Welcome to Real Estate Trends #6 Newsletter. I've been really busy so this will be a quick one. It will be about Appaisals, Contingent Status and a New Listing. Enjoy.
The Home Did Not Appraise!!!
The appraisal report is one of the most important reports in a Real Estate transaction. Essentially, both buyer and lender want to make sure they are not paying more than the home is worth. With the Appraisal Contingency on the California Residential Purchase Agreement, it protects the buyer if the home is appraised below purchase price. For example, buyer and seller go into Escrow at $500,000. Buyer and lender order the appraisal and when they get the appraisal report, the value comes in at $480,000. Obviously, the buyer doesn't want to pay $500,000 anymore and the lender will not lend $500,000 to purchase a home that is worth $480,000. So what happens now?!? We go back to the negotiating table and tell the seller to reduce purchase price to $480,000. If the seller agrees, the deal continues. If the seller doesn't agree, the buyer "usually" cancels the deal. The reason I say "usually", in some rare cases, the buyer is willingly to pay the $20,000 difference out of Escrow.
Now if the home appraises for $525,000, the buyer still gets to buy the home at $500,000.
When searching for homes on websites (ex. www.paulcaparas.com
), some listings may have Contingent for their status. Contingent means the home has an offer submitted to the bank and are waiting for Approval. This status is for Short Sales since they take months to get Approved. You might ask "Does it mean the home is off the market?". Yes, it is off the market. If you are wondering why it is still showing up on websites since they are off the market, well we can not put it into Pending (in Escrow) until we get Short Sale Approval.
These homes showing up when you are doing a home search can be frustrating but when you do your search, just filter them out by doing a search with Active Status only.
Last week I listed a beautiful townhome in Scripps Ranch in the Triana complex. It has 3 bedrooms, 2.5 baths, 1,335 Sqft, 2 car garage and much more. If you know anyone who might be interested, please let me know.
Well that's it! Thanks for reading and as you know, I love referrals so if you know anyone interested in buying or selling, please refer me.