THE FOUR EYES OF REAL ESTATE

By Mike Lightbourn

Your House as seen by Mike

Trying to figure out how much your home is worth?

Your home will actually be viewed through four sets of eyes. Who do you think will come up with the most accurate price?

Let’s start with The Lender. The Lender, usually the bank, is concerned with the ability of the borrower to pay back the loan. They deal in Risk.

The local banks are currently liquid and want to lend money, but they don’t want the buyer to default on the loan.

Given current circumstances, such as the struggling economy and the proposed home owners protection legislation (skewed towards the borrower), the banks are being extremely cautious about who they lend to.

The watch word here is Prudent.

YOURSELF

You’re probably going to view your home as a Castle.

That’s because you’re emotionally tied to it. It’s not easy to see past the emotional attachment – the Christmas holidays, the children’s birthday parties, all the milestones.

You will not notice the imperfections because you see them every day.

You’re used to the rust in the bathtub, the cracks in the wall, the windows that may not close properly.

As an owner, you expect top dollar for this amazing mansion you call Home.

YOUR BUYER

The buyer wants to pay the least amount possible, so even if the house is in great shape, he’s going to take a Critical look at things that may bring the price down.

There’s no emotional attachment. This is a business transaction. The buyer will see the cracks in the walls, the chipped tiles, the windows that don’t close properly.

He’s going to ask you how old the roof is, whether there’s any cast iron plumbing still around and when the electrical system was last upgraded.

He’s looking at many years, if not decades, of mortgage payments. He’s looking for exceptional value for money.

If you’re a seller, start thinking like a buyer to understand what you are up against!

THE APPRAISER

The appraiser is going to view your home through an Objective Eye. He’s going to factor in the size and condition of your home, the type of community it’s in and comparable neighbourhood data, and particularly what similar homes sold for.

He’s going to look at market conditions and projections.

These are the Four Views of Real Estate. At the end of the day, the Lender won’t be influenced by what You and Your Buyer think. They will listen to what a reputable appraiser says and assess the financial capabilities of the borrower.

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(Mike Lightbourn is president of Coldwell Banker Lightbourn Realty)