As an Amarillo, TX appraiser with years of experience, I know how important the appraisal process is, and what matters most. I recently discussed the advantages of good landscaping —how it won’t raise your value but it just might get your home sold faster—and I’d like to look at the other aspects of your home that make buyers take a second look.
In this world of Pinterest and Instagram, home buyers are on top of the latest trends in aesthetics and gadgets. If your home encompasses any of these trends, social-savvy buyers may be that much more likely to be impressed.
1. The Smart Home
When Google bought Nest for $3.2 billion, it wasn’t just the world’s tech leaders that took notice; homeowners are increasingly looking at in-home technology: Thermostats that adjust according to your behavior, kitchen appliances that keep food from burning. The key here is to not go overboard; don’t overspend, but think of one cool, on-trend item that can make you stand apart.
2. Color—or Lack Thereof
Every new year sees a new color trend, and for 2014, it’s black. 74% of respondents to a Houzz.com survey said they liked black accents. It modernizes a home and makes a bold statement. Just keep it minimal—an accent wall, a bathroom, or a fireplace mantel.
3. Embracing Nature
It’s all about the natural look and feel of things these days, meaning natural materials, light, and surroundings. This means bamboo floors, butcher block counters, skylights, and wood grain anything. Don’t spend a fortune: Pick up an old wood table from the flea market, refurbish it yourself, and put a great, big aloe plant on top.
You’re trying to sell your home, so you don’t want to spend too much, but think of small ways to incorporate big trends, and you’ll stand out from the crowd.
Contact me today for a fast, professional pre-sales real estate appraisal.
Did you know that in Amarillo, Texas, there are almost 250 foreclosure/real estate owned (REO) properties on the market? The lowest-priced single-family REO property in Amarillo is currently listed for a mere $12,000. But before you break out your checkbook, there’s some important information you should be aware of: on February 6, 2014, new regulations took effect regarding the appraisal of REO properties.
Prior to 2/6/14In the past, REO buyers utilizing Federal Housing Administration financing were able to use the appraisal that had been originally ordered by HUD, meaning a new appraisal was rarely necessary. In situations where an “as-repaired” appraisal was being used, when a borrower was applying for a 203(l) loan, a new appraisal was not necessary.
Going ForwardFollowing the changes, in situations where a direct endorsement underwriter decides there is a deficiency in the original HUD appraisal, new appraisals will be required. This also applies to the “as-repaired” situations. Additional circumstances requiring new appraisals include when an REO contract isn’t signed within 120 days of the HUD appraisal’s effective date, and when a HUD appraisal is no longer valid.
The new guidelines also stipulate that when a contract sales price is higher than the HUD appraisal, the FHA loan is to be based on the lower sales price, the initial listing price, or the new appraisal. Finally, while other foreclosures can’t be used as a basis for appraisal, appraisers are to consider short sales as well as the motivations of buyers and sellers. As in the past, REO properties are appraised “as-is”—as the value exists on the date of appraisal.
Does this Affect You?If your REO property was purchased and/or appraised before 2/6/14, you can stop reading here—you’re not affected. If your REO was purchased after, and there was no “as-repaired” situation, or you’re still within the 120 days of the original appraisal, you’re also not affected by the changes.
If you’re not sure, you’re overwhelmed, or you simply have no idea what these changes mean to you, don’t worry. As a Texas panhandle appraiser with over 35 years of experience, I can help you navigate the past, present, and future guidelines. Contact me with any questions—I’m happy to help.
By John Dudley
They’re making a list and they’re checking it twice. Fannie Mae recently announced that it has started collecting the names of shady appraisers. The government run agency won’t shut them down, but they will warn banks and lenders to be careful and will subject their appraisals to extra scrutiny before buying them.
Preventing Another Crisis
Even since the subprime mortgage crisis that caused the recession, Fannie Mae has been looking for ways to reduce the number of defective loans that it buys and bundles into securities. Accurate appraisals help to ensure that borrowers can pay back their loans without defaulting.
What Trustworthy Appraisers Do Right
Shoddy appraisers will often inflate the value of a home, misrepresent important details of the property, and use poor comparisons to form an inaccurate appraisal.
A good, trustworthy appraiser will faithfully record all characteristics, positive or negative, and provide accurate valuations by utilizing appropriate comparisons to similar properties.
The Damages Bad Appraisers Can Cause
In one case, an appraiser overestimated a home’s value by over $60,000, resulting in an extraordinary loan-to-value ratio of 110%! Not only is this dangerous for the the lenders, it can also be disastrous for the borrowers, causing them serious credit problems by enabling them to take out loans that they can’t realistically back up.
Currently, only four appraisers are on the list, but that number is sure to grow as Fannie Mae continues to scour its records.
To speak to a trusted and experience appraiser about any questions, comments, or needs you might have, feel free to contact me at any time—I’m more than happy to help.
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In my 35 years as an appraiser operating in Amarillo, Texas, there’s one question I always hear from homeowners: how can I improve my house to get a better appraisal? Are there any tricks I should know about?
While I wouldn’t characterize these tips as “tricks” (we’re not gaming the system), there are certain home improvement projects which yield a greater return on investment, or ROI. Similarly, there are projects that simply aren’t worth it. I’m sharing both, so you can achieve the appraisal you want.
Projects with the Best ROI
In general, bringing your home up to community standards is well worth it. If your property is more of a fixer-upper, fix it up! Paint the walls neutral colors, address any structural problems, and make sure all the plumbing and electricity are in proper working order.
Kitchens and bathrooms are two places you might want to concentrate your efforts. Adding new fixtures in these areas tend to pay off.
Projects with the Worst ROI
You shouldn’t improve your home well beyond community norms—the appraisal isn’t likely to move much, but you’ll have sunk lots of money into it. You may want to be wary of adding swimming pools, garages, and sunrooms.
Document Your Improvements
Be sure to keep a record of your improvement projects for the appraiser to review. This will help your appraiser see the quality of what you’ve done, instead of leaving it up to guesswork.
If you need any more advice, feel free to contact me for expert appraisal consulting or for a pre-sales appraisal for your Amarillo TX area home.
Many home owners in the Amarillo, TX area think their real estate taxes have been wrongly assessed, and that they are too high. Given the subjective manner in which property assessments that determine those taxes are carried out, it is not surprising to note that so many people are quite unhappy with the amount they must pay. Since the city commissioners ratified a real estate tax increase in 2011, following a long history of increasing the property taxes it collects, property owners have seen their real estate tax bills increase as well.
Legality of Property Taxes
The process to fund public schools is tied intrinsically to what ends up being a state property tax. This is the very tax that is prohibited by the Constitution of the State of Texas. While virtually no one protests the need to fund schools, the property tax remains the most unpopular tax paid by residents.
Homeowners Have Options
Fortunately, homeowners have recourse when it comes to their property taxes. Properties are appraised each year between January 1st and April 30 th for tax assessment purposes the following year. After the notices of appraisals are sent out, the protest period begins, usually around May 15. In order to ensure the greatest chance of success during this limited protest period, homeowners need to do their homework.
The Assessment Process is the Problem
Part of the issue is the sometimes unfair way that properties are assessed. A higher assessed value results in a higher rate of tax. This assessment is highly suggestive, given to the incredible burden of the assessor relative to the number of properties to assess and a slew of other myriad possibilities that are not necessarily factual in nature but can have an impact on how closely the property is examined.
Professional Real Estate Assessment Offers Accurate Property Values
When appealing the assessed value of the property, homeowners must be prepared to show how the given value is off the mark. Sticking to the facts and offering an unbiased assessment of the property by a professional real estate appraiser gives the homeowner a strong foundation from which to voice their appeal and disapproval, and is usually the deciding factor in an appeal.
Knowledgeable and Fair
Professional real estate appraisers devote their lives to knowing the ever changing real estate market of the Amarillo area. The surrounding homes that are comparable in amenities, size and style provide a benchmark from which to conduct the appraisal and can serve as data to support your appeal while looking at the big picture returns a more accurate value.
Contact me for fast turnaround on an independent real estate appraisal - the main document you need for challenging your property tax assessment.
When Selecting an Appraiser, Make Sure the Bulk of Their Work Isn't from Appraisal Management Companies (AMC's)
Today is the day the appraiser is coming: The real estate agent gets up and runs over to the home, hoping to have an intense chat, one where local home prices for the area will be discussed. Instead, the local appraisal management company has sent out a paper pusher, one who has never been to the neighborhood, and probably doesn’t even know the city. How is this person going to make an accurate appraisal? The choosing of a qualified appraiser needs to be more than just the selection of anyone that works with the lender’s appraisal management company.
The purchase of a home or commercial property is one of the largest financial decisions a person ever makes. Yet, it is also an infrequent purchase so the experience level needed for such transactions is rarely attained, unless the buyer continually buys and sells property. This makes the reliability and competence of a real estate appraiser’s services very important. It is on this professional’s decision that you make a final buying evaluation. Yet, these days, finding a qualified appraiser seems to be of general lament in the real estate industry.
Any appraiser worth his salt is probably getting on in years and those entering the field – well, at the price being offered by the AMCs for an appraisal, these young professionals leave a lot to be desired. This deterioration of an industry lies in stark contrast to that of the industry of the mid 1980’s.
Prior to the appraisal licensing legislation of 1991 almost anyone could become an appraiser, but this licensing law has changed that. Becoming qualified to appraise requires a bachelor’s degree and 300 hours of qualifying appraisal education (courses that are expensive and not available in all areas.)Add to the fact that becoming an appraiser is difficult; the housing crisis of the last decade put a severe strain on the industry, especially as appraisers were often blamed for creating the housing bubble. Consequently, in the current up-trending market - we can certainly say that finding a good appraiser can be very challenging.
Because of the stringent requirements made of appraisers, and because of the difficulty in finding qualified appraisers at an affordable price, the AMC model has become popular with lenders. Some, even suggesting that the use of the AMC is a requirement, when they aren’t. Lenders are only required to be separate from the legal representative who hires the appraiser. But this doesn’t mean the AMC is the best appraisal platform, and in many cases problems arise when using these companies.
Appraisers Make Less Money
Now that there is a middleman, the AMC, the appraiser makes less money. So not only do appraisers have to go through stringent educational requirements, but they also have to deal with working through the form requirements of an AMC.
In fact, the AMC is now offering to produce more appraisals at a lower cost, and this opens a whole new can of worms. This means they hire cheap and fast appraisers. So, where before, an appraiser was better qualified when he had specific geographic competency, under these new standards an appraiser’s work will be across country and he won’t have that deep knowledge of a specific location.
To save money, and complete the appraisal quickly, most AMCs are using appraisers that never step into the neighborhood and have no historic knowledge of the area. They are paid less to do the appraisal and the result leaves a lot of holes in the deal. Appraisal Management Companies are requiring lower fees, so good appraisers are taking fewer jobs, and those that are performed by less qualified professionals are coming out with problems.
Most good appraisers aren’t going to turn in an appraisal in 24 hours, and for about half the normal fee. And if that is the goal, then this means hiring less qualified people who have less experience. These are the people that are willing to take these fees and that means limiting the art and science of good appraisals.
Growth in The Texas Panhandle, especially in Hale County, Carson County, Potter County Creates Property Appraisal Issues
Historically, a land of spectacular scenery, vast unpopulated plains and sagebrush, the Texas Panhandle has recently enjoyed the most rapid growth in the country. But what’s driven this unprecedented population growth to an area that was almost abandoned some fifty years ago? Much of the reason is a combination of quality of life needs; access to milder climates, outdoor areas, the increase in agriculture and organic farming, low housing prices and strong economic foundations.
The Growing Economy
Local governments have seen tremendous growth in Hale, Carson and Potter County. In fact, the population of the entire Texas Panhandle in general has increased substantially. Consequently, local economies are also being lifted, primarily by the agriculture and energy related industries.
This substantial growth to communities that haven’t seen economic stability in decades is great news. However, as with all types of growth, a few hiccups appear along the way. One such problem is the lack of qualified real estate appraisers to help complete a home purchase or sale.
Why is An Appraiser so Important?
When buying or selling a home, a real estate appraisal helps establish the property’s market value for this area. Mortgage lenders always require an appraisal before making a loan, as they want to make sure the property can be sold for the amount they are lending.
The issue in the Panhandle area lies in the fact that there just aren’t enough good appraisers to handle the increase in popularity of these counties. Consequently, lenders are calling in the Appraisal Management Companies (AMC). These are companies from larger metropolitan areas that offer quick and inexpensive appraisals.
The problem is that the appraisers contracted by AMC companies are less experienced, don’t know the Panhandle area and often make mistakes when appraising a property. These mishaps can result in money loss for the seller, or even in mismanagement of the purchase for the buyer. AMC pays a low contract fee to inexperienced appraisers, and then they offer an overload of work which causes even more issues.
AS a buyer or seller, whenever possible (when setting a sales price or being cautious about investing in a property), it works out best to find your own local, independent appraiser. Although a good local appraiser may take a day or so longer to get to the property, and he may charge slightly more than the AMC, he also knows the local area, the economy and the future growth of this area.
A local company will have appraisers that have grown up in or served mainly in this area for many years. They understand that the low economy of the past is now changing, and as a result, so are the home and property values for the Texas-Oklahoma Panhandle area. The result is an appraisal that lets you make good decisions, that you own, that is not tied to a use other than your primary interest.
For homeowners who are unhappy with their tax bills, the first place they should look is the assessment that was completed by the county. Then, the county where the home is located determines how much tax is charged per $100 of assessed value. It is important to take action quickly upon receiving a tax bill that is higher than expected. While each county has an appeals process, there is also a deadline by which that appeal must be filed in order for it to be heard.
Potter County TX Assessment
Appraisals of properties in Potter County begin on January1 and continue until April 30 after which homeowners begin receiving their tax bills. Protests can be filed beginning about May 15. Homeowners must appear before the Appraisal Review Board, usually in June.
Randall County TX Assessment
Randall County also begins to assess properties on January 1, finishing the process by April 30th. Property owners should be sure to file their protests to their tax bills by around May 15 and be ready to face the Appraisal Review Board in June.
Carson County TX Assessment
Property owners who feel their properties have been unfairly assessed need to file a written protest, either on the forms provided by the appraisal district or via letter. The Appraisals Review Board should receive this notice no later than May 31, or 30 days after the mailed notice of the appraised value of the property.
Gray County TX Assessment
Homeowners have until about June 7 or 30 days after the notice of the assessed value is delivered, whichever is the later date, in order to file a notice protesting that value.
Moore County TX Assessment
Within 30 days of when Moore County tax assessors mailed the notice of property appraisal value is the deadline for protesting this figure.
Deaf Smith County TX Assessment
May 31, or 30 days after the document that notifies the property owner of the assessed value of their property is delivered, is the last date that property owners can file notice protesting this value.
Hale County TX Assessment
For best results, property owners should file their protestations to their appraised property values by May 31, or up to 30 days after the notice of assessed value was mailed.
Hutchinson County TX Assessment
The deadline for Hutchinson County, TX is either May 31, or 30 days after notice of the values was delivered, whichever of these dates is latest. It is best, though, to get the appeal in as soon as possible.
Being prepared with information to back up their claims of too-high property values is the best way for property owners to sway the members of the Appraisal Review Board to change that figure. Hiring an independent real estate appraiser provides an unbiased, and realistic, figure from which to work. Having information from this professional enables the property owner to have valid and recent information that can only bolster their case.
Contact me for a fast response if you may need to start this process. The main document you need is an independent real estate appraisal.
By John Dudley
Generally, the lender, not the borrower, is in charge of arranging an appraisal for a new home purchase. This poses problems for the borrower, as the lender won’t lock a mortgage value until the property has received an appraisal, and even then, the appraisal is only of value to that particular lender.
DOES THE RULE NEED TO CHANGE?
A portable appraisal, held by the borrower, would allow the mortgage process to move faster, thereby allowing the borrower to apply with several lenders and find the best rate.
This is already the norm in commercial property investments. Why not home purchases?
PUTTING APPRAISALS BACK IN BORROWER HANDS WOULD GIVE THEM MORTGAGE SHOPPING OPTIONS
If a borrower had a portable appraisal, he could visit several lenders, ask for a firm loan offer, and then choose the one he wanted based on the value that works best for him. Of course, there would then be a risk that the borrower could walk away from all the proposed loan offers, which then means the banks could be out a few dollars for forming the quotes. This could be remedied with a nominal application fee, so borrowers would likely stick with 2-3 banks. Online mortgage markets also exist, just like those for insurance, and those fees are often part of the marketing budget for lenders.
LENDERS NEED FAIRNESS TOO
One way around this issue could be something called a lock fee, where borrows agree to pay the fee by their chosen lender. The lock fee would prevent the borrower from walking away should interest rates worsen and starting from scratch.
YOU ALMOST NEED TWO APPRAISALS
The issue is that right now, it's almost better to get the same home appraised twice. If a homeowner in a refinance situation, for instance, gets an appraisal before even consulting the bank, the minor cost may result in a much clearer lens when shopping for a refinance package. If, for instance, the bank's opinion of the home's value is significant different than what an independent appraisal might produce, the overall cost to the homeowner in interest rate or lost equity could be enormous.
If a borrower gets a home appraisal on his own, to determine market value, it isn't usually acceptable to the lender. Lenders require that home appraisals are done in the institution’s name, so an appraisal done by the homeowner wouldn’t work under the current rules.
However, there’s no guarantee that the appraisals being paid for by lenders are a true reflection of the value of the home; many times, the home appraisal is done by a company in which the lender may have a degree of financial interest, or by an appraisal management company with inexperienced appraisers doing these things in assembly line fashion. This, of course, means that the appraisal is not necessarily done from an unbiased view, and the homeowner is on the hook for any ultimate cost in terms of equity or credit.
Lenders are consumers too. Protecting the consumer should be the first order of business for any lending company, and there are current issues in the current home appraisal system that could be remedied in order to offer greater consumer protection to the borrower.
By changing the rules to allow the borrower to find a qualified appraiser of his choice to do the appraisal, the borrower then has greater consumer control and protection. Having a portable appraisal would only result in two new disclosures, a uniform offer sheet so borrowers can easily compare lenders, and a lock confirmation. Both of these forms would allow for greater appraisal security and greater choice for the borrower, and in reality, the borrower should be protected throughout any purchase agreement.
One of the key differences between buying commercial property and buying a home, is that the buyer usually orders the appraisal.
THE COMMERCIAL ADVANTAGE - PICK YOUR APPRAISER
This is an advantage, because you can choose a real estate appraiser with deep experience in commercial properties. But if you're not an old hand at buying commercial real estate, there are a few additional things you should know:
WATCH OUT FOR ENVIRONMENTAL ISSUES
Once you take ownership of the property, it becomes your responsibility to clean up any waste. This means if they've been using oil or kerosene to kill weeds along the fence line, even if there are no visible drums of chemicals, you might have an environmental issue.
CAN YOU GET & DO YOU NEED FLOOD INSURANCE
Do check on flood zones, just like you would for a home. Just because there are many other businesses in the area, doesn't mean it hasn't been flooded, won't be flooded, or that you can even get proper flood insurance easily, if the area has a history of flooding.
APPRAISAL WILL EXPOSE DEFERRED MAINTENANCE AND REQUIRED IMPROVEMENTS
A key aspect in deciding whether you even want to own the subject property is what maintenance issues exist, and which issues do or don't require or warrant repair. Before you get too far into the investment, invest in the commercial real estate appraisal, on your own dime. The bank wants to give you a loan. Even if the bank does an appraisal, it's your money and your credit, and you really need an appraiser working for *you* who provides a fully detailed report with considerations that could affect your investment. It's a mistake to skip this part to save a few bucks on such a large purchase.
LIKE CHOOSING THE RIGHT APPRAISER, CHOOSE THE RIGHT INSPECTORS
A commercial investment should not end up being a black hole of ongoing cost. While you're negotiating, things like a thorough pest inspection can give you extra relief, if there's a serious problem discovered. Think square footage, and the special cost often added to commercial real estate by contractors who work in this field. Choose quality and qualification over cost in being aware of what you're buying and what it might need. Likewise, once the appraisal is done and the inspections are done, you can take your own contractors for a walkthrough and get estimates on needed repairs or remediation.
Commercial real estate investment can be lucrative, if you've taken stock of the proper concerns and are ready to take them on. Don't hesitate to get consulting on this from a qualified professional. If you want appraisal consulting on a commercial property, or a series of commercial properties you're considering, we have the experience to take that on. Don't hesitate to call us.