Thursday, February 5, 2015

The Difference Between a Home's Cost vs. Price

As either a first time or repeat buyer, buyers must not be concerned only about price but also about the ‘long term cost’ of the home. I know I have discussed this before; let me explain:
There are many factors that influence the ‘cost’ of a home. Two of the major ones are the home’s appreciation over time, and the interest rate at which a buyer can borrow the funds necessary to purchase their home. The rate at which these two factors can change is often referred to as “The Cost of Waiting”.
nationwide panel of over one hundred economists, real estate experts and investment & market strategists project that home values will appreciate by almost 4% by the end of 2015. Additionally, Freddie Mac’s most recent Economic Commentary & Projections Table predicts that the 30-year fixed mortgage rate will appreciate to 4.5% by the end of 2015.

Here is a simple demonstration of what impact these projected changes would have on the mortgage payment of a home selling for approximately $250,000 today:

Please e-mail me, if you would like to know more about this, just use the Contact button in the upper right corner.

Monday, January 19, 2015

What Is a Property Appraiser?

As previously Published by Alison Shuman  On September 08, 2014 
Property appraisers are generally referred to as Real Estate Appraisers. This is a category of real estate professional that determines the value of real estate. This is a heavily-regulated industry, with oversight at both the state and federal level.
Different Types of Property Appraisers
Three types of appraisers are recognized:
·                 General
·                 Certified Residential
·                 Licensed

General appraisers can appraise any and all types of property, and are most likely to work on commercial valuations. Licensed appraisers have the lowest-level licensing status and have less formal training than either General or Certified Residential appraisers. Licensed appraisers have more restrictions on the types of property they can value, and fewer and fewer lenders will engage appraisers at this licensing level for service.
The typical appraiser engaged by a lender to value property for a real estate transaction is Certified Residential.

Appraiser Licensing
Real Estate Appraisers are licensed by individual states, with federal oversight by the Appraisal Subcommittee (ASC). Eligible appraisers are listed on the National Registry which is a database maintained by the Appraiser Qualifications Board (AQB) containing the names and licensing status of State Licensed, State Certified Residential and State Certified General Appraisers who are eligible to perform appraisals in connection with federally-related transactions.
In order to become a licensed property appraiser, individuals must meet a strict set of criteria which includes classroom education and on-the-job training as a trainee.
Appraiser Training
Before a trainee can be sponsored by a more experienced appraiser, he or she needs to first complete classroom-based training (or online training) that covers:
·                 Basic Appraisal Principles (30 hours)
·                 Basic Appraisal Procedures (30 hours)
·                 15-Hour national USPAP or Equivalent (15 hours)
In addition to classroom-based training, new appraisers are trained in the field by more experienced appraisers that hold a licensing level of Certified Residential or General.
In-the-field training of 2000 hours over 12 or more months is required before being licensed. In-the-field training of 2500 hours over 24 or more months is required before becoming a Certified Residential Appraiser.
Once the training has been completed, the applicant must sit for a long and comprehensive exam as well as undergo an oral exam. Each state maintains a website with information about licensing requirements, training requirements and exam information.

In-the-field Training
Appraiser trainees go out in the field with their sponsors. This means they visit property to be valued and perform certain tasks, including:
·                 Measuring the dwelling and any outbuildings
·                 Making a diagram of the measurements of the building(s)
·                 Taking photographs inside and out
·                 Evaluating the condition and the quality of the improvements
·                 Evaluating any external influences that may affect value (train tracks, power lines, commercial property, busy roads)
·                 Evaluating the neighborhood

In-the-office Training
In addition to going out to visit individual properties, appraiser trainees perform additional tasks to assist their sponsor (supervising appraiser) with valuing property:
·                 Pulling aerial maps
·                 Reading flood maps
·                 Looking up zoning information
·                 Looking up ownership information
·                 Researching transaction histories
·                 Determining market characteristics (increasing, decreasing)
·                 Entering data into the report
·                 All of these tasks are part of learning to become a licensed property appraiser.
Why So Much Work?

Property appraisers go through a lot of training to make sure that when they become licensed, they have the knowledge and skills to properly evaluate the value of real estate.