I met up with Realtor Steve Ostrom today to talk about what’s been happening in the Sacramento real estate market. Steve focuses on Roseville and Rocklin, but he also lists properties all over Sacramento. He sits on the Board of Directors at the California Association of Realtors and he really knows his stuff. Steve and I talked about inventory levels, multiple offers, distressed sales, flippers and more. The main question was, “What’s happening in the real estate market?” Watch or listen to our conversation below (or here) to get a glimpse of how the market has felt lately in the Sacramento area.

What do you think? Have you seen something similar? Why do you think inventory has been down?

By the way, this video marks the debut of my beardless look for 2012. I suppose it’s a resolution of sorts, but I decided it was time for my “distinguished” beard color to go away – at least for this year. Since shaving the gray, not one person has said, “Ryan, you really shouldn’t have done that,” so I know it was the right season to let the razor win. I know you don’t come here to hear about my face, but I just wanted to put this out there publicly so there is some internet accountability in case you see a beard creep back into my life this year.  Anyone make a similar resolution?

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.

Did you try to get a loan or sell a property but had appraisal problems? I hear all the time from real estate agents, home owners and investors about bad appraisals that killed their deals. What can you do about a “low” appraisal? Honestly, not much sometimes, but you can at least write a well-reasoned cordial letter to the lender to ask the appraiser to reconsider the value in the report based on support you offer in a brief letter. I’ve seen some clients have success with the points I explain in the video below when they legitimately do have a “low” appraisal. When I say “low” too, I’m not talking about a value that is lower than the sales price because we all know market value and price are not the same thing. I really have in mind an appraisal that is truly botched and plain bad. By the way, you can read a blog post about challenging low appraisals in case the video is not working for you.

I’d like to hear about your situation with a “low” appraisal and what you did about it. How did the appraisal impact your deal?

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.

I am looking at an appraisal on my desk right now where the appraiser drove from Fresno to Mather to complete the appraisal. Google Maps estimates the 178-mile trip would take 3 hours and 10 minutes (that’s only one way – 356 miles roundtrip). This distance is a very long way to go for a standard tract home inspection, yet technically acceptable so long as the appraiser truly knows the local market. Keep in mind the roundtrip in gas would’ve cost about $45.00 based on 30 mpg.

In this case it’s questionable to think the appraiser understands the local market. There is no mention of ”Independence at Mather” being a PUD with a monthly HOA fee. In fact, the appraiser says there is no HOA fee. There is no mention of the neighborhood being located within close proximity to the Sacramento Speedway or Mather Airport (formerly an air force base that is a Superfund site). The appraiser probably didn’t know portions of the neighborhood were formerly military barracks before new houses were built by SHRA and KB Homes. The appraiser was likely not aware of Aerojet, the meat rendering plant nearby, the limited amount of commercial properties and future plans with the Anatolia area. The appraiser most likely was not aware that Mather is not a city or CDP, but rather an area of Sacramento County.

I don’t bring this up to toot my own horn, but only to say that it’s important for an appraiser to know the local market well. This is called geographic competency. When you hire an appraiser, ask him if he has experience in your area and if he understands issues that may impact real estate values in the local neighborhood. Unfortunately there is very limited control over hiring a local appraiser for a loan, but home owners, attorneys and agents can still pick their own appraisers for estate settlement, divorce, bankruptcy, pre-listing, tax appeal, etc…

Questions: How do you think it might impact value on an appraisal report if the appraiser does not know the local market? If you are an agent, do you find most of your appraisers lately have been local, or are they coming from far away?

If you have any questions, or real estate appraisal or property tax appeal needs in the Greater Sacramento Region, contact Lundquist Appraisal by phone 916-595-3735, email, Facebook or subscribe to posts by email.

An empty pool might seem like no big deal, but it doesn’t do much to propel a loan forward because of the challenges it presents. What are the risks?

1. Someone can fall in and break a [fill in the blank].
2. Standing water is an invitation for mosquitos, which then increases the risk for mosquito-transmitted diseases such as West Nile Virus. 
3. The swimming pool could sustain damage from not being filled over time. 
4. Lastly, how can you really know if a pool is working properly if it’s empty?  

I recommend talking with a trusted loan professional to understand specific lending guidelines, but I will say in light of the risks above, most lenders will want to see pools filled and functioning properly because of the health and safety risks associated with an empty pool. I’ve had a couple of instances lately for both FHA and conventional loans where my client wanted me to head back out to verify repairs were made to a pool (after I noted green water and/or missing pool equipment). I am not a pool specialist of course, so I am very careful about what I can and cannot verify as a real estate appraiser.

I’d be curious to hear your experience with pools and real estate, and also if you have any other risks to add to the list above. 

If you have any real estate appraisal, consulting, or property tax appeal needs in the Greater Sacramento Region, contact me at 916.595.3735, by email, on our appraiser website or via Facebook. 

Why is there sometimes a huge difference between what the Assessor says a property is worth and what an appraiser says? I’ve included five points below to help answer this question.   

Base year value: Assessments in California are based on the year the property was purchased (“base year value”). If a property was purchased in recent years, the assessment might be similar to current market value, but if a property was bought in 1980, for example, the assessment could be significantly less than what the property is currently worth since property taxes are only allowed to increase by 2% annually according to Proposition 13. 

Mass-appraisal process: The Assessor’s Office uses a mass-appraisal process that comes up with a value based on crunching numbers behind a desk. This process is not able to account for condition, quality of construction or other issues an appraiser is able to see in person.

Assessments may be outdated: When the market changes rapidly, the Assessor’s Office may or may not stay on top of market movement in all cases. For example, in the past two weeks I’ve done research for several Sacramento property owners and their assessed values were literally hundreds of thousands of dollars too high. 

Assessment figures are based on January 1: Property tax assessments are based on January 1 of the given year (date of assessment), whereas an appraisal could be based on any date.   

An assessment is not market value: Assessment figures are not the result of the interaction of buyers and sellers in an open market, so they cannot be considered to demonstrate “market value”. This is one reason why appraisers do not use the assessed value on a property as a ”comparable” in an appraisal report. Read Fannie Mae’s definition of market value here. 

All things considered, can you see why there might be a difference between assessed value and appraised value? This is exactly why appraisers don’t give weight to tax assessments during the appraisal process and why lenders do not lend on tax assessment figures. Let me know if you have any questions or insight.

If you have any real estate appraisal, consulting, or property tax appeal needs in the Greater Sacramento Region, contact me at 916.595.3735, by email, on our appraiser website or via Facebook. 

When you think of certain neighborhoods in the Sacramento area, what comes to mind when hearing about Oak Park, The Fab 40s, Empire Ranch, Del Paso Heights or Granite Bay? In laymen’s terms some might categorize particular areas as desirable or undesirable, rich or poor, or ultimately good or bad. But descriptions like this will quickly send appraisers to Fannie Mae’s naughty list.  

Fannie Mae frowns upon the following language (taken verbatim from the Fannie Mae Selling Guide 3/31/11 Part B, Subpart 4, Chapter 1). 

Unacceptable terminology for appraisal reports includes:
- pride of ownership, no pride of ownership, lack of pride of ownership
- poor neighborhood
- good neighborhood
- crime-ridden area
- desirable neighborhood or location
- undesirable neighborhood or location
- other subjective terminology that can result in erroneous conclusions is equally unacceptable

Fannie Mae is determined to ensure appraisers stay objective about the criteria they use to describe and value property. Appraisers need to not let their personal opinions, beliefs or subjective judgements about certain neighborhoods influence the content or outcome of an appraisal. In addition to the above terminology, appraisal forms designed by Fannie Mae state on the first page that “race and racial composition are not appraisal factors.”

For the record, it’s my true joy to serve clients on all ends of the economic and social spectrum – and to show respect and dignity no matter what neighborhood I am working in on any given day. This is exactly why I remove my shoes when entering all houses no matter what the zip code (well, unless the carpet is filthy of course).

What do you think of Fannie Mae’s “naughty list” of words? If you are a real estate agent, I’d be curious to hear your take too.

If you have any real estate appraisal, consulting, or property tax appeal needs in the Greater Sacramento Region, contact me at 916.595.3735, by email, on our appraiser website or via Facebook.

Settling an estate is one of those things that many of us don’t know much about until we actually experience personally. If you are in a situation where a loved one has passed or you recently inherited a property, I hope this information will help give you some insight into the process of estate planning as it pertains to real estate appraisals. 

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

Estate or probate appraisals are commonly ordered between 2-6 months of the death of a loved one (or inheritance of property). Sometimes the appraisal is ordered right away within two weeks, while other times there is a much more substantial time period.

Retrospective Value: In estate planning situations it is common for the appraiser to perform a ”retrospective appraisal”, meaning that even though the property might be inspected today, it isn’t valued off of today’s date, but instead based upon a previous date (usually the date of death of the owner of the property, hence the term “date of death” appraisal). For example, if an owner of a property passed away on October 12, 2010 and the current date is March 23, 2011, the appraiser would inspect the property today, but the value conclusion would be based on what the market was doing on October 12, 2010. For example, the two estate appraisals on my desk right now were inspected very recently and their respective value dates are 4-6 months ago.  

Other Types of Value: In addition to needing a retrospective value during the estate planning or probate process, sometimes the ordering party will also request a current “as is” 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).  In these cases there are really two appraisals being done since there are two separate values issued. Most of the time only one appraisal is needed though, but every situation is unique and it 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. There is no cause for alarm or worry at all. A good attorney or accountant can help direct you toward the type of value needed for your estate, and a company like mine already knows what questions to ask you. 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. 

If you have any questions about the estate or probate process in the Greater Sacramento Region, feel free to contact me at 916.595.3735, ryan@LundquistCompany.com or visit our appraisal or estate settlement website.

My industry changed in a huge way two years ago. Many real estate appraisers are actually no longer in business because they were basically sideswiped when something called the Home Valuation Code of Conduct (HVCC) came along.

I get asked quite a bit about HVCC and how I feel about it, so I wanted to offer my two cents. This is probably not what you were expecting to hear, but HVCC has actually been a catalyst to take my business to the next level. Look, I’m not an HVCC groupie by any means, but rather than focus on the problems created for the appraisal industry due to HVCC, I have worked hard to expand niche areas of business instead. It’s in my DNA to find solutions – whether with business or community involvement. Watch the video below to hear my story.

Has your industry experienced changes in recent years? How did you respond to these changes? Why do you think some of us see opportunities during hardships while others only see threats? Is the glass half full or half empty for you?

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

As an FHA Certified Real Estate Appraiser, I get this question quite a bit from home owners and sometimes real estate agents (well, most agents know the basics here already, but the difference between a slide-in and drop-in stove in the eyes of FHA/HUD is sometimes not known). Watch the video below (or HERE) and let me know what you think. Any questions or insight?

This was shot on a myTouch 4G mobile phone in a cold vacant house with laminate and tile flooring throughout (hence the lower quality on sound).

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

While snapping comp photos in a North Highlands neighborhood today, I came across this house. I thought it was very interesting because the addition is absolutely obvious, don’t you think? It’s unfortunately a bit hard to tell from the angle of the photo, but the 2-story unit with brownish stucco exterior is actually attached to the single-story unit with yellowish siding. Which came first?

Curiosity killed the cat, and it also got to me here. When returning to my office, I looked up this property in Tax Records and Metrolist. It’s interesting to see the last purchase in 2008 as a single-story single family residential property, but it has since been converted to a duplex per Tax Records (hence the 2-story attached addition). The interesting notion too is the effective age for this property. How old is it? Well, the single story unit is roughly 50 years old and the new unit is roughly three years old. If you were asked to give one overall age for the duplex, what would you say? 26.5? ((50 + 3) / 2 = 26.5)

What do you think?

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

It was an honor to have local Realtor David Yaffee interview me the other day about what appraisers look for during an FHA inspection. We also ended up talking about property taxes a bit too. Thanks David. I really appreciate the opportunity. Keep up the great work and the resourceful videos!!

Check out David’s website at www.DavidYafeeTV.com, his post featuring this video, his Facebook page, and his Twitter (@DavidYaffee).

Let me know if you have questions, insight, or any real estate appraisal or property tax consulting needs. If you are a local real estate or loan office in the Sacramento area, I’m happy to come and give my FHA presentation. Contact me at 916.595.3735, on my company website, or on Facebook.

I mentioned a couple weeks ago about getting a new phone for my appraisal business. Well, during some time off last week I bought a myTouch 4G by T-Mobile. This is definitely an upgrade from my G1.

The features I like most so far about the myTouch4G include: the internet speed is so much faster than my previous phone, it plays flash videos, tethering, two camera lenses, there is a flash on the camera, it’s very easy to sync with Google apps, the flashlight app is far more than just a lit-up screen, it has a decent camera and a great video camera, no dropped calls yet, and there are seven screens. It doesn’t have a pull-out keyboard, which I thought would be a deal-killer for me, but I’ve adjusted quite easily to the on-screen touch keyboard.

Here is a video overview of the myTouch 4G below (or an external link). 

On the job I anticipate using the following apps and features the most: Square (to accept credit card payments by phone), flashlight, video, camera, email and internet of course, social networking to connect with clients, Google Voice, Google Calendar, and Google Maps. The phone does have a video chat feature, but I don’t know that I’ll really use that during the business day.

Having the right technology for business these days is very important to me so I can stay in touch with clients and be a quick resource as needed. What tech gadgets make your business run smoothly?