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Tim Page's Blog

By Tim Page | Appraiser in 99037
  • Five tips to increase home value

    Posted Under: Home Buying in Spokane County, Financing in Spokane County  |  June 15, 2012 8:31 AM  |  537 views  |  2 comments

    I went to a home that other day that was trashed. The carpet was thin, worn, dated and dirty. The walls were dirty. There were piles of garbage scattered throughout the home with old car parts and broken glass in the back yard. The exterior paint was peeling.  There was moss on the roof and a leaking hot water tank in the basement.   The home was a small home so the cost to replace some of these items will not be that much. Keep reading and learn five tips that will increase the value of a home. 

    When reviewing the comparable sales it was easy to see that homes that were clean and well cared for sold for around $70,000. Homes like the subject sold for $40,000. In this case, a little effort and money will go a long ways to increase your home value. It will also give you a better chance to refinance. Because the home was in less than average condition, it will prevent the bank from giving the home owner a loan until they bring the home up to at least average condition.

    Start with the basics.  Back up your pick-up truck and throw the debris and garage where it belongs, in the garbage. Mow your grass; remove the old car out of the front lawn.

    Next, look at the home and the structures on your property.  Most of the time, the peeling paint will start on the South side of the home. This is caused by the exposure to the sun, so be sure to look on the South side of the home and around trim and doors.  Look where moisture touches the siding around down spouts and spigots.  Make sure that there is no peeling paint.  If there is peeling paint, you will need to scrape and paint.  To match the paint, get a chip and take it to a hardware store and get matching paint.  

    Check to be sure that water spigots do not leak and that there is no safety hazards and that all improvements have been properly permitted.  Any major items that have been completed without permits will have to be redone, so do it right the first time.

    Next, let’s look at the interior of the home. If your carpeting or floor covering is smelly, dated and stinks, remove the old carpeting or floor covering, clean the floors and use a product that removes smells and replace the old carpet. This will go a long way to increase your home value for small homes. If your carpet and flooring is average, just clean it good.  This is all you need to do.

    Make sure lights, mechanical items such as heaters, air conditioners, water, toilets, and showers work properly. If your hot water tank is leaking, get it replaced before it ruins something else or creates a mold problem. If the air conditioner does not work, get it removed. It is better to not have it at your home if it is broken or get it fixed.

    Fixing basic items like this might be the difference between selling your home or getting your loan. In this case, a little money and effort will go a long ways. www.appraisalsbypage.com

  • For people that want to sell their own home

    Posted Under: General Area in Washington, Home Selling in Washington  |  May 4, 2012 8:39 AM  |  724 views  |  6 comments

    Many people are considering selling their own home in today's market. If you are considering selling, the more buyers you bring to your home the better chance you have to sell your home.

    There is a percentage of people in the market that will never use a Realtor. They feel that they can find better deals and not pay the high Realtor fees by finding homes this way. If you're selling your home yourself, you can save the commission fees from both the buyer agent and the selling agent if you find the buyer.

    Some owners get approached by Realtors to sell their home. You can let them know that if they bring a buyer to your home and you close the deal, you can pay her/him a commission. This is negotiable, but 3% is a good starting point. Don't pass this up. Realtors have contacts with many different people that may be interested in buying your home now.

    Here are three tips when selling your home by owner.

    First, find out what the value of your home is. This can be completed in several ways. On line databases may work okay if your home conforms to the market. Either way, you may want to consider a desktop appraisal. This is an appraisal completed by an appraiser from the desk of an appraiser.  

    The appraiser never comes out to your home. They do the research from their desk. This is fairly accurate if the appraiser has enough data (Old MLS sheet, honest home owner, and up to date public record information).

    Desktop appraisals are much less expensive than a full appraisal. They will cost between $75 to $200. This beats $300 to $600 that the bank will charge you. Sometimes you may be able to get a good free market value from a Realtor, but if you'd like a non-bias opinion, it is worth the price of to get your home appraised.

    Next, get your home ready for sale. In most cases, this is nothing more than completing basic home improvements and making sure your home is clean and does not smell.

    Now begin marketing your home. The newspaper works good, but you can also try the top websites on line subject as www.craigslist.com, www.oodle.com, www.activerain.com, www.trulia.com, www.zillow.com, www.yahoo.realestate.com and www.realtor.com and any other sites like this.

    In my market, many homes sellers are buying homes outside this immediate area, so it is important to find the bigger cities and advertise in these cities, as a large percentage homes are sold to out of city buyers.

    www.appraisalsbypage.com

  • Easy way to increase appraisal value or dispute your home value

    Posted Under: Home Buying in Washington, Home Selling in Washington, Financing in Washington  |  April 26, 2012 10:33 PM  |  963 views  |  No comments

    I just appraised a home that pretty much did not have any sales within one mile from the subject. There was one listing within one mile from the subject. (Dang, I hate these types of appraisals.)

    The home is located in a small city with a population of around 10,000. The home happens to be an over-improvement and one of the largest homes and one of the larger lots within this city. As it turns out, I used two sales within the same city and two sales over 15 miles from the city because they were the best sales, believe it or not. So after much gritting of my teeth and pulling of my hair, I finally come to a conclusion of the home value.

    If you have a home when comparable sales are difficult to select, this may be when you have one of the best ways to dispute your home value or increase your home value. This is called the gray area for the appraisal industry when there are just not any good comparable sales. Now the trick is to provide the appraiser with better comparable sales than what you've already considered or used in the appraisal.

    In this case, the underwriter was able to provide two sales within one mile from the subject. Sure they were not as recent as the sales I used, nor did they offer similar GLA. But they did offer some of the most recent sales within one mile from the subject. Now that is the key. These two sales offered support for the immediate area. So with the sales that I've used and the sales that the underwriter sent me, I reconsidered the value. In this case, the value increased by 8% based on two carefully selected comparable sales.

    Here are the best ways to dispute your home value and possible increase home value.

    1.   Ask a Realtor to select sales for your market area and compare this with the ones used in your appraisal. If you see other sales that the appraiser did not use, you may give these to your loan offers to be considered in the appraisal. Make sure they are better than the sales used in the appraisal or your appraiser will simply reject them because they are not any better than what is used in the appraisal. Now the key to being a better sale is more recent, proximity or location or both, square footage, design and appeal, etc. Ask an expert to help you with this.

    2.      Do not attack the appraiser. They put on shoes just like you and they do not like to be attacked or threatened in any way, shape or form.That's it. In many cases, the Realtor or the home owner can't provide better sales than what I've already used in the appraisal. But in some cases, I've reconsidered the comps and the value and in this case, the value can increase 8%. This could increase your home value by $10,000 or $20,000 just like that. Give it a try, you just never know.   www.appraisalsbypage.com

  • Did your appraiser do their job?

    Posted Under: Home Buying in Washington, Home Selling in Washington, Financing in Washington  |  April 26, 2012 10:26 PM  |  705 views  |  2 comments

    I'm finding a disturbing trend in the area that I appraise. Many of the home owners are telling me that their last appraiser did not even measure the home and pretty much walk around the home and take a few photos and do the same on the interior.

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    Why is this disturbing, because this is the appraisers job?.  Let me tell you what an appraiser should do when they get to your home. First they will introduce themselves. Next, they will walk around the home and measure all sides from the exterior and the inside of the garage. The garage will not be included in the GLA.  

    When they get back to the office, the will place the sketch into the appraisal and check the square footage with public record or tax record information to be sure they are within 100 square feet or so. If they are not close, the appraiser will try and reconcile why the sketch differs from public record information?  Did the owner add additional non-permitted square footage? Did the appraiser measure the exterior correctly? How close is public record information? Did the assessor measure the home incorrectly? If the appraiser does not check the square footage, the entire appraisal and the results of the appraisal may not be correct.

    If your appraiser did not even measure the home, I'd ask what else they did not bother to do. Did they bother to drive by the comparable sales and at least compare the locations of the comparable sales and the outbuildings? Do you think this might be important? I do. MLS data is often not correct. A shop might mean a small shed or a basement shop or a larger outbuilding.  Driving by the comparable sales will let you know this. With new regulations and reduced appraisal fees, many appraisers are trying to cut corners by copying MLS photos.

    It might not seem like that big of an issue unless it's your home. Even if the last appraiser was able to create a product that the bank can use, can the next bank use it? Most likely not, because many times not only the quality of the appraisal is terrible, the value may be incorrect. And if this was the case, you could be stuck with a loan for 30 years. 

  • They laughed when I sat down to write an appraisal and gave most of my emphases on the listings….But

    Posted Under: General Area in Washington, Home Buying in Washington, Home Selling in Washington  |  April 26, 2012 9:04 AM  |  573 views  |  No comments

    I looked at a home the other day. The market area consists of older homes on larger lots. There were two perfect match comparable sales in the area that happened to be listings. The area also offered two good sales in the area, but they were older sales. 

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    Several of the other sales were not the best but they offer recent activity. So I used a blend of sales and came to a conclusion that the most accurate value is to use the recent sales to support current market conditions and the listings that also support current market conditions. In this case, I had to place less emphasis on the closed sales in the immediate area because of the two match listings in the area and the two recent sales in the area. The best sales were offered a sales date that was too old. 

    Five years ago, this would have never happened because the most appraisers did not analyze the listings at all because most of the time, listing are nothing more than what the home owner is wants to sell their home for and listings do not provide real support of what someone will want to pay in the market area. Now all appraisals that are FHA and most appraisals will require two listings because of banking requirements and declining market conditions.

    The listings will matter when the listings are lower than the closed sales and the listings have been on the market for an extensive period of time (in most markets, this will be six months to a 12 months.). If the listings are higher than the best closed sales in the market, the appraiser can use the listings to support the sales.

    In conclusion, this market will continue to challenge the appraiser and listings can sometimes be just as important as sales. This is because the appraiser and underwriters of the appraisal will ask the question, “if there are two identical listings in the area that are listed for around $200,000 and two older sales that sold for around $225,000 with the most recent sales supporting the listings, why did the appraiser appraise the home at the higher end of the value range using the older sales when current sales and listings are showing a clear trend.”

    Here is another question to ponder.  An appraiser is to determine the value as of the day they inspect the property. Why would the appraiser place all of the emphases on closed sales from six to nine months ago when the market is moving in one direction or another and not consider listings and/or pending sales.

  • Quick and easy systems and secrets on easy to use number guide on how to select comparable sales

    Posted Under: General Area in Washington, Home Buying in Washington, Home Selling in Washington  |  April 26, 2012 8:54 AM  |  721 views  |  No comments

    I've created a number guide to help you pick comparable sales for your home. I don't use a number guide, but I do use this system every day of the week when I'm appraising homes, and you can too. This guide will give you a method for selecting the best comparable sales for your home. 10 are given the most consideration and 1 is given the least consideration.

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    Location-10-This one doesn't need much explaining. Homes located on the street and on the same side of the street as your home is the ideal comparable sale. But if the design of the home differs, it may not be comparable to your home. If your home is located next to a lake, location is extremely important. The square footage is almost as important as the location. An appraiser will not use a home that differs significantly in square footage to your home unless they are absolutely forced to (i.e. no other comparable sales to support the location or most important amenities).

    Square footage-9- (GLA-gross living area) - The square footage of your home is separated by the above ground area and the below ground area. Any living area that is above ground level is considered in the GLA (Gross living area). This would be the main level, the second level and any other level above ground level. Spit entry homes offer a basement that is below ground level. This area is included as a basement. Some split entry homes are homes that are at ground level. These homes are built on a slab of concrete and are all located above ground level. All of the square footage of these homes is included in the GLA. Basements, garaging, other outbuildings and secondary guest homes are usually not included in the square footage. A guest home will be included as an amenity. This is one of the most important factors in determining the overall value of your home.

    Location of bedrooms and bathrooms-8- is extremely important in some market areas. Younger families usually want at least three bedrooms located on one level. This is one of the reasons why 1 story homes with three bedrooms on the main level is so popular. Other floor plans that usually appraise well and sell well are two story homes and other designed homes with three bedrooms located on any level that is above ground level or above grade. Bathrooms are simply a matter of function. Are the bathrooms next to the bedrooms? If you are buying an older home and there are three bedrooms on the second level, but no bathroom, this may affect marketability, because this will lead to a functional issue since you'll have to go all the way down stairs in the middle of the night to go to the bathroom.

    Design-8-this criteria should be given strong consideration when determining your home value. The reason why this is important is because it makes it difficult to argue the value if the home design is the same as the subject. Many times, the design determines the functional utility of the home and the locations of the bedrooms and bathrooms. If an appraiser uses two story homes to compare to your 1 story homes, you'll conclude that they are not even comparable, because they offer a completely different design and a complete different market. This goes hand in hand with bedroom location and bathroom location, too. Some homes offer three bedrooms on one level, while other home offers one bedroom on each level. Homes with one bedroom on each level usually end up an REO (bank owned home) in my area, so pay attention to the location of the bedrooms and bathrooms, it's important.

    Date of sale-8- is one of the most important factors in determining the estimated value of your home. This is because every day and every season, everything changes, the people in your market area, the interest rate, the motivations of people buying and selling homes, closing and openings of new jobs in your market area and the list goes on and on. In a volatile market area, lenders will require that the appraiser use two sales that have closed within three months and possibly even two listings or one listing and a pending sale.

    Heat source-7-: Any heat source that is non-typical for the immediate market area will cause problems. If most of the homes in your market area offer gas, forces air and the home you're thinking of buying offers electric baseboard heating, make sure you or your Realtor compare homes with similar heat source. In some areas, it makes a big difference. Think about the cost to convert the heating system. The furnace and all of the duct work that blows hot air throughout the home is a significant investment. Many buyers do not like baseboard heating, as this limits where they can put their furniture. They are usually less efficient than other heat sources, which will cost the owner more money to operate. Some Realtors and home owners will tell you that they can heat one room instead of the entire home. The real issue is in the pudding and that means finding real comparable sales that support value and in most cases, it is not good.

    Views-7-are hit and miss. This means that I've seen view properties that sell for significantly more than homes in the area. The buyer is clearly looking and buying homes with big views. But many times, this criterion is often oversold. A good view to you may be a typical view to everyone else. Make sure you don't pay for a view that is not warranted. It happens everyday. Views must not be obstructed by homes or your neighbor's trees. The views must not be obstructed by taller homes built in front of your home. If your home is located directly above a noisy freeway, but your home offers a view, the value of the view is offset by the noisy freeway, in most cases.

    In other words, be careful when purchasing a home with a view. Views may by considered a number 1 in some cases, but I've placed views at 7 to be sure that you understand that views and sales of view properties are limited and may cause your home value to fluctuate more than other homes in the area. So when considering views, it must be breathtaking and located on the bluff before you should get excited. If everyone has the same view of a mountain that is miles away, don't get excited.

    Quality of the home-7-: Your home must offer significant quality to step up into the next quality range. Let's say that you have a trailer and you install the nicest slab granite counter tops that you can afford. Are you laughing? I've never seen this before, but many times, home owners will improve areas of their home, but other areas including siding, roof, decking material, floor cover, bathroom fixture, ceilings are just not the same quality. Make sure the design and quality go together or you could be wasting more money.

    Lot size6

    If your home is the largest lot in the area and you are not allowed to develop your lot, your excess lot may not be worth any more than the surrounding smaller lots. This criterion is important, but less important than other areas of the appraisal. The appraiser should try to bracket the lower and upper end of your lot size, however, in some cases; the lot size will not contribute significantly to the overall value.

    Basements are a secondary consideration for all appraisals-5-. The basement is included below the GLA and is adjusted at a different amount. Don't allow the Realtor or yourself to just add up all of the square footage for your above grade square footage and your basement and add them up. It does not work this way. Basements are a hole in the ground and many people do not like a basement. That said, many people do like basements. One of the reasons why you'll want to spend less money and time fixing up your basement is because is it difficult to support the value improvements for a basement. If you add two egress windows, making your basement offer two additional legal bedrooms, most MLS data will not disclose this. What is not disclosed is difficult to support and prove.

    Outbuildings and garage count-4- Outbuildings and garage always seem to cost more than what you get back out of them. In most cases, however, they are in demand. They are usually difficult to locate. They usually sell for more than other homes without shops, but from speaking to owners and reviewing comparable sales, the difference in the increase of value will not support the full cost to install these buildings. A word of warning about outbuildings, don't overdo this area. Many city centers (homes closer to the city core, downtown areas) offer older homes with one garage. A second garage will usually bring the value of your home upward, if you didn't build it, but you buy it with the home, it usually is a good investment. This is because a two car garage within the city is in high demand, as space is limited. If you build the garage via hiring a contractor, don't be surprised if the garage cost you more than the home is valued with the garage. In most cases, you'll pay more retail than what you'll get back in investment.

    Condition of home-4-: It is difficult to support and prove the condition of other homes. As long as your home is not falling apart and you try to keep up with your home, everything will be okay. Average condition will include nail holes in the walls, tacks in the walls.  The floor covering will be clean and well cared for with maybe a few minor stains on the floor that can be clean up. Most of the time appraisers will not make adjustments for condition unless it is clear that your home is a complete wreck. In most cases, if your home is in poor condition, it may be in poor overall quality. Sometimes quality and condition overlap. Let me give you an example. If you have a home with dirty, broken tile in the shower, the condition of the shower is poor, but the quality materials used in the shower is good. If you replace the shower tile with high quality tile, then the condition and the quality will be good. Most appraisers will try to avoid condition and quality adjustments unless they have to. This is because it is difficult to support and adjustment for, in most cases.

    I've based the most important criteria as 10 and the least important criteria as less than 1. The higher the number, the more important it is in determining the estimated value. Some of the numbers are the same. This means that they can overlap and, in some cases, be just as important. I hope this helps when reviewing your appraisal or if you are selecting comparable sales for your home.

     

  • Four of the worst improvements to make when trying to increase your home value for your refinance

    Posted Under: Home Buying in Spokane County, Home Selling in Spokane County, Financing in Spokane County  |  April 20, 2012 3:21 PM  |  742 views  |  1 comment

    Do not add drop down stairs to your attic and finished this area with lights, drywall and flooring. This will be a good area for storage, but this area will not increase the value of your home.

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    Here's why. This area does not have a heat source, and does not have permanent stairs to the main portion of the home. This area will not be included in the GLA unless this area is permitted by the city. In most cases, it is difficult to support value for unfinished attic areas because the MLS does not always list unfinished attics and they are usually not included in the square footage of the home. Unless you plan on getting permits, building real stairs to the attic and finishing the attic to the same level of quality as the rest of the home, save your money, because this will not increase your home value in most markets.

    Do not add flooring to your attic area in your garage. This area is used for additional storage only and is not included in the GLA. While this may be a nice area to store items, this area will not be included in your square footage. This area will be included with the garage and will not increase the value of your home

    Do not installing expensive blinds. Blinds can be removed or sold with the home. Even if the blinds stay with the home, appraisers will not give you significant value for your new blinds. It doesn't matter if they are wood with automatic openers, they will not increase the value of your home. This is because they can be removed in most cases. If they can't be removed, it will be difficult to support a dollar per dollar adjustment for. If the unique blinds are not supported with other homes with unique blinds, no value will be given. And if a value is given it will not be enough to tip the scales one way of the other.  Since most MLS systems don’t have a drop down menu with “blinds” they will be difficult to support.

    Do not replace the roof, siding, or other major items unless you absolutely have to. The cost to complete these types of projects will be significant. And as it turns out, when the appraisal gets to your home, if you have siding that looks good and functions properly, that will be all that they look for. If you have non-conforming siding and a non-conforming roof, this would be the only time you' ll need to consider replacing these items or if they are at the end of their economic life cycle (i.e. falling off). This is because the function and utility of well cared siding is the same as brand new siding, except there is a price difference of $20,000.

    I once had a borrower that was upset when they could not get any value for their attic area that offered drop down ladder and one light bulb with low ceiling height and no permits and no floor covering, fancy blinds, and an area above the garage that he added so that he could store wood.  While these small items may help sell your home, they usually will not add significant value.

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