Tag Archives: buying a home

The Appraisal Gap

We’ve been hearing a lot about the Appraisal Gap lately and how buyers have been using it to win in multiple offer situations but what is it and what does it mean?

The appraisal gap comes into play when the home appraises at a lower value than your offer price. When this happens in a normal situation you have options. You can pay the difference in cash between the appraised value and your offer or you can try to renegotiate a lower price with the seller. The first option assumes you have the cash to make this work and keep it together. The second option requires a seller who is willing to negotiate.

If the seller is not willing to negotiate you can request a second appraisal, which does come with an additional cost. The downside to this is that all parties need to agree because it may delay the transaction and the close date. If the parties don’t agree the transaction is cancelled due to the appraisal contingency clause.

If you have included an appraisal gap clause with your offer, you would automatically adjust the sales price and move forward. The appraisal gap clause was popular for sellers because it came with less risk of the deal falling apart and the seller having to go back on the market.

Using the appraisal gap is not always an option for buyers and some just simply don’t like the idea of paying more for the house than what it appraises for. This is why it’s important in a real estate transaction to understand all your options and what they mean for you.

5 Things to Know Before Buying a New Home

Buying a new home is a big decision. After all it’s one of the largest purchases you will make. So before you jump in with both feet, pause and do your research, it’s important to understand these 5 things before you start.

  1. Know your credit score. Your credit score will be the deciding factor in whether or not you get approved for a loan. Your score will also effect the terms of the loan. The better the score, the better the terms.
  2. Know your expenses. There are a lot of extra expenses that go into buying and owning a home. A few things to think about: How much do you need to put down? How much are closing costs? (Both these costs will fluctuate depending on how much you’re planning to spend.) How much does it cost to have a home inspected? And we’re just getting started. Have you stopped to consider how much it will cost to hire movers?
  3. Know how much you want to spend. Even if you have a large nest egg saved for the down payment and the expenses you will incur when buying a home do you know how much of your paycheck you want to spend on your payment every month? If you have good credit banks may approve you for more than you are willing to spend.
  4. Know (or at least consider) your future. If you’re a likely candidate to get transferred in the next year now may not be the time to buy a house. A rule of thumb is that you will want to stay in your home for at least two years. That should give you enough time to recoup your expenses and sell without taking a loss. There are also tax benefits to staying a minimum of two years.
  5. Know what you want. Do you want a condo, a townhome or a single family home? If you want a condo or a townhome have you thought about the association fees? Do you want a fixer upper? Is a yard important? Do you know anything about the neighborhood? Or where you want to live?

Knowing these 5 things before buying a new home will make the process much smoother and you’ll be happier and more confident in your home buying decision.

Buying a Home

So you’ve decided to buy a home, congratulations! We believe you’ve made the right decision. The key now is finding the right home, and we’re here to help you do just that.  But before we begin we believe that the following information will help keep this process manageable and as stress free as possible.

Secure Financing

This is an important step in the home buying process and needs to be done before you do anything else. With a pre-approval status, you’ll be able to seriously look at homes within your price range and be ready to make a legitimate offer.

Find Your Home

There are a lot of homes out there, we’ll help you more accurately pinpoint homes that fit your criteria. When you find a home you like, call us, we’ll set up a showing and walk you through the home.

Make an Offer

Once a property has been selected, a purchase agreement is written. We present the offer with your pre-approval letter and earnest money check and start negotiations.

Get your Home Inspected

Once you’ve made an offer and the seller has accepted your purchase agreement, it’s common to get a home inspection.  A home inspection is a good way for you to get an understanding of the overall condition of the home.  Most purchase agreements are written to make the purchase agreement’s final acceptance contingent upon the results of a home inspection.


Most lenders require a professional appraisal to determine the value of the property before they will approve a loan.  Since the home you’re financing is collateral for the loan, the lender won’t want to loan you more money than the property is worth.  The lender orders the appraisal shortly after the buyer and seller accept the purchase agreement.  At this time you will be asked to pay for the appraisal.

Final Approval of Loan

After receipt of appraisal and title work, the lender submits the complete file to the Underwriting Department for final approval.  Once they receive final approval, the lender provides the homebuyer with the final figures and upcoming closing final checklist.  The loan “closing package” is created and is sent by courier to the title insurance/closing company.

Final Walk Through

Before you close on your new home it’s common to take a walk through of the property to assure them that the property is in the same condition as when we wrote the purchase agreement. This is generally done 1 to 2 days before closing.


The buyer and seller meet at the buyer’s title insurance/closing company. This is where the deed is transferred, final loan application is signed and checks are disbursed.  You typically take possession of the property, possession can be immediately or 24-48 hours after closing, depending on the terms of the purchase agreement.