http://www.realestateappraisertips.info/ - HR 3044 18 Month Moratorium On HVCC WILL NOT Cure The “Low Appraisal” Disease Issue I’m reading this morning from the Mortgage New Daily Email about ” HR 3044: To Impose 18-month Moratorium on HVCC “. The reasons given for the moratorium are these below as directly quoted: “In the period of time since its implementation, the HVCC has increased costs to consumers and decreased the quality of appraisals and has provided a level of uncertainty in an ailing housing market.
I was at McDonalds this past week eating breakfast before appraisal inspections and ran across this Great News for the Baton Rouge Economy and Baton Rouge Real Estate Housing Market. In the article, the Brookings Institute ranks the Baton Rouge Economy The #8 Best in the U.S.
“The Brookings Institution, among the nation’s most-influential policy groups, ranks Baton Rouge No. 8 among the 100 largest U.S. metropolitan areas for economic performance during the recession.
For Baton Rouge, the Brookings findings echo what the region’s chamber has been telling business prospects for months: Things are better here.
“This is the most comprehensive study we’ve seen, and it validates how strong our economy really is,” said Adam Knapp, chief executive of the Baton Rouge Area Chamber, which has scrutinized every blip in the economy since September for signs of the 18-month recession’s encroachment into the region.”
Bill Cobb is a Louisiana State Certified Residential Appraiser operating as Accurate Valuations Group in the Greater Baton Rouge Market. Bill has 17 years experience as a residential appraiser and carries on the family appraisal career tradition as a third generation appraiser. To learn more about AVG, visit:http://www.batonrougerealestateappraisers.net/
East Baton Rouge Parish Residential Real Estate Market Analysis - May 2009 The information presented in this post is based upon data extracted from the Greater Baton Rouge Association of Realtors MLS database. For the purposes of my analysis, I included data for detached single family dwellings which sold in East Baton Rouge parish for the years 2004 through May 2009. I identified the home sales as either New Construction or Re-Sale because, in my experience, they have distinct characteristics.
Today’s NATIONAL ASSOCIATION OF REALTORS® Newsletter included a Snippet from a James Hagerty The Wall Street Journal article with the title, “How To Respond To Appraisals That Miss The Mark”. A snippet of the article is below:
“What can be done if a home appraisal comes in dramatically lower than the agreed-upon sale price?
Lenders will consider an appeal, but sellers must provide them with evidence.
Start by examining the appraisal carefully for errors. If the appraiser missed one of the bathrooms, miscalculated the square footage, or didn’t note the garage, the seller has grounds for an appeal.
Look at the comparables: Is the home used as a comparison in a different and more challenged school district? Is the comparable next door to something undesirable? If possible, pull some more realistic comps.”
Here’s Bill Cobb’s Appraiser Tips On Assisting The Home Appraiser To Not “Miss The Mark”.
1.) Give Appraiser The Basics. When the appraiser’s office calls to setup your appraisal inspection appointment, fill them in with the basics about your home - living area size, age, # bedrooms & bathrooms, lot size and any major renovations. This will help the appraiser to pull their “comps” (homes comparable to your home) from MLS prior to the appointment. This will also allow the appraiser to drive by the comps pulled to see if they are actually comparable to your home or not. It is a USPAP (Uniform Standards Of Professional Appraisal Practice) requirement for appraisers to physically drive by the comparable sales they use in their appraisal reports.
2.) MOST IMPORTANT. Type Out An Itemized List Of All Updates, Renovations and Mechanical Improvements within the past 5-10 years along with cost estimates for each item and present this list to the appraiser. This will provide the appraiser with a clear understanding of your investment into your home and will allow them to scan in this list into their appraisal report for documentation reasoning. If the appraiser makes a +25,000 adjustment for your home’s superior condition, then the scanned in list will help the mortgage underwriter understand why the appraiser applied the adjustment and why the adjustment is supportable in the market.
BUILDING PERMITS. It’s become most common for the lenders to require the appraisers to verify IF a building permit was issued for a major renovation and/or addition. If you’ve completed a major project where there was a building permit involved, have that out of the appraiser. Actually, a copy for the appraiser to scan into their report would be a better recommendation.
3.) Site Plans. Present the appraiser a copy of (to take with them) your plat map or site plan with lot dimensions, if you still have such.
4.) Interior Photos. Don’t be surprised when the appraiser begins to take interior photos of your home. In Today’s Mortgage Market, especially after the mortgage meltdown, mortgage lenders are requiring appraisers to provide interior photos of homes appraised. Be prepared for this. While your home doesn’t need to be spotless, it does need to be clean and well organized. As professionally as I can state this, the homes where there’s junk in the yard and the interior is filthy (carpets stained, etc.) in disaray don’t appraise as high as a well maintained home.
5.) DON’TProvide The Appraiser With The Previous Sketch From An Old Appraisal Or The House Plan, Make Them Physically Measure Your Home! After reviewing some older sketches provided by homeowner, I do see mistakes, discrepancies and sometimes wonder if the last appraiser was even measuring the same home. And, during construction, changes take place, walls are moved and the living area either increases or decreases. It’s been my experience over the past 17 years that a physical home measurement can result in a size between 10 sq. ft. to over 100 sq. ft. larger than the original house plan stated. At a time when homes are selling above $100/sf in many local markets, this is a BIG DEAL.
AND, SAME THING IF YOU LIST YOUR HOME. You should expect the exact same professional practice from the Realtor listing your home - that the agent actually physically measure your home. Think about this. In the listing transaction, you will generally pay 6% commission. If your home is $250,000, then you’ll pay $15,000 to have your home sold. It’s crucial that at the time your home listing hits the MLS for all 2700 local real estate professionals to view, that the living area is accurate, especially now that homes are selling above $100/sf in many local markets. A 100sf error could mean the loss of $10,000 for the seller. There have been occasions I’ve appraised homes under contract where the home wasn’t even measured prior to listing, the home was significantly smaller in living area size, the home didn’t appraise for the purchase price and the purchase agreement had to be re-negotiated. If your Realtor or their assistant doesn’t physically measure your home during the listing appointment, there’s major cause for concern. When interviewing an agent to list your home, my recommendation is to only list with an agent that will physically measure your home, provide a sketch showing you the accurate living area of your home and an agent that won’t rely on any previous listings data of your home in the MLS - the MLS History goes back to 1997.
Making Sure The Appraiser Doesn’t Miss The Mark Does Require Some Effort On The Homeowner’s Part. No one knows your home better than you do and the appraiser didn’t write the checks for the updates and renovations you may have possibly made. Help the appraisers not miss the mark by providing these recommendations above.
Bill Cobb is a Louisiana State Certified Residential Appraiser operating as Accurate Valuations Group in the Greater Baton Rouge Market. Bill has 17 years experience as a residential appraiser and carries on the family appraisal career tradition as a third generation appraiser. To learn more about AVG, see:http://www.batonrougerealestateappraisers.net/
Ascension Parish Residential Real Estate Market Analysis - May 2009 The information presented in this post is based upon data extracted from the Greater Baton Rouge Association of Realtors MLS database. For the purposes of my analysis, I included data for detached single family dwellings which sold in Ascension parish for the years 2004 through May 2009. I identified the home sales as either New Construction or Re-Sale because, in my experience, they have distinct characteristics.
I ran across this article from by Jason Bronis from the Associated Press entitle, “As market falters, lease-purchase plans gain traction”. It’s an interesting article about how distressed buyers and distressed sellers are using the “lease-purchase plan” in increasing home purchases, especially in the hard-hit markets in the U.S.. Here’s a Snippet as directly quoted from the article:
“Enter the lease-purchase option, which is surging in other hard-hit states such as California and Nevada, says Jim Grissett, an adjunct professor of real estate at Emory University’s Goizueta Business School.
“At a time when we have both distressed sellers and distressed buyers, I think it makes a whole lot of sense,” Grissett says.
Customers include Cecelia Robinson, 57, a writer who says she fled her home near Baltimore after a bad business move left her on the verge of foreclosure. Pride of Ownership Partners is leasing Robinson a three-bedroom, 21/2-bathroom home that the company purchased from a bank and renovated.
For three years, Robinson can continue paying rent, or opt to buy the house for the price an appraiser set at the time she moved in. If she chooses the latter, the company will give her a down-payment credit totaling half the rent she would pay over the three years, even if she decides to buy sooner.”
While the Greater Baton Rouge could hardly be characterized as a “faltering market”, I wonder if the use of “Lease-Purchase Plans” are on the rise in our market? I’m not seeing an increase, but then again, it would seem a rare occurence for the buyers/sellers to obtain an appraisal on a lease purchase deal.
http://www.ascensionrealestateappraisers.com/ - Ascension Parish Real Estate News - $7.7 Million Lots Sale Indicates Trend Towards Smaller, More Affordable Homes To Be Built and Sold The Baton Rouge Business Report is reporting a $7.7 Million Lots Sale In Keystone Of Galvez Subdivision, purchased by the very active Vicknair Builders. At a time when some local builders who built on the higher end of price range and still can’t sell their inventory and now with Allstar Homes offering a free $15,000 with a home purchase, Vicknair Builders, who builds in the more affordable $130K to $180K market, is in a building boom in several local developments. Here’s the link and snippet: http://www.businessreport.com/archives/daily-report/2009/may/27/1000/ “Developer Kevin Nguyen sold 199 lots in his Keystone of Galvez subdivision to A and T Management. A and T, headed by Allen Tomlison, paid $7.7 million for the lots off La.
http://www.batonrougerealestateappraisers.net/ - Woodridge Subdivision 70809 May 2009 Update: Baton Rouge Subdivision Videos Current Video: http://www.viddler.com/explore/fhaappraiser/videos/49/ Solds In Woodridge Subdivision from 01/01/2007 to 12/31/2007 revealed: Average Sales Price: $346,578 Average Sold Price Per Sq. Ft.: $138.84 Median Sold Price: $349,000 Low Sales Price: $271,000 High Sales Price: $409,000 Average # of Days On Market: 112 # of Sales: 36 Solds In Woodridge Subdivision from 01/01/2008 to 01/12/2009 reveals: Average Sales Price: $336,160 Average Sold Price Per Sq. Ft.: $137.03 Median Sold Price: $349,500 Low Sales Price: $263,000 High Sales Price: $407,299 Average # of Days On Market: 96 # of Sales: 25 Solds In Woodridge Subdivision from 01/01/2009 to 05/15/2009 reveals: Average Sales Price: $330,093 Average Sold Price Per Sq
