The real value of your home

By Doherty • February 6th, 2011

Image by brykmantra via Flickr

Texas equity laws are more restrictive than many other states, so it is important that Texas residents are familiar with them.

If you have ever taken any cash out of your home’s equity, or plan to do so, you are limited to borrowing only 80% of the home’s value for as long as you own the home. In fact, many lenders require a copy of the closing statements from previous loans to see if cash has been taken out in the past. Because of Texas equity laws, borrowers tend to have less wiggle room if a formal appraisal comes in lower than expected.

What to look for in a fair appraisal of your Flower Mound TX home :

  • “Sold” homes, not homes still for sale. When you are looking for comparable properties and their associated value, you must only consider those properties that have sold, not homes that are still on the market for sale. The values of sold homes are considered validated by both a bank’s willingness to back a mortgage and a buyer’s willingness to pay the negotiated price.
  • Similar Neighborhood. Homes are not considered ‘comparable’ just because they are in the same neighborhood. Design, improvements, and location all play a part in determining if a house is ‘similar’ or not.
  • Unique Property: If your house has a distinct or uncommon design, such as an A-frame or ultra modern style, while the surrounding homes are designed more traditionally, then the surrounding homes cannot be considered comparable. In this case, it may be more difficult to establish a reasonable value for your home, requiring more sophisticated assessments and calculations.
  • Recent Sales: Most lenders base their assessments on home sales that are no more than six months old, so try to find comparable properties that have sold within that timeframe. Some lenders may allow the use of older sales for unique properties or circumstances, but then additional loan restrictions may apply.

When it comes down to finding solid comparable properties in which to compare yours, you can start by calling the appraiser who appraised the property when you bought it or the one who performed a more recent appraisal. This professional is more likely to know the specifics and the value of your home and can possibly give you a more realistic figure in regards to appreciation or depreciation. The appraiser may still have the details of your appraisal, which could potentially lead to a quicker turn-around.

If you are still on the starting block, Jeff Brand, a local Flower Mound Realtor, can provide a Comparable Market Analysis (CMA) of your home as a complimentary, no-obligation service offering.

One final note: if you’ve decided to purchase a home and you have selected a mortgage lender, it is best to inquire about the lender’s appraisal process before ordering any appraisal on your own. With recent changes in the mortgage industry, most lenders are randomly assigned approved appraisers and may not be able to use an unauthorized appraisal.

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