Man’s home never connected to sewer… Yikes!

Thanks to Sonja for tipping me off to this story. What type of problems might exist when a home is not connected to the sewer line for twenty three years? Might this impact marketability? Any health issues? Watch the video here to listen to a story from a Stanislaus County home owner (City of Ripon).

Let me close with a statement from the news story: “The problem has been repaired, but the sudden absence of regular “fertilization” may keep his lawn from looking so lush.”

If you have any real estate appraisal, valuation consulting, or property tax appeal needs, contact me at 916.595.3735, or via Facebook.

What do building permits tell us about the economy in Sacramento?

We hear so often about how new construction has basically stopped in the Sacramento area. Instead of just listening to a blanket statement though, let’s take a look at the actual trend of building permits in Sacramento County from 1994 through 2010. The information below is based on data from the United States Census Bureau for the number of permits pulled for new construction of single family residential properties in Sacramento County.

What do you see? Does anything surprise you? What happened between 2004 and 2005 to chop the level of permits in half? Do you think more or less permits will be issued in 2011? Do you pay attention to the number of permits pulled as an economic indicator?

If you have any real estate appraisal, valuation consulting, or property tax appeal needs, contact me at 916.595.3735, or via Facebook.

What do you think of this toilet?

I saw this photo in MLS a while back while doing research for an appraisal in Stockton. Yes, this is an installed toilet in the crawl space of a residential single family home. The photo was labeled “non-permitted toilet installation”. They say a picture is worth a thousands words, and that just might be true in this case. What do you think? I’d love to hear your comments.

If you have any questions, let me know. Call 916.595.3735, email me, or find me on Facebook or my appraisal website at

Four reasons why appraisals “come in low”

There is much discussion these days about “low” appraisals and even “Appraisal Hell”. Sure enough, these issues showed up again yesterday in an article on Reuters entitled “Special Report: What’s a home worth? Pick a number, any number“. I wanted to give a few comments about this article as well as some reasons why homes sometimes appraise for less than the agreed upon price between a buyer and seller. My two cents:

1) Price is too high:  Sometimes the agreed-upon price on a home is too high. If one buyer and seller agree to accept a certain amount for a property, the agreed upon price is not always consistent with market value. There is a real difference between price and market value because market value would gauge what a typical buyer would pay for a property, not just what one specific buyer is willing to pay. As appraiser Patrick Egger says, if you lined up 100 buyers to purchase a particular home, what would the majority of these buyers pay for the specific property? The answer to this question would probably produce a pretty good number for what the home is worth. But you might have a small pool of buyers who would be willing to pay far above asking price, right? Maybe it’s a “honey, buy this house at any cost” situation, friends or family live next door, or simply a high offer is presented to beat out all other offers. 

2) Really bad appraisal:  Let’s face it, there has been some very warranted scrutiny of the appraisal industry over the years, and especially since May 2009 when HVCC was implemented. Maybe the appraisal really was bad (inexperienced appraiser, out of the area appraiser, really quick shoddy appraisal, appraiser didn’t know the market and just guessed at value).  You know appraisals are an issue too when phrases like “Appraisal Hell” are coined to describe that place where Borrowers go when appraisal issues hold them back from getting a loan. However, it’s important to keep in mind that a “low” appraisal isn’t always due to a bad appraisal for reasons explained in this post.

3) Strict Lending Guidelines:  The article above gives a scenario where a couple paid for seven appraisals with different lenders before deciding to call it quits (because the appraisals did not come in high enough for their loan). My heart goes out to the couple for all the money they spent, but part of me wonders if there is more to the story. I wonder why the two appraisals at asking price were deemed suspicious by two different lenders. That’s a red flag in my mind, or maybe it’s just a testimony to hyper-regulation and lenders being finicky. But maybe the appraisals looked inflated for some reason too? Guidelines in lending have certainly become more strict in recent years, especially after the housing bubble burst.

4) Counter-offer to “No Man’s Land”:  Sellers sometimes counter the buyer with a higher price despite the buyer offering at asking price. At times this counter offer works out very well, but other times it might push the property into “no man’s land” (above market value). Many experienced local real estate agents are careful about this scenario as they work with their clients. In these instances, if the appraisal “comes in low” (below the higher accepted contract price), the value might not really be low, but rather indicative of where the sales price should have been. Of course sometimes properties are marketed at lower prices in order to get multiple offers quickly, and it’s not too surprising to see that market value ends up being above the original list price in many of these cases. Ultimately, it’s nice to be able to boost up the sales price and try to fit concessions or credits in a higher sales prices, but sometimes there might not always be room to do that.

In the past few months I’ve been hired multiple times due to bad appraisals. Usually a client or local real estate agent will ask me to do a full appraisal to help give the buyer a better sense of the market (this is usually when buyer’s are coming in with a more sizable down-payment than 3.5% – FHA). Other times clients will hire me as a consultant or reviewer (no value rendered) to take a look at the original appraisal they disagree with. My job in these scenarios is to  review the report and point out some things for the original appraiser to consider.

What do you think? What has been your experience with appraisals? What is your remedy to deal with a “low” appraisal?

If you have any questions or a need for an appraisal or consulting in the Sacramento area, give me a call at 916.595.3735, send me an email, catch me on Facebook, or see my company website at