What Do Idaho Appraisers Look For When Determining A Property’s Value?

Most people are surprised to learn what Idaho appraisers actually look at when determining the value of a real estate property.

 

A common misconception Boise Idaho homeowners generally have is that the value of their home is determined after the appraiser has completed their physical property inspection.

 

However, the appraiser actually already has a good idea of the property’s value by the time they have scheduled an appointment to stop by the property.

 

The good news is that you don’t have to worry so much about pushing back an appointment a few days just to “clean things up” in order to help influence the value of your property.

 

While a clean house will certainly make it easier for the appraiser to notice improvements, the only time you should be concerned about “clutter” is if it is damaging to the dwelling.

The Key Components Addressed In An Appraisal

 

The Site:

Location, view, topography, lot size, utilities, zoning, external factors, highest and best use, landscaping features…

 

Design:

Quality of construction, finish work, fixed appliances and any defining features

 

Condition:

Age, deterioration, renovations, upgrades, added features

 

Health & Safety:

Structural integrity, code compliance

 

Size:

Above grade and below grade improvements

 

Neighborhood:

Is the property conforming to the neighborhood?

 

Functional Utility:

Is the property functional as built – style and use?

 

Parking:

Garages, Carports, Shops, etc..

 

Other:

Curb appeal, lot size, & conforming to the neighborhood are obvious to the appraiser when they drive down into the neighborhood pull up in front of your home.

When entering your home, they are going to look at the overall design, condition, finish work, upgrades, any defining features, functional utility, square footage, number of rooms and health and safety items.

Be sure to have all carbon monoxide and smoke detectors in working condition.

 

Since the appraisal provides half the weight in any credit decision involving the security of real estate, the appraisal should be done by a qualified, licensed appraiser whom is familiar with your neighborhood, and the type of home you are buying, selling or refinancing.

 

If you’re interested in what specifically appraisers are looking for, here is a copy of the blank 1040 URAR form that is used by every appraiser in the country.

 

Related Update on HVCC:

 

Appraisers hired for a mortgage transaction on a conforming loan are chosen from a pool of qualified appraisers at random. Neither you nor your lender has the flexibility of deciding which appraiser will inspect your home.

 

This recent change was brought on with the Home Valuation Code of Conduct HVCC, and is effective with conventional loans originated on or after May 1, 2009.

 

If you have any questions about the article above please feel free to contact us.

 

Rick & RickandJaneheadshotJane May
Mann Mortgage
Branch Manager/Owners
Direct: 208-861-0000
mannmortgagemeridian@gmail.com
ID MBL-2550 / NMLS # 173614/12870
www.idahohomegroup.com

 

 

_________________________________

Related Appraisal Articles:

Top 10 Boise Idaho Reverse Mortgage Links/Articles/Questions

1. How Does the Idaho HECM Reverse Mortgage Loan Work?
2. Idaho FHA Reverse Mortgage
3. What Is a HECM Loan ?
4. Idaho FHA Reverse Mortgage Home Loans For Seniors
5. Common Idaho FHA (HECM) Reverse Mortgage Frequently Asked Questions
6. Jumbo Mortgage Financing for Boise, Idaho Properties
7. Conventional Home Loans For Boise Idaho Borrowers
8. VA Mortgage Loans in Boise Idaho
9. Boise Idaho Reverse Mortgage Senior Loans
10. FHA Mortgage Loans in Boise Idaho

Where Does My Earnest Money Go When Purchasing Boise Idaho Real Estate?

Hey, I gave my Boise Idaho real estate agent a $5000 Earnest Money Deposit check… Where does that money go?

 

A basic and very obvious question that most Idaho First-Time home Buyers ask once their purchase contract gets accepted.

 

According to Wikipedia:

Earnest Money – an earnest payment (sometimes called earnest money or simply earnest, or alternatively a good-faith deposit) is a deposit towards the purchase of real estate or publicly tendered government contract made by a buyer or registered contractor to demonstrate that he/she is serious (earnest) about wanting to complete the purchase.

When a buyer makes an offer to buy residential real estate, he/she generally signs a contract and pays a sum acceptable to the seller by way of earnest money. The amount varies enormously, depending upon local custom and the state of the local market at the time of contract negotiations.

 

An Earnest Money Deposit (EMD) is simply held by a third-party escrow company according to the terms of the executed purchase contract.

 

For example, there may be a contingency period for appraisal, loan approval, property inspection or approval of HOA documents.

 

In most cases, the Earnest Money held by the escrow company is credited towards the home buyer’s down payment and/or closing costs.

 

*It’s important to keep in mind that the EMD may actually be cashed at the time escrow is opened, so make sure your funds are from the proper sources.

 

The Process:

  1. Earnest Money is submitted to an escrow company with the accepted purchase contract
  2. At the close of escrow, the EMD is credited towards the down payment and / or closing costs
  3. If there are no closing costs or down payment, the EMD is refunded back to the buyer

 

Who Doesn’t Get Your Earnest Money:

  • Selling Real Estate Agent – A conflict of interest
  • Sellers – Too risky
  • Buying Agent – They shouldn’t have your money in their account

 

If you have any questions about the above article please feel free to contact us.

 

Rick & RickandJaneheadshotJane May
Mann Mortgage
Branch Manager/Owners
Direct: 208-861-0000
mannmortgagemeridian@gmail.com
ID MBL-2550 / NMLS # 173614/12870
www.idahohomegroup.com

 

 

_________________________________

Related Articles – Closing Process / Costs

Top 10 Boise Idaho First Time Home Buyer Mortgage Links/Articles/Questions

1. 3 Great Idaho First-Time Home Buyer Loans
2. Idaho Housing and Finance Association Zero Down 100% Financing for First-Time Home Buyers
3. Idaho USDA Rural Development (RD) Zero Down 100% Financing First Time Home Buyer Loan
4. Idaho VA 100% Home Financing Loans
5. Idaho First-Time Home Buyer Frequently Asked Questions
6. Jumbo Mortgage Financing for Boise, Idaho Properties
7. Conventional Home Loans For Boise Idaho Borrowers
8. VA Mortgage Loans in Boise Idaho
9. Boise Idaho Reverse Mortgage Senior Loans
10. FHA Mortgage Loans in Boise Idaho

Renting vs Buying A Home In Boise Idaho

Buying a home in Boise Idaho versus renting is a big decision that takes careful consideration.

While there are several biased sources that can make arguments for or against owning a home, we’ve found that most home buyers base their ultimate decision on emotion.

Yes, there are some tax advantages of owning real estate, as well as the potential to earn equity or pay a mortgage note off after several years.

However, let’s address some of the more obvious topics of discussion first.

Benefits Of Renting:

 

Lower Acquisition Cost –

Unless you’re able to qualify for a mortgage loan with zero down and have your closing costs paid for by the seller, a typical investment to purchase a home is around 3.5% – 7% of the purchase price for down payment and closing costs on an FHA mortgage, and an average of 13% – 23% for a home secured by conventional financing.

Compared to the cost of about 1-3 month’s rent payment, it’s obvious that renting a home makes financial sense in the short-term.

 

Lower Qualifying Standards –

While the FHA and other government insured mortgage programs have more flexible credit / qualifying guidelines than most traditional home loan programs, there is certainly a lot less paperwork and personally invasive probing required by most landlords and property management companies.

Generally proof of employment / income and a decent credit history (or a good explanation) is needed to rent a home.

 

Freedom To Move –

It’s easy to find a home through a reputable property management company, move in that weekend and then leave a year later when the rental contract expires.  Not being tied down by a long-term mortgage liability is ideal for people new to a community, in a career that keeps them on the go or for parents with children that prefer a certain school district.

Plus, if you’re planning on moving in the next 3-5 years, then it may become cost-prohibitive due to the amount of equity you’ll have to gain in the short-run just to cover the cost of paying an agent, buyer closing costs, transfer taxes…. so that you can at least break even at closing.

 

Less Maintenance and Cost –

If something breaks, a simple call to the property management company will generally solve the issue in 48 hours or less.  Plus, renters don’t have to carry expensive homeowners insurance, pay property taxes or worry about interest rates adjusting.

Benefits of Owning:

 

Pets Are Allowed –

Well, according to the rules and regulations of your county or neighborhood HOA, you can pretty much have as many domestic and exotic pets without having to pay extra deposits.

It may seem like a funny benefit to mention first, but the millions of dog and cat lovers would definitely rank this towards the top of their list.

 

Pink and Purple Walls –

Yep, you can paint the inside of your house any color you choose. Depending on whether or not there is an HOA in place, you could probably do the same thing on the home’s exterior.  Landscaping, flooring, built-in shelving… it’s your property to renovate and rehab to your liking.

 

Peace-of-Mind and Security –

The only way you would be forced to move is if the bank forecloses on your property due to a default in mortgage payments.

So basically, you don’t have to worry about a landlord’s financial ability to make mortgage payments on time. Plus, you can stay in your own property as long as you wish.

 

Tax Benefits -

The US government has created certain tax incentives making it possible for many homeowners to exceed the standard yearly deduction.

*Disclosure – Check with your CPA or Tax Attorney to verify your own unique filing scenario*

The following three components of your home mortgage may be tax deductible:

a) Interest on your home mortgage
b) Property Taxes
c) Origination / Discount Points

 

Stability -

Remaining in one neighborhood for several years lets you and your family establish lasting friendships, as well as offers your children the benefit of educational continuity.

 

Appreciation of Property -

Historically, even with other periods of declining value, home prices have exceeded consumer inflation. From 1972 through 2005, home prices increased on average 6.5%, according to the National Association of Realtors®.

 

Forced Saving -

The monthly payment helps in repayment of the principal amount. Also when you sell you can generally take up to $250,000 ($500,000 for married couple) as gain without owing any federal income tax.

*Disclosure – Check with your CPA or Tax Attorney to verify your own unique filing scenario*

 

Increased Net Worth

Few things have a greater impact on net worth than owning a home. In a comparison of renters versus homeowners, the Federal Reserve Board of Consumer Finance found that the average net worth of renters was just $4,000 compared to homeowners at $184,400.

 

While the available tax advantages and potential for earned equity are generally highlighted by most industry professionals as the top reasons to own real estate, it’s important to remember that markets go through cycles.

 

However, owning real estate that appreciates more than the rate of inflation may help contribute towards your overall investment portfolio, provided your maintenance and mortgage costs are kept low.

 

Rick & RickandJaneheadshotJane May
Mann Mortgage
Branch Manager/Owners
Direct: 208-861-0000
mannmortgagemeridian@gmail.com
ID MBL-2550 / NMLS # 173614/12870
www.idahohomegroup.com

_________________________________

Related Articles – Home Buying Process:

Top 10 Boise Idaho First Time Home Buyer Mortgage Links/Articles/Questions

1. 3 Great Idaho First-Time Home Buyer Loans
2. Idaho Housing and Finance Association Zero Down 100% Financing for First-Time Home Buyers
3. Idaho USDA Rural Development (RD) Zero Down 100% Financing First Time Home Buyer Loan
4. Idaho VA 100% Home Financing Loans
5. Idaho First-Time Home Buyer Frequently Asked Questions
6. Jumbo Mortgage Financing for Boise, Idaho Properties
7. Conventional Home Loans For Boise Idaho Borrowers
8. VA Mortgage Loans in Boise Idaho
9. Boise Idaho Reverse Mortgage Senior Loans
10. FHA Mortgage Loans in Boise Idaho

What Does My Idaho Title Insurance Protect Me From?

 

By including Idaho title insurance when purchasing property, your title insurer takes on accountability for legal expenses to defend your property title, should it ever be challenged.

 

Many different occurrences can come into play to warrant the need for title insurance.

 

The title company responsible will then take on the legal expenses to defend the property for as long as you are in possession of an interest in the property under the title.

 

If the defense is not successful, you will be reimbursed for any loss of value of the property.

Common Things Title Insurance Covers:

1. UNDISCLOSED HEIRS, FORGED DEEDS, MORTGAGE, WILLS, RELEASES AND OTHER DOCUMENTS

2. FALSE IMPRISONMENT OF THE TRUE LAND OWNER

3. DEEDS BY MINORS

4. DOCUMENTS EXECUTED BY A REVOKED OR EXPIRED POWER OF ATTORNEY

5. PROBATE MATTERS

6. FRAUD

7. DEEDS AND WILLS BY PERSON OF UNSOUND MIND

8. CONVEYANCES BY UNDISCLOSED DIVORCED SPOUSES

9. RIGHTS OF DIVORCED PARTIES

10. ADVERSE POSSESSION

11. DEFECTIVE ACKNOWLEDGEMENTS DUE TO IMPROPER OR EXPIRED NOTARIZATION

12. FORFEITURES OF REAL PROPERTY DUE TO CRIMINAL ACTS

13. MISTAKES AND OMISSIONS RESULTING IN IMPROPER ABSTRACTING

14. ERRORS IN TAX RECORDS

If you have any questions about this article please feel free to contact us.

Rick & RickandJaneheadshotJane May
Mann Mortgage
Branch Manager/Owners
Direct: 208-861-0000
mannmortgagemeridian@gmail.com
ID MBL-2550 / NMLS # 173614/12870
www.idahohomegroup.com

 

 

_________________________________

Related Articles – Closing Process / Costs

Top 10 Boise Idaho Mortgage Links/Articles/Questions

1. Idaho VA 100% Home Financing Loans for Boise and Mountain Home areas
2. How do I obtain an Idaho 100% VA Home Loan?
3. Idaho FHA And VA Manufactured Loan Programs For Refinancing And Purchasing Homes
4. Idaho VA 100% Home Financing Frequently Asked Questions
5. Idaho FHA Reverse Mortgage
6. Jumbo Mortgage Financing for Boise, Idaho Properties
7. Conventional Home Loans For Boise Idaho Borrowers
8. VA Mortgage Loans in Boise Idaho
9. Boise Idaho Reverse Mortgage Senior Loans
10. FHA Mortgage Loans in Boise Idaho