The American National Standards Institute (ANSI) sets criteria for what can and cannot be included in the finished area total of a home. To be included in a home’s square footage, the area must be finished, accessible to other finished areas, and meet specific ceiling height requirements. The assessed value of a home is used to calculate property taxes, which may differ from the market value.
An assessment is the value assigned to a property by a tax assessor for property tax purposes, which determines the annual property tax bill. It is important to consider finished vs. unfinished areas, attached vs. detached spaces, and multi-level structures for accurate property assessment. A finished basement adds value to the appraisal, but it depends on the specific features of the home. If there are more than two floors, the assessment will include the third and upper floors based on the home’s exterior measurements and interior measurements.
The interior information of a property is essential in determining the estimate of market value. Without the actual information, estimates of the interior may not be accurate. The taxable assessed value is the taxable portion of the Total Assessed Value after Adjustment, which only displays when the Roll Status is Confirmed. Property taxes are based on land area and the value of improvements, which should already be known through building permit records.
📹 How Does A Home Appraisal Work?
Everything you need to know about how a home appraisal works, the timeline, and how to save an appraisal if it comes in too low.
Who is exempt from property taxes in NY?
Property taxes are assessed, but not all property is taxable. Some properties, like those owned by religious organizations or governments, are completely exempt from taxes. Others, like veterans and homeowners eligible for the School Tax Relief (STAR) program, are partially exempt. Most exemptions are offered by local jurisdictions, so it’s important to check with your assessor to determine the available exemptions in your community. Common exemptions include STAR, senior citizens, veterans, persons with disabilities, and agricultural properties.
How are property taxes assessed in Ontario?
In Ontario, the calculation of property taxes is based on the multiplication of the assessed value of a property by a tax rate, which is determined by the municipal government and the provincial government. The tax rate may vary depending on the classification of the property in question, which includes residential, multi-residential, commercial, and industrial properties. The proceeds from this tax are allocated to the funding of public education and the municipality.
Does a shed increase property tax in NY?
Building a shed doesn’t affect property taxes, but county assessment authorities monitor zoning permits. If a local tax assessor discovers a shed’s application, they may increase taxes. Don’t delay applying for a permit, as failure to obtain the proper permit can result in fines and even dismantling. Adding amenities or extensions to a shed may also increase its tax liability. Therefore, it’s crucial to obtain the proper permit before building a shed.
How do I avoid property tax reassessment in California?
The Legal Entity Exclusion prevents reassessment in transfers between legal entities, but the Proportionate Interest Transfer Exclusion can avoid reassessment for transfers to or from an individual to a legal entity. As long as the individuals and the legal entity have the same proportional ownership interests, real property will not be reassessed when transferred to or from the entity or the individual.
To avoid property tax reassessment, do not transfer real property from individuals to a legal entity unless the individuals have the same proportionate interest in the legal entity as they did in the real property. Instead, Mom and Dad should first transfer a 10 interest in the real property to Son (qualifies for Parent-Child Exclusion), then transfer the property to the LLC owned 45 Mom, 45 Dad, and 10 Son.
The Original Transferor rule can delay reassessment when one joint tenant dies and is survived by a joint tenant who is an Original Transferor. This exclusion applies when a joint tenant transfers real property to a living trust in which the other joint tenant is a beneficiary. For example, if A and B Joint Tenants form a revocable trust with each other as beneficiaries, A and B both become Original Transferors. When the property passes to the other upon the death of A or B, the real property is not reassessed.
In a purchase-sale transaction or in a trust distribution, transfer title to co-owners as tenants in common (“TIC”), and then transfer the property from TIC to Joint Tenants. The co-owners become Original Transferors if one of them dies, and if the co-owners had originally taken title as joint tenants and one died, the real property will be reassessed (unless another exclusion applies like Parent-Child or Spouse-to-Spouse). However, depending on the facts and circumstances surrounding each of these transfers, an assessor may apply the step transaction doctrine, resulting in a CIO.
How is square footage calculated in Cook County assessor?
The Assessor’s Office employs a methodology whereby the square footage of a residential property is calculated by measuring the exterior perimeter of the building, rather than the internal living space. Should one believe that the assessed value of their property is excessive, an appeal may be filed with the Cook County Assessor’s Office. The three principal grounds for filing a residential appeal are as follows:
Does a kitchen remodel increase property tax in California?
The addition of a home to an existing property will result in the addition’s value being incorporated into the existing assessment. Consequently, the existing home will not be subject to a reassessment for tax purposes. A remodel, such as the addition of new square footage or the construction of improvements such as a spa or swimming pool, will result in an increase in property tax.
How does Cook County assess property value?
The Assessed Value of a home is calculated after determining the Fair Market Value. For residential property owners, it equals 10 of the fair market value, while for commercial property owners, it is 25. The State Equalization Factor/Multiplier is applied to the assessed value, creating the Equalized Assessed Value (EAV). Exemptions earned by the home are subtracted from the EAV, and the Tax Rate is applied to the tax levies for the community. The total amount of property taxes owed is then calculated.
Who has the highest property taxes in Ontario?
The property tax rates in Niagara Falls have increased by 4. 57 percent, reaching a rate of 1. 552 percent. The city of London has the second highest property tax rate in Ontario, at 1. 57313 percent, while Sault Ste. Marie has the third highest rate at 1. 78914 percent. Notwithstanding the lowest property prices, Sault Ste. Marie has the highest tax rate.
What does square footage count?
It is a common practice to include closets in the calculation of a home’s square footage. However, there are instances where this is not the case. All spaces with walls, floors, ceilings, and heat are included in the calculation of the total square footage. In the case of unheated or unfinished basements, such as those in unheated basements, the overall square footage may not include such spaces.
How can I reduce my property taxes in Ontario?
Property owners in Ontario can potentially lower their property taxes by appealing their property assessment, providing evidence of comparable properties with lower assessments, or demonstrating that the assessment is inaccurate due to errors in the property’s details or other factors. Property taxes are fees homeowners pay to their local government, usually based on the assessed value of their property.
By appealing their property assessment, providing evidence of comparable properties with lower assessments, or demonstrating that the assessment is inaccurate due to errors in the property’s details, property owners can potentially save on their property taxes and reduce their overall property expenses.
Is it legal to live in a shed in NY?
Living in a shed legally is becoming a popular trend in real estate, as it offers a unique and affordable alternative to traditional living spaces. However, zoning regulations and codes may not allow full-time living in a shed. Obtaining a shed building permit is quick and easy. While not everyone has the luxury of a spacious, customized space, a well-built shed can be a new home that offers a comfortable and affordable alternative to traditional living.
📹 What Real Estate Appraisers Look at During an Appraisal!
Have you ever wondered what real estate appraisers look for when determining your home value? Let’s shed light on the …
Your voice is very soothing Kyle. I’m binge perusal your articles. Im a first time home buyer, pre approved for $400k but man, I don’t expect how tough the competition was buying house here in Washington state😩. There’s a lot of buyer due to low mortgage rates but not much house in the market, driving multiple offers for a house, about $20-40k above asking price .
I am waiting on the appraisal step right now. I offered $5k over the asking price with a $2k appraisal gap. I just wanted to note that not all types of loans will let you offer an appraisal gap, according to my lender. I’m glad mine does, because I didn’t know to ask about it. Also, my appraisal fee is $650. That seems a little high, especially for a house under 1,300 sq ft… in Mississippi. I was wondering if my lender could have price-shopped that a little more. Not sure how that works, and I’m too shy to ask at this point. Thanks for the info!
I’m going to echo Adam a bit in that I am an appraiser, and this article is a great 30,000 foot view of an appraisal. However there are a few things I feel should be mentioned. 1. A one mile radius works great in Urban markets, but in more suburban to rural markets distances will increase greatly. 2. Replacement Cost Estimate is the Cost Approach to an appraiser, and is GREAT in residential markets IF the appraiser actually knows how to produce one. 3. I will only provide the appraisal to the borrower IF the lender tells me to in writing. Otherwise, it’s the lenders job to get the appraisal to the borrower. Overall, great article.
Thank you so much for putting this information. I am about to make an offer as a home buyer. Question: If the appraisal price fell short of an accepted offer price, and the seller does not want to lower the listing price, would I be able to back out of the deal, getting the full refund of earnest money?
Currently under contract now… my realtor told me that the house was appraised at 4k more than purchase price. Then he said the underwriter may have an issue in regards to some external rot on the wooden siding. He said we could fix it quickly and have it appraised again. Now I’m confused… isn’t the underwriter just looking to make sure the appraisal came in at or above the sale price? Sound right to you?
Your 1 mile point isn’t really correct, you are supposed to be looking at the market for prospective buyers. While that could be a small neighborhood of similar homes, it could also be as large as an entire state for a specialty property. In rural areas a one mile radius would not work, and it wouldn’t be right to limit yourself to one mile even if the housing density is high. You have to ask yourself if a potential buyer would realistically limit themselves to a 1 mile area. The answer to that is most likely no.
You say that the appraisal isn’t an inspection, but then say that a major focus is on health and safety (including items that would need to be fixed before sale), which are code-related issues. That’s not their purview. Appraisers aren’t generally in a position to assess code violations. They’re just supposed to estimate what price will be reflected in the market.
theres a triplex that I want to buy but I know for a fact its not worth what they are asking should I still offer what they are asking and when the appraiser comes out and comes in low can I back out the deal or renegotiate the deal ?? I know ill loose my money on the appraiser but will it be worth it ? its a nice triplex but the guy who owns it bought it in 2018 for 365k he only put new windows into the property and now in 2020 only two years later he’s selling it for 575k ! Im from California its a hot market where I’m at but the comps my realtor pulled up are not supporting the price
Appraisers are supposed to be licensed. I paid for an appraisal on a refinance only for tax purposes. The lender ordered it but said it would of been waived. loan to value 250k on a 650k home. The first thing that was strange is now the lender is holding up closing because of length of time for the appraisal? I paid 650.00 for the appraisal and there was several errors like missing a 3 car garage for a 2 car and a walk out basement. They only listed 3 comps one several miles away. There are 2500 homes in my HOA in hot market all less than a mile similar plans. I feel they compromised the job because they were rushed and it would have no impact on the loan being approved. What is my recourse?
I found your articles very informative. I do want to add that now… 2 years after this article… a lot has changed in the appraisal profession. Increasingly appraisers are being restricted from doing independent appraisals by the GSE’s. WHAT? Yes… appraisers have to back into generally accepted GSE guidelines in order to not raise red flags… that means staying conservative, not giving listings weight in final value, making sure line, net and gross adjustments are within the 10%/15%/25% “best practices” – as they are not “guidelines” yet everyone uses them – including state board investigators. Then there’s the CU system. Appraisals better fit that and not raise any red flags. The result… a very UN-independent process where price increases are not generally tolerated by CU or GSE’s and where appraisals are forced to conform to pre-determined price ranges and ratios. And to think that the last crash appraisers were blamed for high appraisals. Appraisers can only report what is going on in the market – they do not control the market. Yet, blame is already being placed on appraisers. The GSE are now pushing the desktop appraisals with 3rd parties doing the inspections YET the appraiser has all the liability. They really do hate appraisers.
Update- right now here in Arizona appraisers are not entering homes, they are just doing drive-by appraisals. Also, how does the appraiser fairly take into consideration what the proposed sale price of the home while factoring the appraised value? Surely the lender discloses the sales contract to the appraiser. It’s discouraging knowing the appraiser is working for the lender and surely this affects their decision making.
Hey thanks for the content. I have a question on how to proceed. Currently my father is in charge of the mortgage and I saw he has a high int. Rate and we’re going to refinance with a lower rate. HOWEVER, my concern is about the appraisal. We plan on fixing the house but aren’t sure to do this before the appraisal as we may end up having to pay more for the house. Should we wait to do the home remodeling after the appraisal?
I have a house that needs refinancing. It’s gotta be worth over 85k it’s a cabin style on 2 acres. Things that worry me about appraisal. We are in the middle of remodeling. We inherited the home. We took out the old cabinets and right now have crappy ones, they work but there’s no countertop. The walls and ceiling and floor aren’t done. We have the materials sitting around as we slowly work on it. This week we put up part of the ceiling, it’s a very different design with wood paneling that’s going to take a while. The home doesn’t have any major issues. We need to finish the walls, we have them up and they need putty and paint etc. We’re only financing 30k. Im wondering your opinion on this.
Hi Kyle, my wife and I are refinancing our house and lowering our mortgage term from 20 to 15 year. The interest rates are so low that we can drop 5 years off our term and our monthly payments will actually be a little lower than what they are now. Problem we are having is we had to get an appraisal done and it came back lower then we thought it would. We were hoping it would appraise higher then it did to take the PMI off as well. We are not that far off from where we need to be. What are some things we can do to challenge the appraisal? The lady we are financing with said to find some comps that would support our claim that the appraisal should have been higher. We’ve been in talks with our realtor and she is helping with finding comps but what other things can we do to challenge the low appraisal? Thanks
Hey man great content like always, quick question i had my refi appraisal done today. When I bought my townhome in 2018 my Square feet was 1692. So he shoes up and says i dont need to measure the sqfeet I already have it. I asked what was the number he got and he said 1652! Then he asks if i had something different i said yes 1692 from when i bought initially purchased it. He said something about the stairs don’t count? Two story townhouse. He told me not to worry about it but thats like $3600 for those 40 sqft! Any suggestions/comments?
Question: so a FHA appraisal came to a full value but the same house did 14,000 lowe in a VA. Anyway I was play by my listing agent, I was play again by this same listing agent. Yes, got fired. Denied knowledge of whom the appraisal was on the FHA. Both stick for 6 month, but why a FHA comes to value but not a VA?
Can they use my supposed sales priced they doubled my appraisal based on that, iwas told someone called in or disclosed my sales priced, know in arbitration, but all the other properties around still have the original value, i think there trying to get me first then get them on the bases of my sales price
How do appraisals work if the seller is “Selling As Is”. We found our dream home a few weeks ago and this is the case with the seller. I am worried that since we will be first time home buyers that we will lose the home due to it being sold as-is. The home was used as a rental property and the renters did a number on the house and that is why they are selling it as is. PS love your articles they have been a wealth of knowledge for us as we try and move forward with the home buying process.
For a new home, we do not know the exact date of closing yet. It will be at least 6mo from now. My lender who has provided us the preapproval say that we have to pay the appraisal fee now t keep our loan application active. We have not finalized the final lender yet as we were planning to do loan shopping once close to our closing date in next 6mo. Is this a federal requirement to pay appraisal fee upfront to keep loan application active even if we do not have any idea of closing date. I would really appreciate your expert opinion. Thnak you
I just refinanced and had an appraisal today that was sent by my lender. Initially they did it when the house was empty and it was valued 23,000 over what we paid…my question is, is it normal for the apraiser to take photographs of everything? Our bedrooms etc? That’s all he did was walk around and take pictures of the room’s, it didn’t seem right to me. Is this normal?
Just watched another RE’s article after viewing yours just now. Her’s is also about 1 yr old. SHE states in her article, titled “if appraisal comes in lower…”. My question is, she stated that some lenders will just add the appraisal cost and can be paid at closing. I understand lenders’ may offer different choices. But the one thing she says that caught my attention is that the appraisal cost will be credited back to the buyer at closing. You don’t mention this in your article. Maybe it’s an oversight or again maybe some lenders will do it this way. Your article makes it seem as the appraisal cost is money paid by the buyer out of pocket and that’s final. Any clarification is appreciated. But these articles are over 1 yr old, so I understand if changes have occured. Really appreciate your content. peace, e.
Thank you for this article! i have a question. i almost got the house, but because of this crazy market time, we bid over the offer price about $25.000. after that, the seller agent asked my agent if we willing to pay if the home doesnt appraise? they said we have to pay the different price of this bid, $25.000. is it normal like that?
Consumers are NOT properly educated on how a good ethical appraisal protects them. There is an in-humane amount of pressure from lenders and realtors on appraisers that it’s more likely you have a shady appraisal if it DID come in at the contract-price. There is SO much more to an accurate appraisal than explained here. Appraisers are muzzled as the profession has been over-regulated and politicized. Hire an appraiser yourself ahead of hiring your realtor or involving a lender and THAT will give you the best shot at an accurate value. Price does not automatically equal value and NAR is such a big force, that good appraisers are leaving the business because they are black-mailed to “hit the number” rather than give an accurate, market supported value. It’s not just a random opinion, consumers are being misled and blindly following realtors who demonize any appraiser that doesn’t say “oh yes it’s definitely worth whatever your super smart realtor says it’s worth”.
I can tell you what I do as an appraiser on getting an assignment. I read through the contract of sale looking for any special terms or conditions that would make the property more or less valuable. And I will comment on any items that are not standard to a contract. Items like furniture, cars, boats, a home based business or other intangibles such as a property associated with a vacation rental property such a linen, cookware, the web site and good will for a going concern business. These portable/chattel and intangibles and are to be excluded in the appraisal. The lender just wants the land and improvements valued. Next I review the property’s past sales history and comment on how the market has changed since the property was last purchased or over the last few purchases. Then I will look at the median for similar properties in the last 90 days and see how the current offer falls within the range of similar properties. I will also look at the last sale of a similar property that occurred on the street and how market prices have changed since that purchase. Then I will look at the Sales to Assessment Ratio (SAR) for all properties in the area and comment on the subject property and its assessed value relates to the SAR. Only after doing all the above will I begin to select comparable sales in order to present a sample of the market that in my judgement captures the peculiarities of the property being appraised. Then I will reconcile all of this information taken from the market place to formulate a market value range that the property falls within.
Our appraisal is in a couple days. The problem (Or not) is that the house we are under contract with is very unique as it sits in a very historical location, close to a major university. However, there are no comps within a mile that have 6 bedrooms & 2.5 bathrooms on 4 levels. It also sits on one of 2, side by side lots that are used as one extra big lot. All the other homes are single or 2 story, 2 bedroom 1bath or, 3 bedrooms 1 bath (possibly & 1/2 or 2 in a very few) and sell for $120,000 to $160,000. So my question is simply this: “How can this unique home be appraised fairly?”
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Decent explanation. A few things to note: you want your property to conform to the general standards of the neighbourhood. Certain improvements or upgrades to the property do not always translate to the same ROI between different geographic areas. For example: adding a pool to your property in a neighbourhood where pools are in demand and purchasers are generally expecting a pool will be a worthwhile investment. In another neighbourhood, pools can be seen as undesirable due to the maintenance that comes along with them and can turn out to be a poor investment. The key is to conform. If you buy a non-renovated home in a neighbourhood where majority of the homes are renovated, chances are that you’ll be able to turn a profit from renovating and selling the property. Vice versa if you over-renovate your home, chances are that you won’t make back what you invested. Appraisers do not consider the living conditions of the occupants nor do they make any assumptions about the property based on the lifestyle of the residents. The condition of the property is assessed to the appraiser’s best ability while trying to overlook the clutter. Having a messy house can however interfere with the appraiser’s inspection and cause them to overlook a positive feature of the property which can lead to an unfavourable appraised value.
Got my appraisal done today. We accepted a 570k offer and asking price was 575k. We did get 2 offers for asking price but I didn’t care for the contingencies and accepted 5k less. Can’t wait to find out what it appraises for. The appraiser did say he was going to add 25k to the value for all the front hardscape that we did. Fingers crossed
I have a question, does the size of the lot your house is on make any difference in the appraisal? We have 1.99 acres and the appraisar compared our house to houses that had .58 acres or less….we also have a pond…we are surrounded by subdivisions that were built around ponds…and she wrote that our area is not in the market for houses with ponds…while our home was first built in 1947, an addition to the house was done in 1970 or so…all the comps she compared our house to was only similar to year, bedrooms, etc. The pond, the lot square footage were not comparable at all. I found 3 that were way closer in everything plus lot size however the appraisor would not change her “price”…wouldn’t you also want to include a lots square footage to be as similar to my house?? Thanks.
Thank you so much for your well informative articles 🙂 I enjoy perusal your articles. My offer got accepted yesterday and we will be doing inspection in a couple days! I’m Excited.. thanks again Andrew. I have been perusal many of your articles since I started looking for homes. You are a great agent. 🙏🏻❤️❤️
As a new buyer One of the biggest No! Is is cheap flooing vinyl, linoleum. This shows me somone tried to save money Like a flip Or it was last on the list On something you use everyday ..More white the better : Many times over have i seen a olive green toliet Or tub Pink, Black! And my first thought is well that will cost me to replace…Now your mind is on how much will each item you dont like cost you after you talk about the price of the house…White is clean And even if you want to replace something white It’s not a stand out eye sore. This also go’s for new baseboards I seen one place where the guy left the natural wood color Even patched up the little nail holes with wood dust and glue This stood out but in a nice way Even still You can paint over them in the future as your color to the walls etc Landscaping is another big deal People do not want to see what it could be in the future They want a wow factor And by simply flipping the dirt around the trees pulling weeds at the fence line, between the sidewalk Power washing the driveway wash down the door And windows, Always a welcome mat And fresh clean numbers of the address on the brick Two-Four-Five in scroll write is classy …A Appraiser may give you a worth of the home My tid bits prevent people thinking to look else where
This is a textbook explanation at best; it leaves out the glaring fact that adjustments are usually market-based; if a market review of a subject’s comparable dataset indicates relative appeal among homes that have certain material variances, an adjustment may not always necessary due to lack of support or proclivity in the market. Whilst there are some commonplace adjustments appraisers make for expected “credits or debits” for certain amenities; there isn’t simply “hard and fast” adjustments for everything. An appraiser will conduct market research, and should usually complete a paired sales analysis of the probable and actual comps to extrapolate if the market supports an adjustment for a certain material difference, technically speaking. Certified Residential Appraiser, NY & NJ est. 2004.
Great article Andrew. I have question to ask. I was a longtime EMT Firefighter and also owned my own construction company. Just over two years ago I had a major hand injury and two hand surgeries. The first Doctor messed me up and the second one tried to do her best to repair it. Didn’t work out well. Long story short, I’m not able to go back to my original jobs. I was looking at getting into appraisals. Can you tell me how to get started and how to approach bankers or real estate companies to get started. Or is there another way. Thanks.
I live in a very small PA town and want to sell my 3 bed 1 bath, 1350 sq ft home. There’s only 1 comparable home sold recently that matches sq ft, rooms and proximity. The other most similar comparables sold 1+ years ago. Would they use the homes that sold a year ago that are most similar to mine for a CMA? Or should they use homes sold in last 3-6 months that may have 200 more sq ft than mine with 1 1/2 baths, or with a single detached garage (mine has no garage), then make appropriate deductions to get a my home value? I’ve spoken to 2 agents and they each used different comparables. One suggested list price is $125,000, the other is $140,000. Thanks
Then you get back to your desk and it’s model comment, form filling time, time to create the facade. Most appraisers don’t even comprehend the theory of highest and best use and they violate USPAP on every report they produce with inaccurate reporting. Most of these reports are comprised of cleverly-quipped model comments that focus on satisfying the AMC and lender reviewers (their bread and butter or they lose their business) but these reports won’t stand a chance in a court of law by any seasoned real estate lawyer.
I would add the importance of pulling permits when required. When the market crashed in 2008 and money became tight bank appraisers in my area would verify with the municipality that all of the improvements including DIY improvements were properly permitted and inspected before they would approve the property for a loan. In some cases this results in the work having to be torn out and redone.
Andrew, As a retired residential appraiser and instructor, I take issue with your remarks made approximately between 2:10 and 2:25: Residential appraisers DO NOT arrive at a dwelling’s appraised-value by determining a specific “price-per-square-foot and then multiply by the number of square-feet of the house to arrive at a value. It doesn’t work that way. Of the three Approaches to Value found in a standard Uniform Residential Appraisal Report, none are as simplistic as you describe. An equally beneficial article would be one titled, more or less, “How to Identify an Improper Appraiser when he or she comes to your door.” When the appraisal appointment is set-up, prior to the visit, obtain the appraiser’s name and write it down. Verify that name when the person arrives at your door. It is not unheard of, for appraisers to send out trainees, unlicensed friends or family members, etc to do the actual inspection. If the “appraiser” at the door can’t produce a photo-ID, driver’s license or a business card with a matching picture, refuse entry and then notify the loan officer. If the appraiser’s identity is verified and is allowed to proceed, ask if they are working by themselves, or have an assistant. This is relevant to the amount of time spent performing a proper interior/exterior appraisal inspection. Working by myself, a typical suburban, 1500-1800sf single-family dwelling should take approx 30-45 minutes total. More time if it is a FHA appraisal and the attic needs to be entered.
I have always felt that maintaining my home or condo up is the single best thing I can do to make more money. When you need to move having to put the time and money into repairs THEN when you need the money for a down payment, sellers costs and moving costs just does not make good financial sense to me. You are also trying to find a new home, a new mortgage, packing etc.
If a house is appraised and the comp houses have say a price per square foot of $129.00 a (1 bed) to $160.00 a (2 bed) for the area and the actual house is appraised at the exact sale price with a square foot valued at $85.00 (2bed) on the appraisal. Why such a difference? FYI, the house appraised has new window’s roof and floors and new appliances, water heater.
Thank you, Andrew, for a detailed and yet quick article! Keep on doing a great job! Love your articles! Missing your real time articles. Perhaps, moving them to an evening time may bring more viewers, right? We all work and can not tune in at 1PM, but at 8PM (7PM) most of potential viewers may watch you for 30-45 min on Tuesday/Wednesday/Thursday night, right?
What real estate appraisers look at is the line on the contract that indicates what the buyer is paying and then that is the value that the home comes back at. To the PENNY! I have lived in TX, AL, SC, NC and CT if I offer $125,375.22 for a house and the seller accepts….. the appraisal will come back wth the house being valued at $125,375.22 – It’s a miraculous coincidence. Can you say “racket?”
I just found your YouTube article’s or website . I really like the information you give ! It’s down to earth, straight forward and honest ! Now that’s something I almost never say about a realtor, being honest !! Your information is true and very helpful to people who don’t have a clue or never really worked on houses, buildings or in construction ! I really like the way you tell it straight, which is rare and without a bunch of hipe !! You’re a realtor that I would work with if I were in your area . So I’ll keep perusal your articles to remind me on some things and things I’m not sure of as I’ve already learned something from one of your articles ! Keep up the good work !!
What about the hvac and water heater? You guys don’t care about that? I’m buying a house that I know for fact has a furnace thats putting out carbon monoxide. Does the appraisal say anything about it? No, theyre bitching about peeling paint and a piece of fascia that came off. And here’s the thing, the seller doesn’t want to fix it and if we want the house it’s up to us to fix it all. You guys don’t know shit about houses, you guys look over major thing and just see whats on the surface. Maybe I’m wrong and have just had a bad experience, idk. You guys a aggravating tho, im sure there are good appraiser’s out there but I don’t think the one we got is one of them.
I’m perusal this as we’re awaiting the appraisal results. They have up to two weeks to get it done and it’s so nerve-wracking. However, it is a new build with multiple similar builds (also new) in the same development. They’re all the same sq footage, all on an acre and all ranch style homes. There are a few different layouts with a variance of around two hundred SQ ft but each house costs the same as the one with the same layout. I’m going to assume that the developer knew exactly what the house was worth and listed it accordingly as so many people are moving into this new neighborhood/development/ranch community. 🤞
I know you are in NV, but I am in PA. I just have a question. I am one of two executors of a friend’s estate. She lived in a row home (her home is 1 of 6 homes that are connected together). It is a beautiful home, well taken care of. It is the only home of that row that has not been turned into apartments. I am just wondering if we should make any improvements or just sell “as is”. I have no experience in selling a home, because I rent. Because of covid-19, we haven’t been to court yet for her estate, so I’m just trying to find as many tips as possible. Thank you for your time!
“Comparable Sales Approach” is called the Sales Comparison Approach, at least in Florida. Minor knit pick, just wanted to say that. Edit: We usually look back up to 2 years for comps, for specialized commercial properties many times longer. We’ll sometimes apply a time/market adjustment based on age of the sale since the closing if needed. Added remarks: Since corona we’ve been very hesitant to even apply these time adjustments, as there have been very few sales since the pandemic, and thus we are wary to speculate on the market.
Hi could you advise the second bit of question -how this is going to create problems for risk appraisal underlying assets? below is the topic- The securitisation of property assets can lead to more liquidity in property markets but also creates problems of risk appraisal of the underlying asset.’ Discuss these problems in the light of issues that have arisen in recent global financial crises.
I have a question. My wife and I live in PA. We are in the middle of buying a permitted house with unpermitted and uninsurable guest house with plumbing, framing and electrical to it, in Hawaii. Anyways, we gave our lender the mls # with a full description of the property. He gave us loan terms with a monthly payment down to the cent….then…after the seller and us totally agreed on terms, I mean, everything….the lender comes back at us and needs an extra $17k up front and wants us to sign more loan papers…and we are still waiting for the appraiser to even show up. He said it will probably change from a second home loan to an investment property loan because of the number of structures. Andrew, is our lender crazy?🌈😃🤙
Andrew, why should I reveal the cost to the appraiser on what my repairs were? What if I’m an absolute haggler and can get the jobs done at 30% of what anyone else would pay? Sounds kind of impossible, but, not for me. I save 70 to 80% on my rehabs through relationships I’ve established in the Real Estate business. Please let me know what you would recommend? I don’t want the appraiser to say “Well you paid less then I’m used to seeing on this so I have to devalue that”.. I disagree with that. Please advise.
The mortgage inspection is to determine the observed condition of the property. Also known as diminished utility or depreciation. If the house is new or newer in date of construction then there will be only minor depreciation. The problem is to determine the rate of depreciation in older homes that have been remodeled, partially renovated or substantially rebuilt. Estimating that type of depreciation comes from experience in appraising hundreds of properties every year and knowing how to tease that data out of the comparable sales used in their sampling of the market. The appraiser typically provides three comparable sales that in the appraiser’s judgement would be appealing to the same purchaser for the property being appraised. Other appraisers may chose other comparable sales but as long as the sales sold at fair market value there should not be a significant difference in the appraisers’ opinions. A problem that can occur when using three recent sales is that one of them may have clauses in the contract that have an effect on value. Special terms or conditions that the appraiser is not aware of, that can throw off the final estimate of value. For example, if a developer is enticing buyers by including TV’s, airline tickets to Hawaii, or discounting the sale price if the new buyer completes the landscaping.
Our two appraisals came in with a $45,000 difference, less than 60 days apart. The first appraisal, Pre approved buyers, but the underwriters would not approve the loan because of buyers past debt. When the second appraisal came in 45,000 lower- what were we to do? It was negligent, the comps were not even close. They did not have the same additions or upgrades you mentioned that ARE valuable. Buyers decided to walk. It’s frustrating.
What if youve lived in the same little house for 16 years and you’ve accumulated 16 years worth of stuff there’s no storage. Your landlords did not do improvements along the way and now they want you to buy it because the house is paid for. What if you’re disabled and can’t get everything nice and clean? Does it matter to the person living there who is practically being made to buy it?
I appraised properties for 10 years and I would say that this explanation was very good. That said the reason why the 2008 crash happened was pretty wide spread, the mortgage companies are not to be trusted most people that work in that industry can be put in with the used car salesman mentality, in fact a lot of people move from selling cars to writing mortgages, it all depends on the economy. I wrote about this in my Expose that I sent to the White House amongst an array of illegal topics that were prevalent leading up to the 2007 2008 crash. Any honest appraiser could see this coming, I started sending and writing my paper 4 years before the crash.
This is a really great article. You just nailed it. I have one constructive feedback regarding your presentation on camera: You move a lot from side to side, up to down of the screen while speaking. This can be quite distracting for viewers. Otherwise, the technical contents of your website are outstanding! I just subscribed and hit the bell!