Some things I’ve seen lately in real estate

Today I wanted to share some of the small but interesting things I’ve seen lately while out in the field during appraisal inspections. All of these images help illustrate something about real estate.

1) Iron Bars & New Construction:

white iron bars on a newly construced house

Does anything catch your eye about this house? When driving through a two-year old neighborhood in Elk Grove, this property caught my attention because it’s literally the only house with iron bars on the front. I’m not saying there is anything wrong with bars or even that they adversely affect value, but they are definitely not typical for this neighborhood. It’s always important to consider that the type of fence or front yard presentation can impact value. Is this a positive, negative or neutral feature? Would it be a big deal if every house on the street had bars?

2) A fireplace chopped in half:

No fireplace

What’s the story here with this house on 12th Avenue? Maybe a recent attic conversion along with other additions? Or maybe a fireplace relocation? By the way, I asked a handful of real estate agents recently if they would ever recommend removing a fireplace and their response was overwhelmingly no. What do you say?

3) Loose straps

FHA water heater straps

Appraisers aren’t code enforcement officers, but they do know something about code for water heaters. While many conventional lenders do not require the appraiser to verify if the water heater is double-strapped (some do), FHA appraisers do need to ensure the water heater complies with local standards. In the instance above, the water heater was clearly not properly strapped since I shouldn’t have been able to easily fit my entire hand between the strap and the heater. And no, I’m not a hand model.  🙂

4) A “shocking” light switch location:

light swich inside shower

I was surprised to find this light switch literally inside of the shower. Do you think this might be a safety issue?

5) An appraisal in 1996:

ImageForSharing

This is a California Market Data Cooperative book from the 1990s. These books are full of charts of real estate sales information, and they used to be published almost monthly before sales data went online in 1998 through Metrolist in Sacramento. I have a stack of these books in my office right now since I’m doing a “Date of Death” appraisal based on a date in 1996. I’ll use these CMDC books to find comps, verify sales data and analyze market trends. It’s definitely a tedious process to establish a value this way, but I’m grateful these books are at my disposal thanks to my membership with the Real Estate Appraiser’s Association of Sacramento (REAA). Otherwise I was going to need to contact some long-time brokers to find someone willing to lend or rent me these books.

6) My backyard garden

Before and after of our garden

Lastly, this is personal real estate for me. I mentioned in the beginning of the year one of my goals was to finish the backyard garden that was supposed to be done last year. I’m pleased to announce that after ripping out 30% or so of my rear lawn last year, and then putting the project on hold for about nine months, I finally finished the job last week. I’ll be honest, it feels really good to check this goal off my list.

Have you seen anything interesting lately relating to real estate?

If you have any questions or Sacramento home appraisal or property tax appeal needs, let’s connect by phone 916-595-3735, email, Twitter, subscribe to posts by email (or RSS) or “like” my page on Facebook

5 things to let the appraiser know for a “Date of Death” appraisal

Dealing with logistics and paperwork after a loved one passes is not something anyone looks forward to doing, and ordering an appraisal is definitely a part of that. If you are in a situation where a loved one passed away, and you need an appraisal for the IRS (for tax purposes), here are five things to provide to the appraiser. I hope this is helpful.

5 things to provide for the appraiser:

  1. When was the date of death? (The appraiser will provide a valuation based on this date even though it’s a date in the past. This is called a retrospective appraisal).
  2. Who is your attorney or CPA? (In addition to the IRS, your CPA or attorney will usually be listed as a user of the appraisal report – unless that’s not relevant).
  3. Has anything changed about the house since the date of death? (The appraiser will be considering the condition of the property on the date of death, and therefore ignore any change in condition, upgrades or changes in the market since that date).
  4. When do you need the appraisal?
  5. When is a convenient time for the appraiser to do an inspection? (expect an interior and exterior inspection).

Date of death appraisal for IRS - Sacramento Appraisal Blog

Tips for hiring an appraiser: If you’re wondering how to hire a reliable appraiser, you may want to ask a trusted real estate agent for a referral or ask an appraiser the following questions to help gauge if the appraiser is familiar with your neighborhood or not.

  1. How long have you been an appraiser? Tell me about your experience.
  2. Are you familiar with my neighborhood market?
  3. How many appraisals have you done in my neighborhood over the past year?
  4. How familiar are you with “Date of Death” appraisals?
  5. How much do you charge?
  6. When can I expect the appraisal to be delivered?
  7. Will you deliver by mail or email?

Helpful Articles: You may also be interested to read What are “Date of Death” Appraisals? or When Should you order a Date of Death Appraisal? for further information. Pay close attention to the “Alternative Valuation Date” in the latter article in case you think the market has declined in value after six months of the death of the owner (This could help your situation if value is lower since the IRS allows you to use the lower value).

Do you have any questions or scenarios to share?

If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Twitter, subscribe to posts by email or “like” my page on Facebook

A model match mountain graph in Antelope

As a teenager I don’t think I would’ve ever envisionsed me saying this, but I actually like creating graphs based on research I do for my appraisals. I think plotting data visually can often provide a helpful context for clients and users of the appraisal to be able to see or interpret what has happened in the market.

A teepee or mountain graph: As an example, let’s view the past thirteen years of sales in the Northbrook neighborhood in Antelope for a particular single-story model (1943 sq ft). If you’re not familiar with this pocket of housing, it’s a smaller subdivision located west of Watt Avenue and just north of Elverta Road on the eastern side of the golf course. At one time the 1943 model was selling easily above $400,000, but today’s market has seemed to hover between $175,000 to $200,000 over the past year for a standard property without massive upgrades (there was one incredibly updated sale at $225,000 over the past year). I know such a hefty decline is hard to grasp, but values in this neighborhood are not anything out of the ordinary for the Sacramento area since most areas tend to be selling at 2000-2001 levels right now.

What does a graph like this say to you? What do you think it shows?

All Model Match Sales in Neighborhood - 13 years - Graph by Sacramento Home Appraiser - 530 pixels

By the way, I don’t always break down model match sales, but while preparing an appraisal in this neighborhood for the IRS, I thought a graph like this would really help to communicate clearly to my client since there were not too many sales around the date of the death of the owner (which is the date I used to value this property).

If you have any questions or Sacramento area real estate appraisal or property tax appeal needs, contact me by phone 916-595-3735, email, Facebook, Twitter or subscribe to posts by email.

Estate Settlement Real Estate Appraisals (Sacramento Region)

victorianpicThis is one of those things that many of us may not know much about until we actually experience personally. My hope in this entry is to offer a bit of insight into the process of estate settlement as it pertains to real estate valuation.

How it Works: When an estate has a transfer of ownership due to death, it is very common for a real estate appraisal to be needed for tax and/or inheritance purposes. Typically an attorney or accountant will order an appraisal during such a circumstance or have a family member or heir choose an appraiser for the job at hand. 

Retrospective Value: In these instances it is fairly typical for the appraiser to perform a ”retrospective appraisal”, meaning that even though the property is inspected today, the property isn’t valued off of today’s date, but is instead based upon a previous date (usually the date of death of the owner of the property). For example, if an owner of a property passed away on May 16, 2008 and the current date is March 2, 2009, the appraiser would inspect the property today but then base the value on what the market was doing on May 16, 2008.  

3764yRetrospective appraisals can be challenging in that the appraiser needs to decipher the trends and perceptions of market participants in a previous time period instead of whatever is happening right now (which could be completely different). In a market like today, if much time has elapsed since the death of the property owner, the difference between the retrospective value and today’s current value can be striking, huh. 

Other Types of Value: In addition to needing a retrospective value in situations like this, sometimes the ordering party will also request a current “as is” fair market value or value based upon the date the title transferred from the deceased to the heir (if the transfer was after the date of death).  Remember, every situation is unique and the type of appraised value required all depends on the particular needs of the estate. 

The Good News: If you are in a situation like this or expect to be soon, take assurance that the type of value is not something you have to spend time worrying about. A good attorney or accountant can help direct you toward the type of value they need for your estate. And a good appraiser will know to contact the attorney or accountant to clarify exactly what is necessary in case the owner or heir is not exactly clear. Your circumstances may be very difficult understandably, so the hope is that at least the professionals around you can help to smooth over some of the details like this so you don’t have to think too much about them. 

I am available for any questions at 916-595-3735.