Posts from — April 2010

It’s my youngest son’s birthday tomorrow and it’s also the one-year anniversary of the Home Valuation Code of Conduct. People ask me all the time what I think about HVCC, so I figured on the eve of twelve months of HVCC, it would be appropriate to have a little discussion. In short, I think the Home Valuation Code of Conduct has been difficult for the appraisal industry, the consumer, and the real estate industry.

Appraisers definitely make less money now for loan work. I know, who cares, right? But listen between the lines because what if the government stepped into your industry and said you could no longer do business with clients you’ve had a relationship with for years. Many appraisers have gone out of business because their client-base was swept under the rug last year when HVCC was implemented.

Secondly, the consumer pays more for a real estate appraisal now. Under the direction of HVCC, appraisals geared toward Fannie Mae & Freddie Mac cannot be ordered directly by a lender or broker, but must be ordered from a neutral third-party (often times an AMC – Appraisal Management Company). These companies charge the consumer more than what an appraiser would typically charge, and many times pay the appraiser quite a bit less than what is customary in the market. There are some upstanding AMCs out there that I am thankful to do business with, but on the other hand it’s too bad to see some companies really taking advantage of the situation at hand. For example, I received an email yesterday from an AMC offering appraisers $125 for an appraisal order, while their website shows fees at nearly $500.

Lastly, HVCC has definitely impacted the real estate market. Since appraisers cannot be chosen directly by lenders, loan officers or brokers, the best appraiser for the job may no longer be hired. One might make the case therefore that there is a serious issue right now with the quality of real estate appraisals because of less experienced appraisers being hired to complete appraisals they are not as qualified to do. That’s definitely the case, but on the other hand I also think HVCC has been a bit of a microscope to the appraisal industry in some regards because it has illuminuated some shoddy work in the appraisal field.

Ultimately, I’m thankful that HVCC only applies to loans geared toward Fannie & Freddie (HUD/FHA has something similar in place now too). I still do many appraisals for investors, Realtors, and home owners, and these types of valuations are NOT affected at all by HVCC. Of course I’m not immune to some of the consequences of HVCC as I mentioned above, and the whole thing upsets me, but I’m choosing to focus on other things. I may be limited in business right now with what I can do for loan appraisals, but I can still chase other avenues of appraisal work such as bankruptcy, divorce, estate settlement, investor valuations, and assignments from local governmental agencies. In fact, just yesterday I had another Sacramento estate settlement retrospective appraisal come my way.

I know this almost sounds like a positive spin, but there is something philosophical here for me because it’s about focus. HVCC has been a sincere difficulty, but focusing all my attention on it and being negative won’t do me any good (and it won’t pay the bills either). Therefore HVCC won’t define me today, and it won’t be fuel on the fire tomorrow either on the one-year anniversary. Tomorrow I’ll be burning some hot dogs on a grill, enjoying the company of family as we celebrate my youngest son’s birthday, and intentionally not focusing on HVCC.

I’d like to hear from you as a real estate agent, consumer, or appraiser. How have you seen HVCC impact the real estate market over this past year?

The question “How is the real estate market doing?” usually deserves more time than just 30 seconds. There’s definitely background research, information, and experience needed to answer this question properly. 

I wanted to take you through (in part) how I get this answer as a Certified Real Estate Appraiser in the Sacramento area. In the video below (or HERE) I analyze a portion of the Lincoln Crossing community in Lincoln, CA, and I’ll show you what goes on in my mind as I crunch numbers and explore the local market. I hope this video is helpful.

Did you know that beginning January 1, 2011, newly constructed single family homes in the State of California will need to have fire sprinklers installed? It’s true. A few days ago a story posted in the Sacramento Business Journal, but this news first broke a few months ago. According to the National Fire Sprinkler Association (yes, there is such a thing):

“The State of California has adopted building code changes that will require all new one and two-family homes and townhouses built in the state starting January 1, 2011, to be equipped with life-saving fire sprinkler systems.”

Do you think this is a good move? As a prospective home owner, would you favor a property with fire sprinklers? How much do you think this will raise the cost of a new home?

I get this question from time to time, and this appraiser in Michigan has a fantastic video to explain the difference between a “manufactured” and “modular” house. There is confusion in the real estate market about this as I constantly see “manufactured” and “modular” interchanged in MLS. They are not the same thing though. See the video below or HERE.

This video is very good and comes from Blaine Feyen. Mr. Feyen is the president of Real Value Group, a real estate appraisal firm located in Grand Rapids, Michigan. www.RealValueGroup.com.

I hope you enjoyed this resource and found it helpful for you.

What is the lowest-priced sale in MLS over the past 90 days? Can I get a drum roll please? The winner is $5,000. No, that’s not a typo.

1628 8th Street in Livingston is a 2-bedroom 1-bath single family detached property and it sold for $5,000 on 2/05/2010 as a bank-owned fixer. The Listing Agent stated that this ”property is unfinished”, which probably means it is completely gutted or has some very serious damage. The photo certainly shows that the shell of the house has some major work needed. Sometimes properties near this price level have “unknown blackish substances” in them too, though not always.

Just in case you are wondering, this price level is not typical for the Sacramento Region or Central Valley. This is indeed the bottom of the market. Over the past 90 days there were only a total of 10 single family detached properties that sold under $20,000. For reference, here is a graph of all sales under $20,000 over the past year based on information in Sacramento MLS (this covers many counties surrounding Sacramento).

I ran into an acquaintance at Starbucks recently and we ended up having a very brief conversation about the real estate market in Sacramento. This friend of a friend just happened to be spending some time with her Realtor, and while waiting for our drinks to come to the bar, the Realtor asked me, “So how is the real estate market doing?”

We literally only had about a minute to talk, and like usual I find that it’s no small task to truly sum up the happenings of the real estate market in only sixty seconds. I suppose technically real estate market conversations can be treated like some sort of a speed-networking introduction, but my sense is that this type of exchange is really best for sitting down over coffee instead of waiting for coffee. Nonetheless, I had the brief conversation of course, but I found myself wishing for more time to realy grapple with different facets of the market. 

I mention this because I have quite a few visitors to this blog every day (thank you). People type in questions in a search engine to find answers to what they are looking for. So I say to you, if you have questions about the local real estate market, appraisal standards, FHA, a particular neighborhood, property taxes, or any other topic you might find on my blog, I just wanted to let you know I’m accessible.

You can reach me at 916-595-3735, ryan@LundquistCompany.com, on Twitter at @SacAppraiser, YouTube, Facebook, or in the form to the right or below. Please contact me for questions, discussion, or if you are in need of my appraisal or property tax appeal services.

By the way, does anyone keep an app on your phone to find coffee shops, whether Starbucks or something else?

I had the pleasure this morning of touring a SMUD Energy Efficient Remodel Demonstration Project at 3893 32nd Avenue in Sacramento. This house was purchased as a bank-owned heavy fixer and then rehabbed by Housing Group Fund into a pristine and very energy-efficient home.

I made a video to give you a sense of what I saw. See below or HERE. What do you think? Have you ever heard of Quad-Lock before?

Home owners and real estate agents ask me property tax questions all the time, so I figured it would be helpful to make a video to answer some of the most common questions. In the video below or HERE I walk you through the calendar year of events and deadlines surrounding reducing your property taxes so you can know what to expect throughout the year. 

Common Questions Covered in the Video: When is the best month to appeal property taxes in Sacramento or another local county? What date does the Assessor base my property value on? Why is it not a good idea to respond to the “reduce your taxes” mailers in February and March? When do new assessed values come out in Sacramento and surrounding counties like Placer? Why does the Assessor have a positive publicity campaign before releasing new assessed values? When is the deadline for disputing property taxes?

Please see www.SacramentoTaxAppeals.com for additional information and let me know if you have any questions. You can use the “Contact” page on the website to let us know about your property so we can do FREE research to determine if there is any potential savings for you on your property tax bill. You may also call 916-595-3735, or email info@SacramentoTaxAppeals.com. Thank you.

Do you have any questions about property tax appeals? In your experience, has your local Assessor valued your property correctly over the years?

A local real estate broker and friend, Keith Klassen, did something pretty cool today. This made my day!!! Along with his wife and kids, the Klassen tribe decided to go and “raid the sock aisle” at a local store in Sacramento. This is to benefit Project 680, which you know I am a part of and have been talking about lately. The Klassen family generously purchased 132 pairs of socks for the upcoming Project 680 Sock Drive. Our goal has been to raise at least 2000 pairs of socks for local homeless students in the Folsom Cordova Unified School District, so 132 pairs is a really fantastic dent toward meeting this goal.

Isn’t it so wonderful to see how the Klassen kids were so intentionally involved as decision makers in this video? Way to go Keith.

Make sure to visit Keith’s website below. Thanks everyone!!!

Keith Klassen
Real Estate Broker
916.669.9030
www.KlassenandAssociates.com

Did you play with legos as a kid? I used to build lego houses and cars all the time, but nothing like what you’ll see in the video below. I first saw this on Twitter thanks to Heather at @RosevilleRockLn of  www.rosevilleandrocklin.com. It’s interesting too to hear three different valuations for this property from real estate agents and an artist.

What do you think?

A few weeks ago KCRA news anchor Diedre Fitpatrick filmed some of the Project 680 team “Raiding the Sock Aisle” at Target in Rancho Cordova. As you’ll see in the video, “Raiding the Sock Aisle” was coined by Erin Attardi. The story turned out really great. I love how it highlights the simplicity of making a difference in the community, our goal of collecting at least 2000 pairs of socks, and how social media can be used to advocate for local homeless kids too. Great job team!!! See the video below.

If you’re interested in www.project680.org, let me know. You can read more about the sock drive and community bike ride HERE.

If you are on Twitter, we are using “#bikingforsocks” as our official hashtag for the upcoming sock drive / bike ride. You can follow Project 680 on Twitter at @project680 and become a fan on Facebook too. Don’t forget to follow those in the video too: Erin Attardi at @erinattardi and Geoff Sakala at @rcpost and Diedre Fitzpatrick at @fitztweeter.

By the way, it’s cool to see that the Sacramento Association of Realtors highlighted Erin’s involvement in a story entitled “Sacramento Realtors in the News“. It’s great to see too how Real Estate Appraiser Tips put up a post entitled: “California Appraiser Ryan Lundquist on KCRA Sacramento News For A Good Cause“.

This is very cool, and I encourage you to come check it out, especially if you work in the real estate field. SMUD has a fantastic demonstration next week on one of Housing Group Fund’s rehab properties. A home at 3893 32nd Avenue in Sacramento is part of the SMUD Energy Efficient Remodel Demonstration Project, and it’s going to be showed off next Tuesday, April 20, 2010 from 11:00am-2:00pm. 

SMUD claims that the state-of-the-art technology in this house can save up to 60% off utility bills (up to $1,500 per year in utility bills for the home owner). SMUD also offers some pretty amazing rebates for customers.

Free lunch is provided to Realtors. I’m planning on going and capturing on video some of the nifty features SMUD has installed on this house. If you’re in the real estate field, maybe I could interview you while at the property. It should be exciting to see how SMUD has outfitted this home to be more energy efficient.

At the site, you will:
·      See what a whole house energy efficient remodel looks like
·      Learn how your clients can save up to 60% off utility bills
·      Talk to SMUD Reps about new rebate programs
·     Learn about the most advanced energy efficient measures and technology

Call or email Dennis Lanni with the Sacramento Associaton of Realtors Housing Opportunity Committee. 916-826-1681 or dennis [at] housinggroupfund [dot] com. Download a flyer HERE (pdf).