What A Deal
I enjoy remembering back in time to my childhood, although it wasn’t perfect there was no doubt I had a lot fun. I remember one time in kindergarten, Yes, I can actually remember and recall many events from my early years. The year was 1967 and in school just outside the door of our class room was the schools freezer was about 4x4x6 feet, in the freezer was popsicles, fudge-sicles and ice cream sandwiches, us kids could buy recess. Popsicles and fudge-sicles were 5 cents each and ice cream sandwiches were 10 cents each.
Depending how hard I worked around the house over the weekend was what determined what I got on Monday morning from my parents for school. A nickel or a dime. That was it I didn’t get anything the rest of the week. So if I work hard every Saturday and Sunday morning usually from 7am to noon time would determine how great of a treat I would get on Monday morning, the fudge-sicle or ice cream sandwich for me.
On one particular Monday morning when we got to school it was after a good weekend I had a dime in my pocket. Early before recess one of the teachers in the school noticed the freezer was broken and all the ice cream was going to melt and go bad. So after a short discussion with the principal it was determine to sell all the ice cream at 1 cent each to every kid. I thought what a deal. My mind drifted in to heavenly bliss. I thought fast and solved my biggest math problem of my life at that time. I would purchase five ice cream sandwiches today and save five cents for tomorrow. What a deal, I never had such a treat in my life, by the time I started to eat the forth ice cream sandwich it was melting all over my desk and my little stomach was blotted and over stuffed. My teacher had to throw the fifth one out in the trash. My heart was broken over the waste and the thought of it along with my aching belly took the joy of it all away.
A deal isn’t always what it looks like on the surface and sometimes we can get so emotional about a price we forget to do our due diligence properly. Last year I had a borrowers who put an offer in on a home with his Realtor. Both were excited about the price. They could believe the listing agent was selling this 1800 square foot home for more than $25,000 under market value. The home was only on the market for one day when they placed the offer in for full price to make sure they got the home.
They closed on the home and the buyer/borrowers renovated the home while living it and now nearly a year later want to seller it for a great profit. So they call their Realtor to price out the home for sale. The looks at their home and tells them what a great job they and that they should be able to get X number of dollars for their home. The Owners are very upset and here where everything comes to light. The Realtor explains that their home is only 1600 sqft not 1800 sqft.
What A Deal That Turned Out To Be
To make a long story short what happen was the original listing agent listed the home at X amount and 1800 sqft. The home appraised for that the sales amount and the appraiser had the home at 1600 sqft. In the appraisal. Both the buyer borrowers were so excited about the home and that the sales price was good in the appraisal they never looked at the details of the appraisal and missed what the appraiser had for square footage.
Here are a few points. Almost all Realtors never see the appraisal, Almost all loan originators never see the MLS listing sheet of the home. The two almost never meet. The Loan Originator and lender always go by the appraisal. It’s the buyers responsible to review all their own items they pay for, from home inspections, appraisals, surveys, water test and other items.
Like all the ice cream sandwiches I ate, it’s not a deal if it’s going to give you a major belly ache later on down the road. You pay for all these items, to help you do your proper due diligence in making a good and sound decision. Don’t buy emotionally, get all your facts, review all your documents, ask questions of all the licensed professionals you are working with and we will see you at a happy closing table.