Why aren't all properties appraised before being listed?

Question:
I'm just starting to look for my first home and am amazed that more sellers don't have appraisals done before placing the property on the market. If there is an appraisal, can't I request that the real estate agent ask the seller to show it to me before I make an offer?

Answer:
You're correct---many sellers don't secure an appraisal before placing the home on the market. This doesn't mean, however, that they don't have an idea of the property's market value. They may have secured a comparative market
analysis from an agent, showing a range of value, anticipated marketing time, as well as types of terms which can be expected for the property. Most houses do not require a presale appraisal unless the property is so unusual that no comparable properties are available.

An appraisal may actually be a detriment to the marketability of the property. What happens if the appraiser has few comparables to use in his appraisal, causing the appraisal to come in unrealistically low? What if the seller secures an appraisal suitable for a conventional loan, only to find that the property later sells with FHA terms, requiring another appraisal?

If an appraisal has been done, the buyer can certainly ask to see it, just as the seller can deny the request. If the seller orders the appraisal, it is considered to be his confidential information. If the real estate agent is working for the seller and is aware of the appraised value, he or she would need permission from the seller to share that information with anyone else.

If you have reservations about the value, why not make the receipt of a satisfactory appraisal part of the terms of your offer to purchase? If you're seeking lender financing, a property appraisal is usually part of the loan package.

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How can I find "Nothing Down" properties?

Question:
I recently attended a real estate seminar where the speaker said you could still purchase property with no money down. How do I find out about these properties?--M.A.

Answer:
There are always some properties that people are willing to part with for little or no money down. But your first question if you do find one should be "why"? Many times the property is a problem property with delinquent loan payments, title problems, or an income property in a bad neighborhood. In other words, what you save in down payment may more than cost you in trouble!

Some relatively safe sources of low or no down payment properties include people who offer lease option and lease purchase terms in their ads, sellers who must make a quick transfer to another locale, and red flags such as "take over payments", "must save my credit", or "use sweat equity to purchase". Additionally, properties purchased during times of high interest rates which have seen little or no appreciation may be a good target since sellers desire to get out from under the burden of a high payment.

As with any property purchase, don't forego a thorough title insurance search just to save money. A highly-leveraged, distressed property may have more than its share of liens and title glitches.

Where can I find information about environmental hazards?

Question:
There is so much in the news these days about environmental hazards, like radon. How can a homebuyer be alerted to these and what is the best source for finding information?

Answer:
Environmental issues do pose a concern (sometimes a dangerous and expensive one) where home buying is concerned. One of the best publications I've found is called "A Home Buyer's Guide to Environmental Hazards," and was developed by the U.S. Environmental Protection Agency to aid the housing and finance industries. It does an excellent job of helping home buyers uncover possible hazards, and understand the health consequences of exposure to asbestos and radon.

To obtain a copy of the free brochure, write to: The Federal National Mortgage Association, Department E., P.O. Box 23867, Baltimore, MD, 21201-9998.

All information provided is deemed reliable but is not guaranteed and should be independently verified. For more Information or if you have any comments about this service.