NRVLiving - Real Estate. Simplified.

Appraiser Leslie Frantz Talks About The Current Market

On Friday, I had the chance to sit down with Leslie Frantz, owner/operator of Hometown Appraisal Services, here in Blacksburg.  Leslie and I have been chatting via email over the last few weeks about a changing marketplace's influence on appraisals.  In this video, Leslie talks about tightening lending requirements, and the importance of working with local professionals who know the market they're serving.

Here's another appraiser's perspective, from the Charlottesville market.

Ask Appraisal Questions of Leslie Frantz THIS WEEK!

I had a video session scheduled today with Leslie Frantz, owner and operator of Hometown Appraisal Services here in Blacksburg, and we FORTUNATELY had to cancel the appointment. 

I wanted to talk with Leslie about how the current market has changed her appraisals, and what she's seeing on a daily basis because, truthfully, if there's anyone that sees more homes in the New River Valley it's probably Leslie - this woman is BUSY!  I say that it's a fortunate delay for all of us, then, because it gives you an opportunity to ask Leslie questions directly ... are you a buyer in today's market, who just put an offer on your first home and are waiting for the appraisal to come back?  Or, perhaps you're a seller getting ready to put your home on the market, and want to make sure your agent has accurately analyzed the market ... regardless of your situation, if you have  questions for Leslie, email me (jeremy at nrvliving.com) and I'll do my best to work them into the next appointment with Leslie.  We're scheduled to meet later this week, so email them as soon as possible!

Capture The Home's Best Angle

The following topic was brought to my attention by a reader and former client now living in OH.  The post talks about a real estate appraiser who bought a home and then noticed later that the listing photos had been doctored to hide the existence of a power line.  The appraiser says he would have bought the home anyhow, but it still seems like the property was misrepresented. 

Deliberately obscuring something as minute as power lines seems like you're blurring the line between fact and fiction.  What do you think?

The Truth About Appraisals

Knowing the Guidelines Solves The Mystery - from Brandon Nicely, Alcova Mortgage.

The appraisal process often baffles consumers.  They may feel that their home is worth a higher dollar amount, and so the appraised value doesn't always make sense to them.  it is important to know that the appraiser is completely independent from lenders, buyers, sellers, and Real Estate Agents, and that the guidelines to which they adhere are dictated by the Uniform Standards of Professional Appraisal Practice (USPAP) and Fannie Mae.  In most states, the mortgage lenders must also disclose the purpose of the appraisal, as each transaction carries its own set of rules.

In essence, these important guidelines help appraisers put a fair market value on homes based on comparable sales in the same area, and the home must be bracketed in size and value.

For example, there is no set dollar figure associated with a great view, pool, spa, bathroom upgrades, etc.  If a homeowner installs a custom pool that cost them $30000, but the local marketplace supports the value of a pool at $15000, then that item will be bracketed as [$15000] on the appraisal.

Upgrades can usually be expressed at a higher percentage of their value in newer homes because the only way to obtain those upgrades was to put more money into the cost of building the home.  On the other hand, the upgrading or remodeling of an older home is rarely reflected in full in the final appraisal.  This is because typically 25049% of the project involves demolition and the fixing of issues that aren't uncovered until the project has already begun, such as plumbing or wiring that may need updating.

Ultimately, the value of the upgrades must be supported by comparable examples within the same marketplace.  These comparisons must be drawn from current market activity within the last six months.  This is a safeguard to prevent appraisers from attaching too high a value to the home in question, and opening up the appraisal for review.  This guideline further states that appraisers can only base their opinion on the value of homes that have actually closed escrow.