Short sales are a common way to help troubled homeowners avoid foreclosure. Basically, in a short sale, you sell your home for less than you owe on the mortgage and do not take nearly as large of a hit to your credit score. Lenders do not like having to approve short sales, but they would also much rather go through the short sale process than the foreclosure process, which can get very expensive in a hurry.
If you are planning to be involved in a short sale transaction as either a buyer or seller, you should be aware that the home will still need an appraisal. Here is some information to consider about real estate appraisals in Napa County, CA for short sale transactions:
- Appraisals for short sale approval: Homeowners who ask their lenders for approval for a short sale must craft a convincing argument to show the short sale is necessary. The lender will likely require the homeowner to provide an appraisal of the home’s value to show that what the house is worth is truly less than what the homeowner owes. Without an appraisal, you may find it hard to get approval for the short sale.
- Appraisals for short sale acceptance: Homebuyers also must submit extremely thorough purchase offers to have that offer accepted by the lender in the short sale process. The most effective purchase offers typically include appraisals or price opinions from a real estate broker. If you have both a broker price opinion (BPO) and an appraisal on the property, you should submit the lower of the two values for your purchase offer.
- Benefits for sellers: Lenders often have application processes that borrowers must adhere to in the short sale process. These lenders will typically require proof of financial hardship before they allow the short sale to go through. The appraisal provides the necessary evidence that the home is underwater, and will also help the seller to set a fair purchase price for the house. Without that appraisal, the seller is essentially left guessing about the best way to proceed.
- Benefits for buyers: Again, an appraisal will provide evidence that the home is underwater, which is just as important for the buyer as it is for the seller. You need to know exactly how far underwater that home is if you’re going to save as much money as possible in your purchase offer. If you need financing to purchase your short sale property, you’ll also need to have an appraisal done so your lender is comfortable providing you with the money you need to make the purchase. Ultimately, there are multiple benefits from the buyer’s side as well.
This is just a small amount of the information you’ll need to know about appraisals for your short sale process. In general, these appraisals work the same way as they would in a regular real estate transaction. To learn more about our real estate appraisals in Napa County, CA, contact County Appraisals Inc. today.
Categorised in: Real Estate Appraisals
This post was written by Writer