Understanding the process of marketing a home in North Little Rock is the first major step to selling your property. Among the many steps to selling a house in Arkansas is the process of inspections and appraisals. Inspections and appraisals determine the condition and value of your home to ensure your property is listed at the right price and there is no need for repairs.
While property inspections and appraisals are often thought of as interchangeable terms, there are some key differences that set these two forms of home examination apart. Home inspections evaluate the property’s condition and bring to light any damages the buyer should know about. Property appraisals, on the other hand, determine the home’s value to aid you in selecting a price that is fair and appropriate. Both property inspections and home appraisals are essential for selling your house fast in North Little Rock.
Because real estate transactions can be somewhat challenging for home sellers, it is necessary to understand the process of inspections and appraisals in North Little Rock. Today, we’ll uncover the facts about inspections and appraisals to help you confidently sell your home in Arkansas.
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Inspections and Appraisals Are Part of Contract Contingencies
The first thing for home sellers to understand is that inspections and appraisals are an essential part of traditional real estate contracts. Real estate contracts will likely have an inspection contingency or due diligence contingency to provide protection for the buyers, who are given a specific time period for property inspections to be completed.
If the property in North Little Rock happens to have issues, the options for the buyer and seller are carefully laid out in the contract. While the outcome greatly depends on how the contingency clause was written, it may likely result in delayed closing dates or even broken deals. Without a contingency clause in place, a buyer who decides not to complete the purchase may lose an earnest money deposit during such an experience.
Inspections and Appraisals May Lead to Costly Repairs
Home sellers should understand that upon receiving the report on inspections and appraisals, a number of damages may need to be repaired before closing the deal with a buyer. While appraisals may help to reveal the shape your house is in, home inspections are the primary source for determining a property’s condition. A property inspector will evaluate your home both inside and out, focusing on the house’s structure and systems. After inspecting your property, an inspector will prepare a report which will be presented to the buyers.
Home sellers that received a positive report have little to worry about for selling their property in a timely manner. Properties with a negative report, however, may create a number of challenges for both the seller and the buyer. Buyers may request a time period for a second inspection to be done, causing you to lose valuable time in selling your house. In some cases, a buyer may ask for a deduction on the price or for the seller to pay the cost for the repairs.
Depending on the condition of your home, repair expenses may cost several thousands of dollars, creating a deep financial debt for the seller. Additionally, hanging on to the property longer than expected can interfere with your plans for moving forward in life. Because it’s important to take home inspections and appraisals seriously, it is wise to hire three professionals for estimates on your property’s value and the timeline for completion of repairs.
Inspections and Appraisals Determine Home Value
The purpose of inspections and appraisals is to determine your property’s value and bring to light any damages that may affect your house’s overall worth. The appraisal especially focuses on your property’s features as compared to properties recently sold in the neighborhood. Basically, appraisers will compare your home to similar properties in the area and either add or subtract value for your property, depending on whether your house has more or fewer features than comparable properties. For instance, a one-car garage will decrease a property’s value if comparable properties all have two-car garages.
Inspections and appraisals are necessary to mortgage lenders, as it allows them to meet the loan-to-value (LTV) ratio. The loan-to-value ratio divides the mortgage amount by the appraised value as given by the report from the appraiser. The lower the resulting number is, the lower the risk is on the loan. On the contrary, a higher number may require mortgage insurance to be purchased before finalizing the deal.
Inspections and Repairs May Result in Lost Deals
Because inspections and appraisals play such a significant role in home selling, failing to understand the process can result in lost deals and deep financial expenses. After having inspections and appraisals completed, buyers may find that your house’s condition isn’t worth what they originally thought it was. Moreover, home sellers may experience lost deals due to rejected loans by the lender.
If the inspections and appraisals revealed any damages to the house, you may find the money for repairs coming out of your own pocket. Not only is this a costly expense, but it may interfere with your plans for moving and buying a new house. Additionally, holding onto a property for long periods of time may result in the loss of valuable equity that was built in the home. In the end, this can lead you to make even less money on the sale.
If you’d like to avoid the headache of dealing with inspections and appraisals, consider selling to Little Rock Property Buyers. Unlike real estate agents that require home inspections and appraisals, Little Rock Property Buyers buys homes as-is in North Little Rock, as well as other locations in Arkansas. Our team of professionals provides you with a fair all-cash offer regardless of the shape your home is in. Because we understand how precious and valuable your time is, we work to make the buying process as quick and smooth as possible. We may even close the deal in as quickly as seven days! Contact Little Rock Property Buyers today by sending us a message or calling us at 501-580-3035.