3 Appraisal Red Flags in Osprey
Three Appraisal Red Flags in Osprey
Quick Answer
Yes, there are three major appraisal red flags in Osprey that can derail a real estate transaction. First, properties in flood zones often face stricter lender underwriting requirements due to Florida Statute 627, which governs insurance. Second, discrepancies in property tax assessments by the Sarasota County Property Appraiser can lead to significant valuation differences. For example, an unexpected $50,000 appraisal gap can force buyers to bring more cash to closing. Discovering these issues late can result in contract termination or lost deposits. Call me at 941.400.8735 or reach out directly to Michael Renick – I’ll share my approach with you.
What Actually Breaks Deals in Florida
One major issue is the flood zone designation. Florida Statute 627 requires properties in designated flood zones to carry flood insurance, which can significantly affect the property’s appraisal value and the buyer‘s ability to secure financing. In one deal, the appraisal came back $40,000 lower than the purchase price due to flood zone concerns, forcing the buyer to renegotiate or walk away. The consequence was a delayed closing and potential loss of the buyer‘s deposit.
Another problem is the age and condition of the property. Older homes in Osprey might not meet current building codes, leading to appraisal issues during the underwriting process. I once saw a deal where the appraisal noted $30,000 in necessary repairs, causing the lender to suspend the file until the issues were resolved. This resulted in a delayed closing and additional costs for the seller to address the repairs.
Purchasing a home can be a time-consuming and stressful venture: visiting prospective homes; identifying the pros and cons of each property; deciding which properties are right for you; final visit at these properties; making an offer (and counteroffer); dealing with the Sellers realtor; reviewing the Agreement For Sale; finding an attorney; finding a home inspection company; and acquiring home and flood insurance. Then the difficult task starts, working with a bank and filling out all the paperwork (Ugh!). Mike and Eric were very helpful throughout the process and kept us informed of our requirements and responsibilities for each deadline.
– bshea20047, Zillow Review
Where It Usually Blows Up
These issues typically surface during the appraisal stage, which is often late in the transaction process. This timing is brutal because buyers and sellers have already invested time and money into the deal, and discovering a red flag can lead to renegotiations or contract termination. When these problems are identified late, buyers might lose their earnest money deposits, and sellers could face extended time on the market or reduced offers.
What I Tell Clients Before They Risk Money
- Flood Zone Verification: Always check the property’s flood zone status through FEMA’s Flood Map Service Center.
- Tax Assessment Review: Pull the latest property tax assessment from the Sarasota County Property Appraiser to identify discrepancies.
- Building Code Compliance: Ensure the property meets current building codes by reviewing recent inspection reports.
- Insurance Requirements: Verify insurance conditions with your lender, especially if the property is in a high-risk area.
- Appraisal Contingency: Include an appraisal contingency in your contract to protect against unexpected valuation issues.
Let’s continue this conversation.
Call me at 941.400.8735 or schedule a 15-minute call. I’ll tell you what I would look for.
Call 941.400.8735 or Schedule a Call
We had a great recommendation for Mike Renick and Eric even before we were in the Sarasota area from a former client of his summering in Baltimore whom we happen to meet. When we decided to actively start looking for a place in the Sarasota area, I spoke to Mike over the phone and he was truly courteous and welcoming. When we came down in person, he first took the time to get to know my wife and I personally to better gauge what would work best for us. Since we had limited time, he was unsparing of his own time to efficiently but thoroughly show us the inventory that would work best for us. He patiently explained the pricing rational and the factors that go into these considerations. He helped us through the closing procedures and assisted us in issues such as homeowners and flood insurance. The bottom line– we bought a place that was utterly perfect for us due to his extraordinary effort. We met Eric toward the end of our process, as he was on vacation initially, but I could readily see he is a man of great knowledge and integrity and capability, as was Mike. I highly and without any reservation recommend Mike and Eric to anyone in the market for Sarasota area real estate. You will not be disappointed!
– Ronald ginsberg, Google Review
What happens if my appraisal comes in low?
If your appraisal comes in lower than the purchase price, you may need to renegotiate the price with the seller or bring additional cash to closing to cover the gap. Lenders typically will not finance more than the appraised value, which can lead to contract termination if a resolution isn’t reached.
How can I protect my deposit if an appraisal issue arises?
Including an appraisal contingency in your purchase contract can protect your deposit. This clause allows you to back out of the deal without penalty if the appraisal comes in below the agreed-upon price, preventing you from losing your earnest money.
What To Do Right Now
Request a flood zone determination from your lender to understand any potential insurance requirements and their impact on the appraisal.
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