Estate Professionals” list
Pre-Listing Process
PREPARING YOUR HOME FOR SALE
Home is where your heart is. Houses, on the other hand, are commodities sold on the open market. Most people do not see their houses after living there for a while. They do not notice the effects of gradual physical deterioration and junk accumulation. Little stuff to the seller; not so little stuff to a buyer! If you make the right improvements when preparing your house to sell, you increase the odds of selling it quickly for top dollar. If you do something wrong or make the wrong changes to your property, you waste the time and money you spent, prolong the sale or reduce the ultimate sale price.
THE EXTERIOR
Buyers generally decide if they want to see the inside within 20 seconds of viewing your property's external attractiveness (curb appeal). No matter how magnificent your house is on the inside, many buyers will drive by without even stopping if the curb appeal doesn't say, "I'm loved, and I'm cared for." The following, at a minimum, should be addressed when you put your house on the market: Attractive landscaping provides instant curb appeal. Keep the lawn mowed and tidy. Freshen the flower beds. Add fresh pine straw or chips. If the exterior paint is old and not in top condition - paint. A bucket of paint provides a good return on investment! On top of making your house look better physically, psychologically, it translates to the buyer that you love the house so much that you take care of it. That counts. Repair/replace torn window screens.
Replace cracked window panes. Make sure windows are operable. Wash windows so they sparkle. Pressure wash the deck and driveway if necessary. Clean the gutters. If the roof is stained, have it professionally cleaned.
INTERIOR
Exteriors attract, but interiors sell! Curb appeal draws buyers into your house, but appealing, well-cared-for interiors make the sale. Usually, you do not have to spend thousands of dollars on your home prior to putting up the For Sale sign. On the contrary, the little things you do generally give the most significant increase in value.
FOLLOW THE 3 C’S
Clean it up, clear the clutter and make cosmetic improvements.
CLEAN, SCRUB AND POLISH
Your stove, oven, refrigerator, microwave oven and other appliances must be spotless inside and out. Scour walls, floors, bathtubs, showers and sinks until they sparkle. Buyers will notice strong smells as soon as they enter your front door, so eliminate smoke, mildew and pet odors. Cleaning drapes and carpets help get rid of odors. Dehumidifiers help musty basements. If you are a smoker, clean all ashtrays daily. Use air fresheners or citrus-scented potpourri to keep your house odor-free. Whether you do the work or hire someone, ensure your house is spotless and odorless.
CLEAR OUT THE CLUTTER Clutter can reduce your house's value. Clear away kitchen counters and keep dirty dishes out of the sink. Eliminating clutter and excess furniture makes rooms appear larger. Recycle those stacks of old magazines and newspapers you have been saving for no good reason. Dump all that junk you have accumulated in your attic and basement over the years. Closet space sells houses. Clean those closets out and organize them. Get rid of all those clothes you do not wear anymore. Make them look large and roomy! Do the same with built-in drawers. Like it or not, serious buyers will inspect your closets and builtin drawers.
MAKE COSMETIC IMPROVEMENTS
Painting isn't expensive if you do it yourself, but be careful when selecting colors. Avoid bold colors with strong visual impact. Stick to conventional soft whites and neutral colors that will not clash with most prospective buyers' tastes. If your finished basement is dark and gloomy, paint the walls and ceiling a light color.
MAKE COSMETIC IMPROVEMENTS
Pay attention to everything in your house that could cause the buyer to "reduce your price." Find it and repair it before you put it on the market. Look for hairline cracks over doors or windows and nail pops in sheetrock. Locate any ceiling stains and the source of the leak. Check for windows with cracked panes that don't open and shut properly. Watch for doors that stick, do not close or slide properly. Examine bathrooms for signs of mildew, rust stains in sinks and toilets, missing tiles or grout or inadequate caulking around tubs. Check for drippy faucets, slow-draining sinks and tubs, broken mirrors, etc. Check all kitchen appliances that remain with the property. PRE-INSPECTION MYTHS Expect inspectors to poke into everything - your house's roof, chimney, gutters, plumbing, electrical wiring, heating and cooling systems, insulation, smoke detectors, all the permanent appliances and fixtures and the foundation. They will also check for health, safety and environmental hazards. You can bet they'll also look for damage from wood-destroying insects (carpenter ants, termites and powder-post beetles), dry rot and fungus infections. Whew! The question is, what do you, the seller, do about inspections? Pre-inspect before the buyer, or wait until the buyer inspects to respond?
In the State of Georgia, a seller must disclose any known defects to prospective buyers via a Seller's Property Disclosure made part of the sales agreement. For this reason, some real estate agents argue against getting a house inspected before putting it on the market. These agents point out that you can't tell buyers about problems if you don't know the problems exist. They also believe that handing buyers a long list of repair problems as they enter your house will turn many of them off. They recommend getting buyers emotionally committed to the property first before their own inspectors drop the bomb. That line of reasoning is based on an ostrich-like logic: What you don't know can't get you into trouble - for a while, anyway. Some agents may also use a second argument to convince sellers to refrain from getting pre-inspections on their property. Buyers generally won't believe anything in reports paid for by sellers. According to these agents, buyers suspect you will hire a go-easy inspector to falsely report that your house is as solid as the Rock of Gibraltar. So, why spend several hundred dollars on an inspection report that buyers won't believe? Or worse yet, the buyer will still inspect and come up with more. You can find a nugget of truth in both these arguments. On the other hand, the best defense is a good offense. Beat buyers to the punch. Get your inspections before they get theirs. Discover everything wrong with your house before putting it on the market. Defusing a crisis begins by discovering that a problem exists. Consider these four reasons for having your property thoroughly inspected before marketing.
ADVANTAGES OF PRE-INSPECTIONS
DAMAGE CONTROL
Suppose that your house has a structural defect. Why wait passively for an ultimatum to fix the defect after you have already negotiated your best price or else kiss the deal goodbye? If you discover the problem before marketing the house, you can either disclose it to prospective buyers with a repair estimate and price accordingly, or you can have the work done by a competent specialist (with work orders, costs and guarantees) before putting the house up for sale. Either way, your negotiating position is much stronger if you know about problems in advance and accurately know the cost to correct them. SPECIAL NOTE: It's a safe bet you will not be invited to join the buyers when their property inspector goes through your property. Having your own pre-inspection gives you and, if you like, your agent the opportunity to tag along with the inspector. There is no substitute for seeing defects with your own eyes. FINANCIAL PLANNING Chances are you are going to be buying another house. Therefore, it is essential to have a realistic estimate of your net proceeds of sale before committing to buy your next home. Flaws hidden out of sight, behind walls or concealed in inaccessible areas, such as under your house or in the attic where you can't see them, are time bombs.
Defects you cannot see and do not know about, such as faulty wiring, termite damage, a cracked heat exchanger in your furnace, dry rot, asbestos insulation, lead in your water pipes and so on, are potential deal killers. A good pre-marketing inspection can reveal all these problems. Asking prices aren't sales prices. If your house needs significant repairs, you will pay for them one way or another. You can have repairs done before the sale, reduce your asking price to reflect the cost of repairs or give buyers an escrow credit to do the work themselves. Remember, buyers will always ask for more dollars than the repairs may cost. FINE TUNING Professional property inspectors can help you spot minor defects such as dirty filters in the heating system, ventilation problems in the basement. garage or crawl space, blocked gutters, loose door knobs, stuck windows, a missing chimney hood or spark arrester and so on. Eliminating minor maintenance problems like these gives prospective buyers who tour the property a favorable and correct impression that your house is exceptionally well maintained.
PEACE OF MIND
The inspector alerts you to the health and safety precautions you should take. Install smoke detectors and ground electrical outlets, and keep flammable products away from furnaces, heaters and fireplaces. These examples make your house safer for the next owner and safer for you as long as you continue living there.
LOCATING PROPERTY INSPECTORS
Locating house inspectors is usually relatively easy. One good source of property inspectors is your real estate agent. Ask for a list of property inspectors who perform only property inspections. Good professional inspectors earn their living solely from inspection fees and do not do corrective work.
SELLER'S PROPERTY DISCLOSURE STATEMENT
While caveat emptor (buyer beware) is still generally the law in Georgia, there are three situations where a seller of residential real estate can be held liable if they fail to disclose defects in the property.
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When the seller knowingly lies about an existing concealed defect (active fraud).
When the seller doesn't lie but takes steps to prevent the discovery of a concealed defect.
When a seller knows about a concealed defect and does not attempt to conceal it, but makes no disclosures of its existence.
The Georgia Association of REAL TORS® developed a unique tool to help a seller disclose defects in the property. It is a list of questions relative to the physical condition of the seller's property called the Seller's Property Disclosure Statement. The GAR contract provides that this form becomes a part of the sales contract and assumes that the buyer will see this list before making an offer on that particular property. Sellers are not obligated to complete this form since we are still a caveat emptor state, but the seller should be aware that:
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Failure to complete the statement does not relieve the seller of disclosing any known defects.
Refusing to complete the statement might not be in his best interest. Use of such a form is becoming more customary in the industry, and a buyer might be reluctant to purchase a property where no statement has been completed. Completing the statement but answering "I don't know" in all areas will not protect the seller from the disclosure obligations listed above.
The Marketing Process
INTRODUCTION
Not all homes are created equal and neither are all REALTORS®. That sets RE/MAX TRU apart is our dedication to the highest level of performance for our clients. The marketing of your property is of utmost importance. Our marketing plan aims to touch every possible prospect for your home through internet promotion, direct mail and focused distribution of information to agents & buyers in your area. It has been reported that over 95% of all first inquiries regarding real estate are through the Internet. Therefore, we have placed critical importance on the use of both technology and fundamental applications to ensure you the most satisfaction throughout the process of marketing your property.
We have developed a comprehensive media campaign to introduce your property to the market. This plan includes website promotion, e-mail campaigns to our agent database of over 51,000 local agents, social media content created & shared, custom brochures, custom flyers, & more! Teamwork is a vital component of a successful campaign to sell your home. Your responsibility is to make sure that your house is in the best showing condition possible before we begin our promotion and advertising. We can assist you with a checklist of important details and the names of resources to help you complete any needed repairs.
YOUR PROPERTY'S Marketing Plan
Networking A large percentage of real estate transactions happen with co-operating agents in the country. I will expose your listing to this market. Signage A sign will be placed in your yard as well as pointers and open house signs before an open house. These will be placed at the most opportune times to gain the most exposure. Online Exposure Buyers in today's market first start their search online. We will meet your potential buyer where they are - online! Not only will your home be featured in the local MLS, it will also be featured on the major 3rd party real estate sites and syndicated to hundreds of other listing sites. Your home will be featured on our company website, and social media. E-Mail Campaign An e-mail will be sent to our current buyer database of thousands of buyers searching for properties on my website. A new listing email alert will go out to my agent network of thousands of agents in the area. Print Material Highly informative and creative property flyers will be designed, printed & displayed inside your home. These help potential buyers remember the key items and unique features of your home.
YOUR PROPERTY'S Marketing Plan
Lockboxes Lockboxes are essential for the safety of all. They allow an agent to show your house whenever he or she needs to, rather than relying on you the owner for a key. Owners are also expected to vacate the property for showings. Having a lockbox makes this process much easier for all involved. Showings & Feedback When we list your home, you will also be signed up with a showing service that immediately communicates with you when a showing is scheduled. When feedback isn't left, I will follow up with those agents requesting their feedback within 24 hours. Open Houses After reviewing many surveys, we have discovered the perfect formula for what day is best to list a home and the perfect day for an open house. Social Media We practice regular social media marketing on today's top social sites which include and are not limited to: Facebook, Instagram, Linkedln, YouTube, and Twitter/X. At RE/MAX TRU, we share about all of our listings on a consistent basis and we guide out agents on best practices for real estate marketing in the social world as well.
The Showing Process
SHOWING YOUR HOME
You are ready! You've cleaned, scrubbed, polished, shined, repaired and staged. You are now ready to "bring on the buyers." However, you can do a few final things to maximize the showing process. BRIGHT, WELL-LIT HOUSES SEEM MORE CHEERFUL, INVITING AND SPACIOUS Keep draperies and blinds open to let in light. Turn on all lamps in every room (even during the day to brighten the room). Turn on all hallway and stairwell lights. Turn on lights in closets, over countertops and cooktops. At night, turn on porch lights and outdoor lighting.
Add bowls of fresh fruit to countertops and fresh flowers to a table. Create fragrant aromas like freshly baked cookies, brewed coffee or cinnamon simmering on the stove. Set the table with attractive, color coordinated placemats, napkins, china, etc. MAKE IT LOOK LIVED-IN
MAKE YOURSELF SCARCE DURING SHOWINGS
If the buyer comes in with an agent, leaving while the property is being shown is best. It is very intimidating to buyers to have the owner hover over them while they are touring the property. They don't feel free to explore closets, cabinets and all those nooks and crannies that every serious buyer wants to inspect. Secondly, hovering over buyers often sends the wrong signals - signals that you are highly anxious to sell, possibly resulting in a low offer. Sometimes, the most important information you get from a showing is the reason a buyer doesn't like the property. Correcting a problem or overcoming an objection starts with finding out that there is one. TAKE CARE AND PROTECT YOUR VALUABLES Unfortunately, we do not live in a perfect world. Therefore, the best plan is to ensure no open invitation. Before your house is shown, you should ensure that all expensive jewelry, loose money, credit cards, blank checks and any other small valuables are put in a safe place and out of harm's way.
SHOWING EXPECTATIONS Your house is ready and buyers are coming! How is it handled? Will you show by appointment or put a lockbox on your door? What if nobody comes? MAKE SHOWING YOUR PROPERTY EASY FOR AGENTS The easier your house is to show, the more often agents will show it. If you haven't agreed to a lockbox, re-think the idea. When an agent shows your house using a lockbox, you always know who and when they entered your home. Your agent will electronically retrieve the information from the lockbox after the showing and TOO FEW SHOWINGS? If there are few showings, the price may be too high. Your home may be worth the price, but if you are not having many showings, the market will not bear the price. Remember, the market determines the price. If there is little interest. consider adjusting the price. If a house stays on the market too long, it can adversely affect the selling price. Buyers will be afraid to purchase because they think there could be a significant flaw in the house, or they could face the same problem when they get ready to sell. Remember, you don't want to list your home to "own it." You want to list your home to "sell it." call the agent for feedback. Your agent will also provide additional information to the showing agent that would be helpful in the selling of your home. Your agent will pass along to you any feedback that may be helpful in the selling process.
NO-SHOWS?
You may occasionally be disappointed when an agent schedules a showing and doesn't show up. Don't be! There are a number of reasons for a no- show. Perhaps the buyers fell in love with the home they saw just before yours. A buyer's baby may be misbehaving or become ill in the car and it was time to stop. Or the buyers did not have as much time as they had previously told their agent. When things like this happen, the agent may not have time to call you and explain to list your home to "sell it."
The Contract Process
WRITING THE CONTRACT: GLOSSARY OF TERMS
Buying or selling a property is a complex transaction involving numerous parties and, commonly, conflicting interests. To reduce the possibility of misunderstanding or miscommunication between these parties, all negotiations regarding the purchase or sale of real estate should ultimately be reduced to a written agreement. When signed by all parties, this agreement should represent the entirety of the agreement between the buyer, seller and any other party materially involved in the transaction. The section below describes important areas of the written agreement. ultimately forming a contract between the two parties. You must read and UNDERSTAND the entire agreement prior to signing it. Your professional real estate agent or attorney can be invaluable in helping you understand the important details contained in this document.
PURCHASE AND SALE AGREEMENT: The document that creates a valid, enforceable contract between a buyer and seller in Georgia is called a Purchase and Sale Agreement. This contract has been created and pre- approved by attorneys and the Georgia Association of REALTORS®( GAR) and includes. but is not limited to, terms related to the legal description of the property, purchase price, method of payment. buyer's earnest money, closing date, and possession, inspection and agency. No longer is there a finance contingency included in the Purchase and Sale Agreement. If a buyer needs a finance contingency, it must be stipulated by an attached exhibit stating the loan terms. Otherwise, the contract states only that the buyer is paying cash. OFFER AND COUNTER OFFER: Creating a Purchase and Sale Agreement involves negotiation and may require several iterations to arrive at a complete agreement between the parties. An offer or counteroffer is created whenever a party initiates changes or adds to a Purchase and Sales Agreement. The buyer. or buyer's agent, presents offers to the seller's agent; the seller's agent in turn, presents the offer to the seller. The seller may accept the offer as is or make a "counteroffer." Any changes to the offer automatically reset the time limits and void the original offer once received by the original offering party. While negotiating a purchase or sale, it is important to remain aware of the time limits each party allows for response. Time is of the essence in real estate agreements, and if you miss a deadline, you may miss an opportunity or, worse, be committed to something you didn't want. BINDING AGREEMENT: A Binding Agreement is created when one party presents a signed written offer to purchase or sell the property to a second party, and that party accepts the same offer in writing, unchanged, and delivers written acceptance back to the offering party before the time limit in the offer expires. In the GAR (Georgia Association of REALTORS®) Purchase and Sale Agreement, the date the parties reach mutual agreement is referred to as the Acceptance Date. The date the offering party receives the written notice of acceptance is referred to as the Binding Agreement Date. The party receiving the written notice of acceptance is responsible for notifying the other.
DUE DILIGENCE PERIOD : In the current Purchase and Sale Agreement. the inspection occurs during due diligence. The buyer has an agreed-upon amount of time from the Binding Agreement Date to conduct any evaluations, inspections, appraisals, examinations, surveys or testing at the buyer's sole expense during this period. The buyer may terminate the agreement during that time for any reason and receive a refund of their earnest money. To terminate the agreement, the buyer must give the seller written.notice before the due diligence period ends. However, the buyer may want to proceed after the inspection. If so, the buyer may give the seller an amendment to address concerns (i.e., repairs) with the property, which can then be negotiated between the buyer and seller. Buyers also now have the specific responsibility to determine neighborhood factors that may be undesirable. The GAR Purchase and Sale Agreement instructs buyers to research the registered sex offender database if they are concerned about offenders residing in the neighborhood. Once that is done and the due diligence period has expired, the buyer must proceed with the sale. EARNEST MONEY DEPOSIT: The earnest money or "good faith" money that accompanies the Purchase and Sale Agreement or offer is typically one percent to five percent of the sales price (this amount may be negotiated). A secure link will be sent to you with wiring instructions or ACH deposit instructions for the selling broker's escrow account within five banking days of reaching the Binding Agreement Date. It is always a good business practice for you to verbally verify wiring instructions with the recipient. The Purchase and Sale Agreement does state that if the buyer breaches any of the buyer's obligations or warranties under the contract, the holder or seller may have the right to retain earnest money as liquidated damages. Recent changes to the GAR Purchase and Sale Agreement have tightened the buyer's responsibility to obtain financing and perform other duties that may prove to be advantageous to certain sellers.
APPRAISALS: The Purchase and Sale Agreement does not contain a pre- printed appraisal contingency. However, some lenders will only offer the buyer a loan if the property appraises for the contract price. The buyer and seller may choose to renegotiate to the lesser appraised value. When a buyer has added an appraisal contingency to the special stipulations, the disposition of the contract will follow the terms of contingency. CLOSING DATE AND POSSESSION: The Purchase and Sale Agreement provides that the closing shall be on a specific date, at a specific location and possession will follow either the closing or other time as mutually agreed. The parties further agree that the buyer will allow the seller to retain possession through closing, through a number of hours after closing, or within a number of days after closing. This section of the contract also states that both parties agree that should the loan be unable to be closed on the proposed date or that the seller fails to satisfy title, either party, upon written notice provided before the agreed upon closing date, can extend the contract closing date up to seven days. Once either party uses this option, the right terminates and can no longer be exercised. RIGHTS AND RESPONSIBILITIES: The Purchase and Sale Agreement not only outlines the details of the agreement between the parties, it also determines the disposition of earnest money, the resolution of disputes between the parties and limits the liability of certain parties to the transaction. The agency and brokerage section defines representation for both parties to the contract and defines the rules of engagement between brokers, agents, clients and customers. Sections of the Purchase and Sale Agreement also dictate how communications are exchanged between the parties and provides for specific contact methods.
The Appraisal Process
WHAT IS AN APPRAISAL?
An appraisal is an unbiased, professional opinion of a home's value. Appraisals are almost always used in purchase and sale transactions and are commonly used in refinance transactions. In a purchase and sale transaction, an appraisal is used to determine whether the home's contract price is appropriate given the home's condition, location and features. A refinance assures the lender that it isn't handing the borrower more money than the home is worth. Lenders want to ensure that homeowners are not over- borrowing for a property because the home serves as collateral for the mortgage. If the borrower should default on the mortgage and go into foreclosure, the lender will recoup the money it lent by selling the home. The appraisal helps the bank protect itself against lending more than it might be able to recover in this worst-case scenario.
THE APPRAISAL PROCESS
Because the appraisal primarily protects the lender's interests, the lender usually orders the appraisal. According to the Appraisal Institute, an association of professional real estate appraisers, a qualified appraiser should be licensed or certified (as required in all 50 states) and be familiar with the local area. Federal regulations state that the appraiser must be impartial and have no direct or indirect interest in the transaction. Fannie Mae requires appraisers to certify they have experience appraising similar properties in the same geographic area. A property's appraisal value is influenced by recent sales of similar properties and by current market trends. The home's amenities, number of bedrooms and bathrooms, floor plan functionality and square footage are also key factors in assessing the home's value. The appraiser must do a complete visual inspection of the interior and exterior and note any conditions that adversely affect the property's value, such as needed repairs. Typically, appraisers use Fannie Mae's Uniform Residential Appraisal Report for single-family homes. The report asks the appraiser to describe the interior and exterior of the property, the neighborhood and nearby comparable sales. The appraiser then provides an analysis and conclusions about the property's value based on their observations. The report must include a street map showing the appraised property and comparable sales used, an exterior building sketch, an explanation of how the square footage was calculated, photographs of the home's front, back and street scene, front exterior photos of each comparable property used and any other information, such as market sales data, public land records and public tax records, that the appraiser uses to determine the property's fair market value. An appraisal costs several hundred dollars, and generally, the borrower pays this fee.
Individual states license appraisers after completing coursework and internship hours that familiarize them with their real estate markets. The lender might use an appraiser on its staff or contract with an independent appraiser. If you can choose the appraiser, and it isn't someone the lender is familiar with, the results might be subject to review before they are accepted. The appraiser should be an objective third party with no financial or other connection to any person involved in the transaction. WHO PERFORMS THE APPRAISAL? WHAT YOU WILL SEE ON A RESIDENTIAL APPRAISAL REPORT Appraisals are very detailed reports, but here are a few things they include: Details about the subject property, along with side-by-side comparisons of three similar properties. An evaluation of the overall real estate market in the area. Statements about issues the appraiser feels are harmful to the property's value, such as poor access to the property.
Notations about seriously flawed characteristics, such as a crumbling foundation. An estimate of the average sales time for the property. The type of area the home is in (a development. stand-alone acreage, etc.).
RESIDENTIAL APPRAISAL METHODS
There are two common appraisal methods used for residential properties:
1. Sales Comparison Approach: The appraiser estimates a subject property's market value by comparing it to similar properties sold in the area. The properties used are called comparables or "comps." No two properties are exactly alike, so the appraiser must compare the comps to the subject property, making paperwork adjustments to the comps to make their features more in line with the subject property. The result is a figure that shows what each comp would have sold for if it had the same components as the subject. 2. Cost Approach: The cost approach is most useful for new properties where the building costs are known. The appraiser estimates how much it would cost to replace the structure if it were destroyed.
WHAT YOUR AGENT CAN DO FOR YOU TO HELP THE APPRAISAL PROCESS The best thing a homeowner broker can do to help the appraisal process is to prepare a one-page sheet for the appraiser that outlines the changes and repairs that the home has undergone since it was bought. WHAT THE APPRAISAL MEANS TO YOU As a seller, a low appraisal, if accurate, means you will have to lower your home's price to get it sold. Lenders will not approve loans for more than a home is worth, and holding out for an all-cash buyer who doesn't require an appraisal as a condition of completing the transaction is unlikely to net you a higher sales price. No one wants to overpay for a home. Unfortunately, recent distressed sales in the surrounding area can lower your home's appraisal value. If you feel that your home's value has been dragged down by the sales prices of nearby foreclosures and short sales, you may be able to convince the appraiser that your home is worth more if it is in significantly better condition than those properties. Sellers should also know that federal guidelines (intended to eliminate the inflated appraisal values that contributed to the housing crisis) sometimes cause appraisals to come in below fair market value and can make low appraisals difficult to challenge. When everything goes smoothly, the home appraisal is another box to tick on a loan-closing checklist. When the appraisal value is lower than expected, the transaction can be delayed or even canceled. Regardless of your situation in your homebuying, selling or refinancing experience, a basic understanding of how the appraisal process functions can only work in your favor.
QUICK FIXES
Quick fixes for improving the value of your home that your agent should have told you
1. Landscaping: Too much landscaping and you waste your money, but enough to create good curb appeal is well worth it. 2. Paint: Painting is relatively inexpensive and probably the No. 1 return on investment. It makes a great first impression for a buyer to enter a freshly painted home. Keep it neutral to appeal to the largest pool of buyers. 3. Wash Your Windows: This may seem insignificant, but it is an easy do-it- yourself project, is often overlooked and helps give your house that well- kept and maintained feel. You will likely be removing your screens to provide a cleaner look and allow more light in. Store the screens for the buyer's future use. 4. Update the Hardware throughout the House: An easy do-it-yourself project that will go a long way to improving the value of your home. 5. De-clutter and Remove Personal Items: This is a common recommendation of agents and stagers. Appraisers put themselves in the shoes of a typical buyer, which will go a long way with a buyer and the appraiser. 6. Bedrooms: Do you have as many as you think you have? The bedroom count has the most impact on value. Many homeowners convert two bedrooms to one, removing doors, windows and closets required for a room to be counted as a bedroom audits.
QUICK FIXES
6. Bedrooms: Do you have as many as you think you have? The bedroom count has the most impact on value. Many homeowners convert two bedrooms to one, removing doors, windows and closets required for a room to be counted as a bedroom. 7. Allowances: Rather than give an allowance, your seller will be better off replacing the carpet, painting the house, etc. The new carpet or new paint will draw more offers and generally result in higher offers than the offer with the allowance (taking into consideration the cost to complete the repair). Also, most lenders need to allow significant allowances, which could cause problems with appraisal and loan approval. 8. Driveways: Seriously damaged, cracked driveways will deter buyers. They also may create a safety hazard and be flagged by the home inspector and appraiser. While out of the seller's control, the driveway's slope must be considered, as FHA may not approve financing if the slope exceeds 14%. 9. Taxes and Utility Bills: Get your financial "house" in order. Buyers will look at many homes and compare tax and utility bills. Plan ahead, as tax bills can only be contested during a 45-day window each year (usually around March/April/May). Think about adding insulation, weather stripping and completing other energy-conserving projects, which will result in a series of lower utility bills at the time of listing. Most utility companies offer free home energy audits. 10. Closets: Most homes need more closet space. There are numerous options for closet organization systems to improve the value of your home.
The Inspection Process
THE BUYER'S RIGHT TO INSPECT
According to the Purchase and Sale Agreement, the buyer can have your home inspected by a professional before closing. The contract specifies when the inspection will occur after the offer is accepted and that the closing is contingent upon a satisfactory inspection in certain cases. The buyer pays for the inspection, and the seller is advised to be absent during the inspection. NOTE: As the seller, you can market your home "as is," but the buyer may still have the property inspected. A proactive approach to anticipating the inevitable will be time and money well spent. A pre-sale home inspection can identify potential issues and be a sales tool. A professional inspection report presented next to the disclosure helps inspire confidence in the potential buyer.
Identifying and correcting problem areas before the buyer's inspector finds them has some advantages. The repairs can be made at the seller's discretion and time frame instead of last-minute repairs scrutinized by the buyer. A pre-sale home inspection is part of the marketing costs of selling a home. The next best thing is staging the house for a home inspection. This is when the seller addresses common problem areas that an inspector will surely discover. Make these discoveries yourself and correct the issues proactively. SPECIAL NOTE: If you are selling a stucco home, you should have the stucco pre-inspected and have repairs, if any, completed before putting your home on the market. The buyer may elect to have a separate inspection of the condition of the stucco.
FREQUENTLY ASKED QUESTIONS
WHAT IS A HOME INSPECTION? A home inspection is a visual inspection of structures and components of a home to find items that are not performing correctly, unsafe items and items that violate the code at the time the house was built or remodeling occurred. If a defect or a symptom of a defect is found, the home inspector will include a description of the defect in a written report and may recommend further evaluation. Cosmetic issues should not appear on an inspection report. CAN THE BUYER ASK THE SELLER TO MAKE REPAIRS? The due diligence paragraph allows the buyer to give an amendment to the seller to "address concerns" with the property, which would be repaired. The buyer gives this amendment to the seller, and the parties can negotiate a satisfactory solution to the areas of concern. WHAT ARE THE TOP 10 HOME INSPECTION PROBLEMS? Gutters not draining properly Rotted wood around window fascia and soffit boards Water entry into the basement or crawl space Broken seals on double-pane windows Missing grout around tubs and shower stalls Heating and cooling equipment needing service Small nail holes (known as toe board nail holes) along the bottom edge of the roof
Creosote build-up in the flue pipe of the fireplace Faulty Ground Fault Circuit Interrupter (GFCI) outlets Windows painted shut
DO-IT-YOURSELF REPAIRS
The homeowner can handle many inspection issues. The items below are relatively common and are within the capabilities of most homeowners or handymen. Specialized professional help is suggested as needed. Allow a couple of hours to evaluate your home's visible components carefully. Try to look at the house like you are seeing it for the first time. Carefully scrutinize the interior and exterior of your home. Go up in the attic and down into the basement or crawl space. Inspect the garage. The average home inspection report will have 20-30 items. Most will be very minor and are often issues due to a lack of maintenance. SPECIAL NOTE: These issues represent a small sample of potential concerns that could show up on an inspection report. Every home is unique in its design, construction, materials and condition. THE EXTERIOR Cut back all vegetation approximately two feet from the house. Keep pine straw, bark, mulch and earth six inches from the bottom of the siding. Replace damaged siding, chimneys and areas around windows and doors. Use cement-based lap siding to replace. A thick coat of paint will fill the open cracks that develop in moisture-affected hardboard siding. Caulk or seal all gaps as needed. A good power wash can make a paint job look new, If the deck is nailed or screwed to the house, the inspector will suggest bolting for additional strength. Bolting with carriage bolts is simple if the interior walls are unfinished. Extensive lag screwing is the alternative if no access is available. Are deck handrails secure at all corners or wobbly? Are deck stair treads in good shape? Are deck guardrail pickets no more than four inches apart? Buyers will be concerned if this is on the report. Power wash and seal the deck with stain.
DO-IT-YOURSELF REPAIRS
THE EXTERIOR
Repair or replace wood rot in wood trim. Seal openings around penetrations in an exterior wall, and use spray foam around gas supply lines, AC refrigerant-condensate drain lines and exhaust vents. Test operation of garage door automatic openers, reverse sensors and the sensors located at the door tracks. Do garage door springs have safety cables running through them? This is a safety item. Cracks in brickwork? Patch missing mortar with matching mortar color. Remove dead trees from the property. Steel support columns on a deck or sunroom should be wire brushed for rust and repainted. Are dampers on bathroom exhaust vent hoods closing when not in use? Is the clothes dryer vent cleaned?
PLUMBING
Is the plumbing supply made of polybutene plastic? This can be blue or gray. Be prepared for possible negotiation on allowance to replace. Check for leaks under all sinks at the water supply and drain lines. Is there any noticeable corrosion on the water heater? Are shut-off valves accessible? Slow drains? Low water pressure? Check for clogged pipes. Grout/caulk that is missing at ceramic tile shower stall. Try to rock toilets sideways. If they rock, they need to be secured to the floor.
DO-IT-YOURSELF REPAIRS
THE HEATING AND AIR CONDITIONING SYSTEMS
Are exhaust flue connections secure and clearing combustible surfaces? Change dirty filters. Seal leaky ductwork with metal tape 181 UL. Professionally service older units. Are exterior AC units on the pad above grade? Is there water in the attic overflow pan? This indicates a problem.
THE ELECTRICAL SYSTEM
Any open junction boxes must be covered. Buy a $10 tester and check all receptacles. Check the electrical panel box for double taps, sloppy wiring and excessive splices. Service wire to kitchen sink disposal encased in protective conduit and properly clamped to disposal. Are all receptacles in wet areas Ground Fault Circuit protected?
THE INTERIOR
Seal and paint any inactive water stains in drywall ceilings and walls. Smoke detectors should have good batteries. Unstick all windows. Have fireplaces been cleaned and inspected recently? Check damper operation. Is the masonry fireplace liner in good condition? Is any mortar missing from the brickwork? Are bathrooms and dryer vents exhausted to the exterior?
DO-IT-YOURSELF REPAIRS
THE INTERIOR
Are stairway pickets four inches or less apart? Are there any water stains on the attic roof sheathing?
Look around ridge vents. plumbing vents, fascia boards, rafters, etc. Are there any cracked or damaged roof truss members or rafters? Attic framing (ridge beams, hip and valley ridge beams, rafters, etc.) should be properly braced. Does the exposed fiberglass insulation in the garage or basement have asbestos?
THE ROOF
Clean gutters, downspouts and roof valleys. Replace leaky gutters. Replace missing roof shingles. Extend downspouts away from the foundation. Check roof protrusions to see if there are any leaks in the attic. Clean all debris out of the attic.
CRAWL SPACE
Do any excessive standing water, gravel or drainage issues exist? Are there any rotten wood subfloor or joists around the bathroom/kitchen plumbing? Are vents to the exterior provided? Clean out debris. Is the plastic vapor barrier continuous?
WHAT SHOULD I KNOW ABOUT TERMITES?
In the state of Georgia, the seller is no longer responsible for presenting the buyer with a termite inspection letter stating the home's condition and whether or not it has been affected by termites. However, if the buyer chooses to do a home inspection, the inspector will reveal if there has been any damage in the past or present, and this can often be alarming to the prospective buyer. We highly recommend that both parties know the circumstances so the information is disclosed properly. How badly can termites hurt your home? Well, throughout the United States, they cause billions of dollars in destruction every year. They can destroy things ranging from wood, trees on your property, books, plants and even parts of swimming pools. Just by existing, they can prevent you from selling your home - no one is going to want to buy without getting rid of them first and assessing the extent of the damage. If you have termites in your home, the good news is that they can take quite a while before you see any real damage. In many cases, it takes up to five years or so before you see any signs of the problem. On the other hand, a healthy colony can consume an entire foot of a 2x4 in just a few months. That doesn't sound so bad, but the extent of the harm depends on how it's distributed in your house - the termites don't eat the entire board; they tunnel around in them. It is tough to tell precisely how much it will cost to repair it because it can vary.
CAN THE PROBLEMS BE REPAIRED? Yes. Sometimes, you can get away with reinforcing the damaged wood if it has not been hurt badly. You will have to have a professional look at it if you have had a colony for a while, though - all termites often eat away at load bearing wood, and you need to ensure that your home is still structurally sound. We strongly encourage the homeowner to have an annual contract with a qualified pest control company that is bonded for not only treatment. but treatment and repair. In addition, the Sentricon bait system can be a very effective way of preventing termites from ever coming near the structure of your home.
WHAT SHOULD I KNOW ABOUT MOLD?
FACTS ABOUT MOLD Molds are simple, microscopic organisms whose purpose in the ecosystem is to break down dead materials. Molds can be found on plants, dry leaves and almost every other organic material. Some molds are useful, such as those used to make antibiotics and cheese. Some molds are known to be highly toxic when ingested, such as the types that invade grains and peanuts. Most of the mold found indoors comes from outdoors.
Molds reproduce by very tiny particles called spores. The spores float in on the air currents and find a suitable growing spot. Spores are very light and can travel on air currents. If mold spores land on a suitable surface, they will begin to grow. Molds need three things to thrive - moisture, food and a surface to grow on. Molds can be seen throughout the house and can be found in most bathrooms. Mold growth can often be seen in discoloration and can appear in many colors - white, orange, pink, blue, green, black or brown. When molds are present in large quantities (called colonies), they can cause health problems in some people.
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