A home appraisal is an important part of every real estate transaction. An appraisal is an independent, detailed report that helps establish a property's market value. The buyer's lender usually determines whether the buyer will pay for the appraisal upfront or if the appraisal will be included in the closing costs, which are sometimes covered by the seller.

The Lender generally orders the appraisal through an Appraisal Management Company (AMC). In the past, Lenders ordered appraisals directly from appraisers; however, all Lenders must now order the appraisal through an AMC. This process ensures that the appraisal is unbiased and is in no way influenced by the Lender. Lenders use the appraisal to determine the mortgage loan amount.

All appraisals are performed by a licensed appraiser who should be an objective third party with no financial connection or other connection to any person involved in the transaction. The appraiser will usually inspect the property - inside and out - and take interior photos including all bathrooms, kitchen(s), and living areas. Appraisers will also measure the house to obtain an independent opinion on square footage. By obtaining this detailed data, appraisers can conclude the current market value of the property.

Appraisals are very detailed reports, but here are some things they include:

• Details about the subject property, along with side-by-side comparisons of three similar properties.
• An evaluation of the overall real estate market in the area.
• Issues the appraiser feels are detrimental to the property's value.
• An estimate of the average sales time for the property.
• What type of area the home is in.

The appraiser can determine a property's market value using the following 3 methods:

Sales Comparison Approach

The Comparison Approach is the most widely-used approach and the most accurate because of the fluctuation of the market. Appraisers identify homes in the area that have recently sold and compare them to the subject property. Lenders generally expect appraisals that analyze three comparable properties. Proximity in both timing and location are important in a sales comparison analysis. Ideally, the appraiser uses sales that have concluded within six months of the appraisal and within one mile of the subject property. Price adjustments are made for differences in the comparables and the subject property.

Cost Approach

The Cost Approach combines an estimate of land value with an estimate of depreciated reproduction or replacement cost of the improvements. This approach is a best estimate of what it would take to replace the existing structure at current market rates. The Cost approach is commonly included in every appraisal.

Income Approach

The Income Approach is usually used for investment properties or typically used only if the home is in an area with a lot of rental properties.

There are a number of reasons why an appraisal may come in low. Here are a few:

• Declining market values due to fewer buyers shopping among a larger inventory of homes.
• An abundance of foreclosures or short sales in the neighborhood.
• Overpricing by the seller.

You've determined that you're ready to Buy a home. You've saved enough for a down payment, you've been searching for properties, and you're ready to make your dream a reality. Buying a home is an exciting process; however, if you're not careful, it can turn into a nightmare. Here are 6 common home buyer mistakes to avoid.

1. Not Budgeting Properly

It's easy to overestimate what you can afford. Although owning a home may be a better investment than renting, it's not necessarily going to be cheaper. Take a good look at your income and expenses for a few months before determining what you can comfortably afford. Make a budget sheet using Microsoft Excel or any other budgeting software. List all your income as well as every single expense, including food, gifts, and even haircuts. Keep in mind any emergency expenses as well.

When budgeting, don't forget about hidden costs including closing costs, homeowner's insurance, property taxes, HOA fees, and décor and furniture to fill your new home.

2. Neglecting your Credit Report Prior to Getting Approved

Your credit score can be either helpful or detrimental to your loan process. Getting a full credit report from all three credit reporting agencies - Experian, Equifax, and TransUnion - before applying for your home loan will not only let you know how credit-worthy you are, it can lead you to possible reporting errors. One study found that as many as 25 percent of credit reports have damaging errors.

3. Not Getting Pre-approved for a Home Loan before Searching

Most sellers prefer bids from prospective buyers who are already pre-approved for a home loan. Being pre-qualified and pre-approved are different. Pre-qualification is usually the unofficial process of informing a lender of your credit status, income, and debt. The lender can usually give you a ballpark figure of what type of loan they may offer. Pre-qualification is based on your word alone and doesn't hold much weight with sellers.

Pre-approval is the verification of the information you provided to the lender. This process will give you a better idea of how much the bank will loan you. Getting pre-approved can get you a step ahead other potential bidders that have no pre-approval.

4. Skipping the Home Inspection

You love that old fixer-upper, but skipping the home inspection can cost you as much in repairs as the cost of the home itself. The home inspection should include the overall foundation and structural features of the house, the roof, walls, plumbing, the presence of mold, pest infestations, heating, air conditioning, appliances, and the electrical system. Also, ensure that your inspector is certified with the American Society of Home Inspectors.

5. Picking the wrong neighborhood

You've found a home you love, but do you know what happens in the neighborhood after dark? Do you know the crime rate? What is the traffic like during rush hour? How is the school district?

Knock on your potential neighbors' doors, and don't be afraid to ask questions. Call the school principal, or talk to parents who are waiting to pick up their kids after school. Read the local newspaper to learn more about the community. There are many real estate blogs and community websites on the internet so before buying the home, check out the neighborhood.

6. Using a Bad Real Estate Agent or No Agent

You want a real estate agent who understands your needs and limitations and will work for you and look out for your interests. Get references from friends, family, co-workers, and neighbors. Consider interviewing a few different agents to find out about their activity and experience in your area.

It's definitely possible to Buy a home without the help of a professional real estate agent, but realtors have access to all the homes on the market through the multiple listing service (MLS). Unless you are in the real estate business yourself, you'll likely not have any access to the MLS in your area. Real estate agents spend their time sifting through listings, making appointments to show homes, meeting with inspectors, and helping you create a comparative market analysis to determine proper pricing.

The real estate agent you choose could be the greatest asset or biggest obstacle to finding your dream home.

Throughout history, natural disasters have wreaked havoc on families, homes, communities, and even entire nations. According to the Federal Emergency Management Agency (FEMA), every state in the country has been hit by flooding, fires, or destructive high winds. There are also 41 states that have a significant earthquake hazard.

Advanced planning and preparation can be the key to a quick response and a quick, safe recovery if you happen to face a natural disaster.

First Aid Supplies

In the case of a natural disaster, or any home emergency, it is important to have basic emergency and first aid supplies readily available, and every family member should know where these supplies are located and how to use them. These supplies should include:

• Prescription and other OTC medications such as aspirin, ibuprofen, acetaminophen, anti-diarrhea medication, anti-nausea medication, cold medicine, throat lozenges, etc.
• Flashlight with extra batteries
• First aid instruction book
• Blankets and sheets
• Antibiotic ointment
• Sterile gauze pads
• Assorted bandages
• Small, sharp scissors
• Instant ice pack
• Adhesive tape
• Absorbent cotton balls
• Antibacterial soap
• Water purification tablets
• Small bottle of bleach
• Multipurpose knife/tool
• Large and small plastic bags

These items should be stored in a durable, waterproof container. Update items annually as some, such as medications, may expire.

Develop a Family Emergency Plan

Your family members should all be prepared to respond to a natural disaster. Take time to discuss and practice for emergency situations. Teach responsible family members how to turn off the water, gas, and electricity. Make sure your children know how to safely exit your home. Designate a gathering place near your home as well as another meeting place in the occasion that you are separated.

Knowledge of first aid procedures can be invaluable. The Red Cross chapter in your community can assist you in finding a helpful class for your family. FEMA also has some material to assist children in learning more about disaster preparedness.

Preparing your Home

• Consult your local building authority for the base flood elevation in your area, and determine whether your home is in a Special Flood Hazard Area.
• Secure large appliances, such as your refrigerator and water heater, with flexible cable, braided wire, or metal strapping to keep them from falling over.
• Every home should have an ABC-rated fire extinguisher.
• Anchor propane tanks and gas cylinders.
• Make sure your house number is visible from the street in case emergency personnel need to find your home. Some cities offer a program to paint your house number on the curb for a small fee. The best place for your house number is near the front door or slightly above eye level and lit by a light.
• Permanent shutters are the best protection for high winds. A lower-cost approach is to put up plywood panels.
• Roofs can be the first to go in severe storms. Simple metal straps can keep roof rafters tied to the top wall of the house and prevent uplift during high winds.
• Foundation bolts cost around $2 each and can save thousands of dollars worth of damage if high winds, floods, or earthquakes try to force a house off its foundation.
• Keep important records, such as mortgage papers, medical records, insurance policies, birth certificates, marriage licenses, wills, stock and bond certificates, tax records, an inventory of your assets and personal items, and other vital documents in one central location where they can easily be transported if you must leave the area quickly. Keep all papers in a water- and fire-proof container.
• Check your homeowner's insurance coverage. Floods are not covered by homeowner's insurance policies. However, flood insurance is available through the government-backed National Flood Insurance Program. 
• Make food storage a priority. Have at least a five-day supply of food and water for each family member on hand. Store water in sealed, unbreakable containers, and replace it as necessary. Food should be non-perishable goods such as canned or sealed-package items.

I hope you found this material to be informative. It's always best to be prepared for a disaster before it happens. Please remember that I will always be available to help you with any of your real estate needs. Let me know if you or anyone you know needs assistance.

Mold can grow in any home, even newly-built homes or homes under construction. Molds produce allergens, irritants, and in some cases, potentially toxic substances. Although research on the health effects indoor mold can cause is ongoing, the Center for Disease Control and Prevention (CDC) states, "Exposure to damp and moldy environments may cause a variety of health effects. . . In 2004 the Institute of Medicine (IOM) found there was sufficient evidence to link indoor exposure to mold with upper respiratory tract symptoms, cough, and wheeze in otherwise healthy people. . . The IOM also found limited or suggestive evidence linking exposure to damp indoor environments in general to shortness of breath, to respiratory illness in otherwise healthy children and to potential development of asthma in susceptible individuals."

How can I prevent mold from growing in my home?

• The key to preventing mold is controlling moisture. Keep humidity levels low (between 40% and 60%). A hygrometer is an inexpensive humidity measuring instrument that will measure your indoor moisture levels and can be purchased at most hardware stores.
• When water leaks through roofs, windows, or pipes, act quickly. If damp areas are dried within 48 hours of a leak, mold will most likely not grow.
• Thoroughly clean and dry all areas affected by flooding.
• Increase ventilation by running the fan or opening the window when showering.
• Use exhaust fans or open windows when cooking or running the dishwasher.
• Clean and repair roof gutters regularly.
• If you notice condensation or moisture collecting anywhere, quickly dry the wet surface, determine the water source, and reduce the moisture. Condensation can also be a sign of high humidity in your home.

• Clean and maintain your home regularly. Discard clutter and excess stored materials. Molds grow on fabrics, paper, wood, or anything that collects dust and holds moisture.

If you are building a new home, make sure your builder is contractually obligated to do the following:

(1) Construct a mold-free home (except for very low levels of non-harmful molds); 

(2) Inspect lumber and building materials used and reject moldy lumber and building materials from being used in the construction of your home;

(3) At the close of every work day, cover the entire home in clear plastic sheeting to protect it against rain and snow until the roof is completely shingled, the exterior siding is completed, and the windows are installed and closed;

(4) Permit you to do mold inspection and testing (at your expense) during the construction process so that you can monitor whether or not the home is being built mold-free;

(5) Remove any mold contaminated lumber or building materials discovered during your mold inspection and testing.

What do I do if I find mold in my house?

If mold is growing in your home, you need to clean up the mold and fix the moisture problem. Mold will reappear until its source of moisture is completely removed. High moisture levels that are not corrected can cause mold to grow back quickly. Mold growth can be removed from hard surfaces with commercial products, soap and water, or a solution containing no more than 1 cup of bleach in 1 gallon of water.

Mold growth, which often forms spots, can be a variety of colors, and can smell musty. If you can see or smell mold, a health risk may be present. If you have health concerns, consult a health professional before beginning any mold cleanup.

You may need professional help when there is a lot of mold, the home is very damp, or mold returns after repeated cleaning.

Remember the following steps when cleaning mold yourself:

• Discard any moldy or damaged materials. Wear a mask and gloves when removing any moldy materials. Furnishings, mattresses, carpets, rugs, or sofas that have been wet or damp for over 48 hours should be discarded.
• Vacuum. Vacuum all surfaces in the home thoroughly to reduce the amount of mold spores.
• Clear wet areas. Pull carpets and furnishings away from wet walls. Carpets and floor pads that are moldy should be cut out and discarded.
• Isolate any affected areas. If the mold is limited to one area, isolate that area. Cover the affected surfaces with plastic sheeting. Note that this is only a temporary measure to minimize exposure.

If you are renting and you encounter mold, report all plumbing leaks and moisture problems immediately to your building owner, manager, or landlord. In cases where persistent water problems are not addressed, you may want to contact local, state, or federal health or housing authorities.  Find your state health department contacts here.