So you want to buy Outer Banks Real Estate. Good idea - the property values have dropped significantly since their peak in August of 2005. One thing many buyers don't consider - the appraisal.
The appraisal compares your property to like properties that have sold in the last six months.
There are three boxes on the first page of the appraisal that can have a significant impact on the borrower -One Unit Housing Trends. Here is an example of this small but important portion of the appraisal.
The box above shows the value in an acceptable range for lenders - Values are stable, Demand and Supply are in balance and Marketing Time is between 3-6 months. If the checks were leaning towards the left - the lenders would be happier but you would not see a break in rates. But the three boxes on the right makes everyone nervous.
If the lenders get nervous - it is going to cost someone (the buyer) money. Bottom line - each box on the right checked can increase the down payment minimums by 5%. Some lenders can also classify a County or Region as a slow market - so regardless of what the appraisal states, your down payment requirements can be higher.
Bottom line - your lender should explain this information to you up front - nobody likes a surprise at the last minute. If you have any questions, please feel free to contact me.
Thanks for pointing out this important information
I work strictly in commercial mortgages but find that the appraisal is not well understood by buyers or sellers. People tend to just look at the estimated value number and don’t seem to realize that there is a-lot more to it.
Glenn
http://www.masterplancapital.com/
Posted by: Glenn | May 10, 2008 at 12:05 AM