Whether you are buying or selling your home, using an appraisal company can help the process go smoother, and ensure that the home is being sold for a price that is fair for all of the parties involved. While appraisals are not always required by lenders, they are essential to successful real estate transactions.

An appraisal is the assessment of the value of a residential real estate property, and is accomplished by reviewing the characteristics of a home, as well as the value of similar homes in the same area. While many real estate agents use a Comparative Market Analysis (CMA) to arrive at a property’s selling price, don’t confuse a CMA with an appraisal. While experienced real estate agents can use a CMA to make a reasonably accurate value assessment, an appraisal report contains more detailed information to arrive at the correct market value of a home.

As a seller, you can use a pre-listing appraisal as a selling point when placing your home on the market. An appraisal report shows prospective buyers that you have priced your home based on verifiable third party information, rather than simply trying to get as much money as possible from the sale. It also helps discourage “low-ball” offers, and gives you leverage during price negotiations with a buyer.

 As a buyer, you can also request the appraisal of a prospective home before you submit a formal offer. You can then compare the information in the appraisal report to the asking price for the home, which will help ensure that you are not paying more than necessary for the property. This is very important if you absolutely fall in love with a home, because you have objective information to help keep you from being tempted to pay a high asking price simply because you have become emotionally attached to a house.

Having a potential home appraised also gives you leverage to negotiate a lower price or better terms. If a seller’s asking price is higher than the home’s appraised value, you can ask for a lower price, or request that the seller pay for your closing costs, home inspection fees, or other expenses.  

Also, if the asking price is much lower than the appraised value, this is a sign that you should thoroughly research the property before you buy.  It could be that there is an issue with the home itself or could mean that the owner has a personal reason for trying to get it sold quickly- either way, protect yourself by getting all the information you can make an informed decision on how to proceed.

So you’ve decided the time has come to purchase a home. With the real estate market in decline, this can be an opportune time to purchase a property at a price well below market value. However, you will still need to make sure your credit is in order, so you can obtain a home at the best rate possible.

Your credit score will determine whether you can qualify to purchase a home, and will have a substantial impact on the interest rate you can obtain for a mortgage loan. A low credit score may mean that you will be charged high a interest rate on your loan, and in some circumstances, it may even disqualify you from buying a house altogether.

Before you even begin shopping for a home, it is a good idea to obtain your credit report from the three main reporting agencies: Experian; Equifax; and TransUnion. Lenders may use one or all of these agencies when determining if you qualify for a loan, so it’s important to know what information is being provided by all three agencies.

You will also want to obtain your credit score from all three agencies. This score is not always included with credit reports, so you may have to purchase this information separately. Credit scores range from 300 to 800 – generally, mortgage lenders will want to see a minimum score of 650 before they will consider a loan applicant; most prefer a score of 700 or above.

If your credit score is lower than you expected, look through your credit reports for negative items, such as late payments and charge offs. If any of these items are present, make sure that they are accurate. If not, you will need to contact the reporting agencies to file explanations stating that these items are inaccurate.

If the negative items are accurate, only time and diligence will raise your credit score. In some cases, if an extraordinary event caused you to be late on credit card or installment loan payments, the lender will accept a letter of explanation detailing why these negative events occurred. However, this is the exception rather than the rule, so don’t expect the lender to be terribly willing to accept such an explanation.

Barring an explanation letter, you will simply need to re-establish a positive credit history to raise your credit score. The older a negative item is, the less it will impact your score, so paying bills on time and keeping loans current will help you raise your score relatively quickly.

If possible, you should wait until you have raised your credit score before you seriously begin looking for a home to purchase. Although there are lenders that will provide mortgage loans to applicants with poor credit, they will charge substantially higher interest rates, which can cost you thousands of dollars over the life of the loan.

If you are planning to purchase a home, it is crucial to prepare by getting your finances in order. Many prospective home buyers fail to properly plan for buying a home, which can cost them thousands of dollars in higher interest rates. In some cases, buyers are even unable to purchase a property because they have not taken the necessary steps to secure their financial positions.

Before you even contact a real estate agent to start looking at homes, obtain your credit report from each of the three major credit reporting agencies – TransUnion, Experian, and Equifax. Not all creditors report the same information to all three agencies, so it is important to obtain all three reports. Review the information contained in each report for accuracy. If there are inaccurate items, contact the agencies to find out how to have them removed.

Also, get your credit score from each agency. This score will determine the interest rate you qualify for, and can even determine whether you are able to purchase a home at all. Ideally, your credit score should be above 700 – a lower score can cost you thousands of dollars in higher interest rates over the life of the loan. If your score is below 650, some lenders will not be able to offer you a mortgage loan.

Another item you should consider is your savings. Some lenders will require that you make a down payment of at least three percent of the purchase price; others will require an even larger down payment. In addition, you will need funds for inspection fees, moving costs, and other expenses.

Finally, you should be able to provide your lender with evidence of your employment or earnings history. If you work for someone else, obtain copies of your W2 forms for the past three years. If you are self employed, gather your 1099 tax forms – your lender will use these to establish your stable income history. Also, don’t change jobs just before purchasing a home – most lenders will want you to have been working for your present employer for at least a year before requesting a mortgage loan.

Gathering these pieces of information before you begin the home buying process will help you qualify for a home mortgage, and will help you obtain the best interest rate and terms possible.

When you decide to sell your home, you should make a list of the things you will need to do to get your property ready to put on the market. Many home sellers concentrate on interior repairs and upgrades, but you should also consider the home’s curb appeal when preparing your home for sale. In many cases, poor curb appeal will significantly hamper your ability to sell, no matter how beautiful the inside of your home may be.

Curb appeal dictates a potential buyer’s opinion about your home from the moment her or she pulls into the driveway. This first impression will linger in the buyer’s mind, even as he or she tours your home. Fortunately, there are several easy and inexpensive ways to enhance your home’s curb appeal, so potential buyers will have a positive impression to carry with them as through their tour.

First, make sure that the exterior of the home is clean and in good repair. Repair or replace any damaged siding, and have the exterior powerwashed before you put it on the market. If you home has aluminum siding or a stucco exterior, consider having the home painted to give it a clean, inviting look. You might also consider having doors and window sills painted to enhance your home’s appearance.

Tend to your home’s landscaping, making sure that your lawn is freshly trimmed, flower beds are weeded, and shrubs and trees are properly cared for. If there are trees or large plants that block the view of your home from the street, consider trimming them or having them removed. Bright, well-maintained flowers will also add to your home’s curb appeal.

Make sure that your sidewalks and driveway are in good repair. There should be no visible cracks, breakage, or obstructions – these will give buyers the impression that your home is in a state of disrepair.

Finally, make sure that there are no personal items on your porch or in your yard. Bicycles, children’s toys, gardening tools, and other items should be properly stored out of sight to prevent a cluttered appearance.

These simple items may take a bit of extra work, but enhancing your home’s curb appeal can work wonders when it comes to making your home attractive to potential buyers.