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What is the Purpose of an Appraisal?

A mortgage has many specific pieces involved in it. Obviously there is the money supplied by the lender to pay the seller for their asking price. There are also many other items such as the title report and title insurance, a survey (sometimes), proof of homeowner insurance policy and an appraisal. An appraisal is actually one of the more important pieces and yet it still brings questions from buyers and sellers alike.

Required by the Lender

First and foremost, if a home is being purchased through the use of a mortgage then the lender will require a formal appraisal. A licensed appraiser works independently of the real estate agent and the lender to ensure that there is no undue influence on the process. The appraiser’s report will indicate if the home is worth the asking price.

Appraisal ordered after a Selling Price has been negotiated

The appraiser is contacted after the real estate agent(s) and all associated parties have worked out a price for the home. The appraiser will look at the contract along with a host of other items such as

* Square footage of the home

* Local property taxes for the home

* When the home was built

* General shape and condition of the property

* Average sales price of similar homes in the area

The price for the appraisal depends on the area of the country. Sometimes the appraisal fee is paid by the borrower up front and other times it may be paid as part of the closing costs.

Wise to Inspect First and Appraise Second

In an ideal world the buyer of a home would hire a home inspector to review a property before the home is appraised. The job of an inspector is to seek out any potential problems with the property. This can be as simple as finding a loose door knob to as complicated as finding out the entire heating and ventilation system needs replacing. Once the inspector has looked at the home the appraiser can approach the property with some idea of any possible short comings of the home and assign the correct value to the home. In a worst case scenario an inspection could lead a buyer to cancel a contract and look for a different home.

The Journey of the Appraisal

Once the appraiser has finished the report a copy will be sent to the mortgage lender and possibly the real estate agents. If the buyer paid for the appraisal up front then they too will get a copy when it is complete. Otherwise, the buyer will receive a copy at closing.

The lender, whether it is a bank or local mortgage company, will have their own process to review the appraisal and ensure the numbers look accurate. If the value of the home is much lower than expected then the lender may cancel the loan. On the flip side, if the home is determined to be worth more than the asking price then the buyer will have instant equity.

Self Directed IRA Network??

Well, as many of you know, for the past couple months I have really been digging deep into the self directed IRA world and I have to admit, I am truly disappointed. Here I was expecting a world filled with information, people everywhere willing to share, professionals offering advice and services however, I ended up finding a world almost as closed off as REOs. After further investigation, I started to realize that it's not closed......it's just not open. In other words, no one has blown it up. Well, that got me thinking, why not REOPro, why not me?

Here is what is going to happen. Here in the next few weeks, likely right at the start of the new year, I am going to start a social network for self directed IRA investors and professionals. Like REOPro, it's going to offer people the opportunity to come together, freely share information, ideas, resources through blogs, forums, video sharing, picture sharing, on-line chat and, much more.

What we need now are advertisers. Unlike REOPro, I don't want to stay in constant debt with this new network, in fact I am thinking of having some portions of the site closed and only open to paying members however, I am curious as to just how many people may be interested in something like this. I am thinking of a really low annual fee, like $5.00 a year....really low but, keep in mind, I am not trying to get rich of my site, just trying to pay the site bills.

What we need now is some "pre" advertisers. We need to get some people on board who would be willing to pay to have their banner randomly rotating across the top of the site. I will only have 3 opportunities...that's it. Similarly to REOPro, the three banners will rotate randomly on a 30 second interval and no, we aren't fancy enough to see how many people click your ad and all those other tracking things but, if you put in a promo code in your ad, you can track it that way. No contracts, no required length....very simple, $200.00 a month, pay 3 months in advance, if you decide to leave, we will refund the prorated remaining balance to you in full.

If interested in this new network to launch in January 2013, let me know, email me at JGonzalez@RealTracs.com

This is a timeline that I hope everyone will find useful. This is just what I have found to be the norm. If in doubt always best to check with your asset manger unless directed to send questions to their pre marketer.

Brandon Jordan

Today I was doing a few more drive bys, and I noticed sooo many for sale signs and foreclosed properties literally in just one street. Then about 2 blocks down only a few signs were visible.

Sometimes I think these mortgage companies prefer to hit one specific area and just wipe them out all at once. Is there an advantage for them when they do this?

Are they trying to get rid of the current homeowners to bring in a whole new different type of community?

If this is the case, then how are the realtors supposed to market these homes when their clients come to the neighborhood and see all these signs up?

As amazing as the headline sounds, as crazy as it would seem, it has happened. Let me explain…..

Affiliate Broker Jane Doe has been a REO agent in her local market for 17 years. She is an extraordinary REO agent and her longevity is a testament to that fact. She trusted her broker, she believed in their partnership and knew that their commitment to each other was steadfast…………..until, the economy took a nose dive and, the broker’s business dried up!

You see, Jane Doe had always worked under her broker as the REO Team Leader for her broker’s firm, managing a small team of 5 people. She was completely and utterly responsible for all the REO business that ever came in to this firm. She traveled to all the conferences, went to all the parties, wrote some amazing blogs and even was on television a couple times being interviewed by Fox News, CNN Money and Fox Business. She was and is the face of REO for this brokerage. In fact, her broker often jokes that without her, his business would have failed because all they do now is REO.

Jane Doe called me today in horror. Her Broker took over her role as Team Lead, confiscated all her files and called all her Asset Management companies and told them she had been fired due to unlawful business practices while convincing these Asset Management companies that they had nothing to worry about with their listings because he was in charge and working the files.

Yes, you heard me correctly. This Broker, destroyed Jane’s career, took over her listings and thwarted her ability to start over from crash in less than 4 hours.

Her attorney is telling her, she has no real recourse because she is an “Affiliate Broker” and these listings, contacts, relationship don’t belong to her, they belong to her Broker.

So, why would a Broker do this, why would a Broker turn on their money maker?

Well, they are in a highly competitive market and just this last year, sales are down 72%. The Broker was going to have to close his doors and shut up shop so, he got rid of her and took it over himself to reduce cost.

Make no mistake my friends, you best make sure you got your relationships squared away in writing and you better make sure you now that as an Affiliate Broker, your business isn’t your own.

Just to add insult to injury. This Broker contacted Equator and RES.NET and was able to reset her passwords and accounts and locked her out.