IDEAS TO HELP AVOID APPRAISAL ISSUES

IDEAS TO HELP AVOID APPRAISAL ISSUES

Written by Hank Miller on Thursday, 26 September 2013 14:12

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Appraisals continue to be a potential issue with every contract; we expect this to worsen come the Atlanta spring ’14 housing market. What if agents and sellers calmly considered options before problems arose; took a step back to think ahead? What if instead of trying to fight a losing battle after a contract is submitted, appraisers were consulted prior to the event? What if sellers went in with something to legitimately challenge a low appraisal with? Like another appraisal?

Atlanta homeowners planning to list over the next few months would be very wise to consider the expected turbulence; we see a challenging market due to many factors. It is reasonable to assume that accurate list price will be critical; do you trust yourself or your agent to determine that? Are you a seller that expects to increase list price based on the media reports that “the market has improved and prices are up”? Do trends nationwide relate to your micro market? No. A staggering 77% of home sellers overestimate the market value of their homes, often deriving value in ways the market will not consider. Previous purchase price, money invested, assessed value, insured value, what I think, what my neighbor said....irrelevant. Home sellers should hire an independent appraiser in advance of listing. The benefits are many, a few include:

• An impartial review of the SPECIFIC micro market and trends therein
• An impartial opinion of value – find out what the home is worthbased upon legitimate comps
• A check against listing agents – you’ll quickly see if that agent has the data an appraiser has
• An impartial evaluation of the home – it will be looked at like an appraiser, not an agent
• A current appraisal can be used while marketing the home

Agents should consider suggesting and even including appraisals in their listing program:

• An appraisal can bring unrealistic sellers back to reality
• Listing price can be based on the appraisal, not only the agent’s opinion
• An appraisal can be given to the buyer’s appraiser, this can help establish credibility of the offer
• In the event of an appraisal issue, the appraiser can be consulted to help resolve the problem

Most appraisals start at $375+- and increase depending on the complexity of the home. It’s a good idea to inquire and ask if the appraiser will be willing to update it as needed or help out in the event of a low appraisal. The key is to be prepared and to trust the professionals. The requirement for experience cannot be overstated; sellers must hold real estate agents to the highest performance standards and verify everything, learn how to select a real estate agent.

Just as agents must be held to high standards, so should appraisers. Select an appraiser that's based in your local market, is active, has all appropriate data and provides references. There are dud appraisers out there just as there are dud agents; it's up to the public to raise the bar. And remember, an appraisal is an opinion of value; while it might be expected that there will be a narrow range there might not be. However, getting that bank appraiser useful and applicable information from another appraiser might be the ticket to a smooth transaction.

 

The market continues to toss in unexpected twists and turns, wise sellers will do well to stay out of the fray. Remember, when it comes to real estate transactions, boring is good. Hank Miller is both an active real estate broker and active certified appraiser in the state of GA.

 

Our sellers do not have appraisal issues...

TIPS FOR MAKING YOUR HOME MORE ENERGY-EFFICIENT

TIPS FOR MAKING YOUR HOME MORE ENERGY-EFFICIENT

Written by Robert Yoakam on Friday, 27 September 2013 00:35

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Reduce your energy bills, make your home more comfortable, and help protect the environment by making your home more energy-efficient. The best way to improve your home’s energy efficiency is by first targeting its envelope, which includes the walls, doors, and windows. The next step is to improve the energy efficiency of your home’s systems, such as its heating, cooling, and lighting systems. The following tips will help you transform your home’s energy profile and lower your energy bills.

Weather Strip Your Windows and Doorframes

Use weather strips and draft blockers to seal gaps around your windows and doors. Draft proofing can cut heat loss by up to 25%. If your windows and doorframes are old and leaky, however, you might want to consider replacing them entirely with energy-efficient models. The largest savings are associated with replacing single-glazed windows with ENERGY STAR-rated windows.

Replace Old Kitchen Appliances

Refrigerators guzzle more energy than most other appliances in the house. ENERGY STAR-rated refrigerators are about 15% more energy efficient than models that meet the minimum federal energy efficiency standard. If you choose a new certified model, you can save anywhere from $200 to $1,100 on energy costs over the lifetime of your fridge.

Replacing older washers, dryers, and dishwashers can also make a huge difference in your home’s energy profile. Your washer and dryer are the second and third biggest energy-eating appliances in your home. You could save approximately $135 per year by replacing a washer that is more than 10 years old with an ENERGY STAR-rated washer.

Dishwashers are one of the most expensive home appliances, but replacing an older dishwasher with a newer, energy efficient model can trim your utility bills and save you loads of water in the long run. According to ENERGY STAR, if you have a dishwasher that was made before 1994, you’re paying an extra $40 each year on your utility bills compared to owning an ENERGY STAR-rated model. Moreover, an ENERGY STAR-rated dishwasher will save 1,300 gallons of water on average over its lifetime.

Properly Insulate Your Home

Properly insulating your home will keep it up to 10 degrees warmer in the wintertime and up to 7 degrees cooler in the summer. The cost of insulating your walls, floors, and ceilings will pay for itself in the long run by lowering heating costs.

Proper insulation slows the rate at which heat flows out of your house in the winter and into your house in the summer, so less energy is required to heat and cool your home. When hiring a contractor to insulate your home, keep in mind that the contractor’s level of expertise is more important than the insulation material used.

Install a Programmable Thermostat

Just like you would flip the lights off before leaving the house for work, it’s ideal to turn your heating or cooling down before leaving your home. Install a programmable thermostat and set it so that it is at a higher temperature when you’re away during the day in the summer and at a lower temperature when you’re away during the day in the winter.

Plant Shade Trees and Shrubs Around Your Home

Planting shade trees and other types of vegetation in front of large windows outside of your home can block the sun as well as cold winds. The foliage blocks radiation from the sun that warms the house in the summertime, while in the winter, the bare branches let the radiation come through. Good landscaping can make a huge difference in the energy efficiency and comfort of older, poorly insulated homes, but the difference isn’t so noticeable in homes that are well insulated and have energy efficient windows.

If you’re looking for a homes for sale in Columbus, Ohio, get in touch with Rockford Homes. We are Columbus, OH homebuilders who pride ourselves in building energy-efficient homes throughout Central Ohio. The average Home Energy Rating System (HERS) rating of new homes we build is 63. In comparison, the typical new home built to code has a HERS rating of 100. The lower the number, the more energy efficient your home is. With Rockford, you can save over $1,000 per year in energy costs compared to a typical resale home and over $600 per year in energy costs compared to a typical new home. Contact us today for more information about our energy-efficient homes!

WHAT IS A BUYERS' MARKET?

WHAT IS A BUYERS' MARKET?

Written by Blanche Evans on Wednesday, 02 February 2000 18:00

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No matter what town you are living in or where you want to move, the home buying and selling market will be swinging toward one of two directions. Either it will be in a buyers' market or a sellers' market, or sometimes, a little of both.

Most real estate practitioners consider a typical market to be one in which homes take an average of six months to sell. REALTORS® keep track of this number by keeping up with the days on the market (DOM) of every home listed and sold. That means that in the MLS, there are likely to be at least six months worth of inventory (homes) on hand to sell for the number of buyers in the market. If the number rises above six months inventory on hand, then the market is swinging into a buyer's market. If it falls below, it is becoming a seller's market.

A buyer's market is one in which there are too many homes on the market for the number of buyers. Homes take longer to sell and prices fall.

Sometimes buyers believe that winter time is a buyers' market. Although it is true that there are fewer buyers, there are usually a compensating fewer homes on the market as well. Homes offered for sale during slower times of the year are generally aggressively marketed, and may not sell for a significantly lower price than they would if they were marketed in a busier period.

In the spring, a seasonal adjustment occurs, and more homes come on the market. Buyer activity picks up as families with children (still the single largest buyer demographic) buy homes so they can move during summer vacation. A buyers' market can easily exist in the spring, if conditions dictate - that there are more homes than buyers, falling prices, and longer DOMs.

Sometimes a buyers' market can be created that lasts for a long time. The exit of one or more major employers from a community, a natural disaster such as a flood or earthquake, or some other catastrophic event can affect home values in an area for years.

Seasonal or not, any time there are more than six months' inventory on hand, there is a glut of homes on the market. Whenever there is a surplus of homes, and prices begin to drop, sellers will work harder to attract buyers, including adding incentives such as owner-financing or a large "redecorating allowance."

As homes become more competitive, buyers realize that their interest is at a premium and they will increase their demands to sellers. Those nice chandeliers that normally would not be included in the purchase price of the home, now become a bargaining chip for the buyer. The buyer may ask the seller to provide a home warranty at the seller's expense, or for the seller to pay more of the closing costs than usual out of the settlement proceeds, or any number of other contingencies.

People who have occupied their homes for many years may be able to sell their homes at a profit in a buyer's market because they have built equity, but they will find that if they have performed little or no improvements the home will compare even more poorly with the glut of homes on the market and it will command bottom dollar.

Sellers who are in a must-sell position may take little or no profit from the sale of their homes, or may even be forced to take a loss. The homeowners who are most hurt by a buyer's market are those with little or no equity built into the home. If they are forced to sell, they may have to come to the closing table with cash to pay their mortgage off or allow the home to be repossessed by the lender.

The one certainty that can always be counted upon is that one side of the market will never stay on top forever. In fact, it can turn on a dime. The same area that remains depressed for a period of time can make a comeback as lower prices stimulate reinvestment.

Focus is on Congress

Focus is on Congress

 

The lack of progress in Congress on reaching an agreement on the budget and the debt ceiling was the focus for investors this week. The resulting uncertainty caused investors to shift to safer assets, which helped mortgage rates end the week lower.

 

After a week filled with market moving comments from Congressional leaders, the Republicans and the Democrats still appear to be far apart on bills for next year's budget and for raising the debt ceiling. If no deal is reached, some government functions may soon lose their funding. It is difficult to predict the degree to which this would impact the economy, but it likely would slow growth. Investors reacted to the uncertainty by selling riskier assets such as stocks and purchasing relatively safer assets including mortgage-backed securities (MBS). Since mortgage rates are mostly determined by MBS prices, rates improved.

 

Overshadowed by the impasse in Washington, the housing data released this week continued to show solid results. August New Home Sales rose 8% from July and were 13% higher than one year ago. August Pending Home Sales declined a little from July, but they were still 6% higher than one year ago. The Case-Shiller 20-city home price index was 12.4% higher than one year ago, which was the largest increase since February 2006.

 

 

Investors will continue to follow the budget and debt ceiling discussions next week. Friday's Employment report also will receive a great deal of attention. As usual, this data on the number of jobs, the Unemployment Rate, and wage inflation will be the most highly anticipated economic data of the month. Earlier in the week, ISM Manufacturingand Construction Spending will be released on Tuesday. ADP Employment will come out on Wednesday. ISM Services and Factory Orders will be released on Thursday.

 

Weekly Mortgage Update

Jobs Fall Short

 

A lack of US military action in Syria caused investors to reverse last week's safety trade, while mixed economic data was roughly neutral. As a result, mortgage rates ended the week higher.

 

Since Fed officials have tied future policy changes to the performance of the economy, investors have reacted strongly to incoming economic data. Nearly all of the data released ahead of Friday's Employment report wasstrong. The ISM Manufacturing and ISM Services data rose to multi-year highs. Construction Spending posted solid gains. Jobless Claims remained close to five-year lows. The Fed's Beige Book reported that economic growth remained healthy. In short, all signs pointed to a clear path for the Fed to begin to slow the pace of its bond purchases.

 

The final, and biggest, piece of the puzzle broke the pattern, however. Friday's highly anticipated Employment report fell short of expectations in nearly every area. This was bad news for the economy, but it was favorable for mortgage rates. Against a consensus forecast of 175K, the economy added 169K jobs in August, but the figures from prior months were revised lower by 74K. The Unemployment Rate unexpectedly declined from 7.4% to 7.3%, the lowest level since December 2008. Digging deeper, though, the details revealed that the decline was entirely due to people dropping out of the labor force rather than job gains. The labor force participation rate (the percentage of people able to work who are working or are looking for work) dropped to the lowest level since 1978. The Employment report caused investors to question whether the Fed will begin to taper its bond purchase program at its next meeting.

 

 

•	ISM Services increased to the highest level since Dec. 2005
•	ISM Manufacturing rose to the highest level since June 2011
•	Auto sales rose to the best level since Nov. 2007
•	The European Central Bank made no change in rates

 

 

Next week, the big day will be Friday when Retail Sales, PPI, and Consumer Sentiment will be released. Retail Sales account for about 70% of economic activity. The Producer Price Index (PPI) focuses on the increase in prices of "intermediate" goods used by companies to produce finished products. Import Prices will be released on Thursday. There will be Treasury auctions on Tuesday, Wednesday, and Thursday. The highly anticipated Fed announcement will come out on September 18.