The mortgage world has changed. Just as buyers have discovered new hoops to jump through, Sellers are also finding that their properties are under greater scrutiny. Making your property match lender expectations can help increase your pool of potential buyers and ultimately ensure that your home sells for the highest amount possible.
The following checklist is Courtesy of Monica C. Di Perna, Guarantee Mortgage, NMLS #116494/DRE #01244107
A. Ready the Property for an Appraisal (Eyes of the Lender)
- Chipped paint must be repaired
- Roof or other useful component/mechanical system (appliance etc.) must have 2 years useful life
- No Broken windows/No sign of mold (An appraiser can suspect it and state a suspicion on the appraisal)
- Health and Safety Hazards will be disclosed
- Large holes must be repaired
- Safety rails where needed
- Inoperable Plumbing must be repaired
- Structural/Foundation problems must be repaired (many 100 year old homes still have existing foundation-big red flag)
- Water Heaters
- Any sign of water damage/stains will be addressed
- If appraiser suspects termite infestation, lender can require Termite Inspection and Termite Clearance of Section 1 items.
B. Permit History:
- Any additions need permits or will not count as value
- List of recent improvements from owner so you can match up permits
- Pull the list of permits if client doesn’t have them to make sure they match improvements
- Special Agreements with Neighbor that may not show up
- Best place to go is City’s building & Planning Department. Permits and Property conditions can be viewed online for the City of Berkeley.
C. How does an appraiser determine Value for Lending Purposes? Price Vs. Lender Valuea.
- Sales within past 90 days
- No more than 20% difference in square footage/parcel size
- No more than 1 mile in urban area and 5 miles away in rural market
*****Always have ready to give to Appraiser: List of improvements, permits, special agreements, and Condo Packet (CCR’s, Budget, Bylaws, Articles, Master Insurance Policy, HOA Cert)