Does this home make for a smart purchase? Based on this criteria, and the points below, we believe so!
Since 2016 the zip code where this three-bed, two-bath home in Oakland is located has experienced a higher home price growth than 85% of zip codes in the Bay Area. This suggests there should be steady growth in value in the future.
The property is in the 80th percentile of living space on the block and 76th in the area. We expect the final price per square foot will be more than 10% below the median for similar homes nearby. This combination of historical price appreciation in the zip code, the size relative to other homes in the area, and expected sale price per square foot makes this a ZeroDown 'Smart Value' Hot Pick.
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To ensure that the buyer (and lender) is paying a fair amount for the home, buyers insert an appraisal contingency, which allows the buyer the ability to walk away from the purchase without penalty if the appraisal returns a value lower than a set value (usually the purchase price). Aside from walking away, the buyer can renegotiate for a lower price with the seller, request that their lender make an exception, and approve their loan as if the property had appraised to match the purchase price or make up the difference between the purchase price and appraised value via their own funds. In most cases, if the buyer makes use of the appraisal contingency to walk away, they are likely to receive a complete refund of their earnest money. However, buyers must be cautious and include this in the contract to avoid problems at a later stage.
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Serious about buying a home? Realtors prefer showing homes to buyers with a pre-approval letter. Learn the difference between pre-qualification and pre-approval, the benefits of a pre-approval letter, and why you need one.
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