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incorrect square footage

One reason to take the Assessor’s records with a grain of salt

August 26, 2014 By Ryan Lundquist 8 Comments

If the Assessor or Realist says a property is a duplex, does that make it a duplex? Not necessarily. Let me share a quick scenario to help illustrate the importance of taking what the Assessor says with a grain of salt. I recently appraised a property in Sacramento that is listed by the Assessor as a duplex (two houses on one lot). Upon inspecting the property though, the second dwelling was really an accessory unit instead of a full-fledged second unit. But more importantly, after digging around a bit I learned the secondary unit didn’t actually have any permits on file with the planning department or the building department. Granted, there was a fire in the 1970s at Sacramento County headquarters, so permits are incomplete at times, but still all signs in this case pointed toward the secondary unit NOT being permitted (despite Tax Records showing two units).

official records - image purchased by sacramento appraisal blog and used with permission - text

Moral of the Story: The Assessor doesn’t have the final say when it comes to what a property is and whether it is legal or not. In other words, just because the Assessor or Realist says there are two units does not mean there are actually two legal units on the property. Does zoning allow for two units? Were both units built with a permit? These are questions that are best answered from the planning and building department, so we need to give the most weight to what both of these departments say. On a related note, keep in mind Realist might also be incorrect about square footage, zoning, or bed/bath count, so be cautious about giving ultimate authority to what you see listed in Tax Records.

I hope this was a helpful reminder and maybe a good reference point when working with clients. Finding out what is actually legally constructed and allowable in terms of zoning takes work, but it can make all the difference, right?

Questions: Any thoughts on stories to share? Do you think a house with a non-permitted secondary accessory unit would sell for more in the marketplace? I’d love to hear your take.

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Filed Under: Resources Tagged With: Assessor, Assessor's Records, Building Department, incorrect number of units in Tax Records, incorrect square footage, official records, Planning Department, Realist, Sacramento County, Tax Records

10 things to double check after getting the appraisal report

July 26, 2012 By Ryan Lundquist 6 Comments

You have an appraisal in your hands, but did the appraiser do a decent job or not? What should you look for to measure quality? Here are some of the bigger factors to consider as you read over the appraisal report, whether you’re a home owner, Realtor or loan officer.

  1. Neighborhood boundaries in the appraisal reportNeighborhood Boundaries: Are the neighborhood boundaries listed in the appraisal correct? It can make a big difference if the wrong comps are used from inferior or superior neighborhoods.
  2. Comp Selection: Are sales in the appraisal report competitive to the subject property? Are they a good representation of properties a buyer might consider purchasing instead of the subject property? That’s what a “comp” is after all. Using the wrong comps is a good recipe for value issues.
  3. Adjustments: Are dollar adjustments in the appraisal report reasonable and based on the way buyers see the market? Or do adjustments seem off-base? For example, sometimes I see a $10,000 adjustment for condition to account for the total difference between a bank-owned fixer and a renovated arms-length sale. That’s suspect in my book (because it’s so low).
  4. squate-footage-on-appraisalSquare Footage: Is square footage in the appraisal report relatively similar to official records or to what you know to be true of the property? There are many reasons why it could be different, but assuming Tax Records has the correct gross living area, it’s important to double-check in case the appraiser mismeasured the house. This happened to an investor client recently and the appraiser had to re-measure the house (which added $5,000 to the value).
  5. Missing Items: Is there something the appraiser left out that might contribute to value? I’m not talking about the appraiser not mentioning your custom switch plates or the new light fixture in the kitchen, but something more notable that really carries some weight (barn, outbuilding, bathroom, bedroom, pool, etc…).
  6. Location: Pay close attention to the location of comparable sales in the appraisal report. Are any comps located on busy streets, near commercial properties or other adverse locations? Were adverse locations of comparables noted in the appraisal report? A neighbor recently showed me an appraisal on her house and I pointed out a few instances where the appraiser didn’t note comps backing to a main street with heavy traffic flow. Ignoring adverse locations can essentially produce inaccurate appraisals.
  7. Distressed Sales: Were only distressed sales used in the appraisal report? Did these sales appear to sell at a discount? If these foreclosure sales (or short sales) did sell at a lower tier of the market, did the appraiser account for the discount? There is often a price difference between distressed sales and traditional sales.
  8. Trends: Are market trends in the appraisal report accurate? For example, if the market has been going up, but the appraiser says the market is going down, that could present some issues with the final value. If the appraiser does not understand what is unfolding in the market, that could lead to bogus adjustments in the appraisal report.
  9. YodaUpgrades: Were all improvements listed in the appraisal report and accounted for in the final value? The appraiser won’t make a dollar adjustment in the report for every single update, but the final value should consider improvements. Keep in mind of course that not all improvements contribute to value. For example, a 10-ft Yoda statue in the backyard probably won’t be a huge plus (even though you think it’s awesome).
  10. Making Sense: Does the final value make sense in light of the comps in the report, adjustments, the neighborhood real estate market and the entirety of the appraisal presentation? The appraiser should have presented a case for value and explained why the value was reconciled to a certain level in the report too. If it’s not clear, it would be good to seek an explanation.

Should you challenge the appraised value? A trained eye used to seeing appraisal reports can quickly unpack these items, but this list might seem overwhelming to a home owner not used to reading appraisals. Ultimately, after looking through the report, and you feel there are red flags that watered down your value, you ought to consider challenging the appraisal (use this format in case it helps). However, you should only put together a “reconsideration of value” if you feel the value in the appraisal report is truly off-base. Remember to focus on big-ticket items too – not just spelling errors.

What issues have you discovered when looking at appraisal reports? Any stories, insight 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

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Filed Under: Appraisal Stuff, Resources Tagged With: appraisals in Sacramento, challenge low appraisal, comp selection, distressed sales vs traditional sales, Home Appraiser, House Appraiser, how to challege appraisals, how to read appraisal report, incorrect square footage, issues to look for in appraisal report, making sense of the appraisal report, Market Trends, Neighborhood Boundaries, quality appraisal, reconsideration of value, what should you be looking for in an appraisal

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First off, thank you for being here. Now let's get into the fine print. The material and information contained on this website is the copyrighted property of Ryan Lundquist and Lundquist Appraisal Company. Content on this website may not be reproduced or republished without prior written permission from Ryan Lundquist.

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The information on this website is meant entirely for educational purposes and is not intended in any way to support an opinion of value for your appraisal needs or any sort of value conclusion for a loan, litigation, tax appeal or any other potential real estate or non-real estate purpose. The material found on this website is meant for casual reading only and is not intended for use in a court of law or any other legal use. Ryan will not appear in court in any capacity based on any information posted here. For more detailed market analysis to be used for an appraisal report or any appraisal-related purpose or valuation consulting, please contact Ryan at 916-595-3735 for more information.

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