Of all the details that go into buying a home, waiting for the appraisal to come in can be the biggest nail-biter. After all, lenders require that a home's appraisal to at least equal the contract price before they'll finance a sale. If you and your spouse are buying a home and worried that an eccentric seller's wacky paint job might kill the deal, never fear. Appraisers take much more into consideration when valuating a home.
What Matters to Appraisers
An appraiser's job is to ensure that the lender doesn't finance a home for more than it's worth. To valuate a property, this licensed professional compares your contract sales price to that of at least three similar homes that have recently sold in the neighborhood. Then, she examines the property itself to compare its features with those of the sold properties and to ensure that it's in good condition. She makes notes about substantial improvements such as a new roof, new siding or the addition of a room. In some situations, improvements might increase a home's value. For example, in a neighborhood of homes with one bathroom, a home might appraise for more if the owner added a second bathroom.
Think of it this way: Anything that's a matter of taste won't affect an appraisal. This means that no matter how garish a paint job, it won't affect your potential home's appraisal. Likewise, the appraiser won't adjust a home's value upwards even if the seller repaints it with beautiful colors and decorates it with expensive window treatments and furniture. Similarly, an appraiser won't adjust a property's value downwards even if piles of the owner's scattered junk make it difficult to move around.
If you and your spouse are buying an older home, an ugly paint job in a property built before 1978 could be a problem. Lead-based paint, a banned product commonly used before that year, can cause serious health problems, especially in pregnant women, reports the EPA. Testing a property for such paint before finalizing a sale is required by the federal government. Furthermore, depending on the type of loan, your potential home may not be approved for sale by the appraiser unless the seller agrees to remove the problem paint before closing.
Paint choices are personal, and there really isn't any delicate way to let a seller know that you don't share his taste. If you feel strongly about not moving into a home with lime green walls, for example, ask your agent to negotiate a paint credit into the sales contract. Even though you won't get any cash from the seller outright, the slightly reduced sales price serves as an acknowledgement of the money you'll shell out on your end to repaint the home in colors you can live with.
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