Does it seem a bit suspect when the appraised value comes in at the sales price? Maybe you’ve felt that way before. Should you be concerned? Yes and no.

Yes. If the appraiser has deliberately met the sales price in an attempt to make the deal work, it is suspect and you should be concerned. If the house is really worth more or less, it’s not fair to have the appraisal hastily completed to help make a transaction move forward.

No. The sales price can be a good indication of market value. The agreement between a buyer and seller can very well reflect market value for a property and fall within the range of values in a neighborhood. If the buyer and seller (and others) offered on the property and all came in at a similar level close to the contract price, chances are that might be a pretty decent indication of how the market sees the property. For example, if the sales price was $225,000 and the range of values for competitive sales looks to be $220,000 to $230,000, and there is no good reason for the subject value to be reconciled at the higher or lower end of the range, then $225,000 could very well be a rational selection for market value. It is very reasonable for the appraiser to make such a conclusion and not suspect at all so long as there is support for that conclusion. In short, when the appraised value equals the sales price, the appraiser might just be saying, “Yep, that looks good based on all data. The buyer and seller did a good job working out a price.”

What do you think?

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, Twitter or subscribe to posts by email.

It’s so important to know exactly where one neighborhood ends and another begins. Misunderstanding neighborhood boundaries can have a dramatic impact on perceived property value. When dealing with a short sale situation, loan modification, property tax reduction, bankruptcy, or really any transaction, it could really backfire if the decision makers for your loan or legal documents do not take into account important market boundaries.

Let’s look at the map below as an example. The area traced in red is a portion of the Central Oak Park neighborhood in Sacramento, while the area traced in blue is known as Tahoe Park West.

Both of these areas are really separate neighborhoods despite being right next to each other (divided by Stockton Blvd). There is actually a huge difference in property value between these two areas as indicated on the trend graph below. The median price level throughout most of the past year in Tahoe Park West hovered around $150,000, while the median price level for Central Oak Park was closer to $60,000.

It’s easy to imagine how online valuation websites (like Zillow or Cyberhomes) or even inexperienced real estate professionals might make sincerely wrong value judgments by looking at all sales within a 1/4 mile radius or some other parameter that does not encapsulate the true neighborhood. That’s why it’s so important to work with professionals who really understand the local market.

How might misunderstanding neighborhood boundaries really do some damage?

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.

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.

In May I posted about a major bank-owned fixer in the Oak Park area of Sacramento. Well, round 2 of video is now here as I shot the following promo a couple days ago as I met Housing Group Fund at this 36th Street property to watch tressels be installed.

If you cannot see the video in your RSS or email, click HERE. Thanks for watching. What do you think?

I recorded the video with my Flip camera, and the cool thing is my client kicked down a little money for me to do a video for them this time around.

This is a wonderful event that I participated in last year, so I definitely wanted to mention it this time around.

Exit Realty West will host their 4th annual CanTree Auction on Friday November 19, 2010 beginning at 4:30 pm. Come out for this festive food-filled fundraiser to benefit the Salvation Army. Last year the Sacramento Association of Realtors raised a total of $65,000 for the Salvation Army during the Christmas season and Exit Realty West’s CanTree auction was a part of that. Last year’s auction had gift baskets, 49ers tickets, Kings tickets and some other really great items (and it was fun too).

Questions? Contact Jeff Dominguez or Francisco Cuellar of Exit Realty West at 916.441.4418, view the video I shot below, or check out www.exitrealtywest.com.

Let me give you a little tour of a South Sacramento bank-owned property. Why do foreclosures often sell for less? Beyond any stigma for being ”bank-owned” and banks pricing these properties to move quickly, there is a very obvious reason why these REOs sell for less. They’re often not in very good condition – at all.

This is a very typical foreclosure scenario, so it’s no wonder why arms-length sales are usually not comparable and tend to sell for more. They’re usually in better condition and they come without a “distressed” nature.

By the way, what do you think of the bathroom. Is that mold? What is it?

My client did give me permission to share this video, by the way. If you have any questions, let me know. Give me a call at 916.595.3575, shoot me an email, or catch me on Facebook.

If a picture is worth a thousand words, what story does this photo tell? This is the closet of a bank-owned property I appraised a few months back. My client gave me permission to share this photo.

There were multiple places in this house where animals appear to have been kept in closets or near doors because sheetrock is scratched up as well as trim and baseboards gnawed. I don’t know if this was some sort of illegal “grooming” facility, but clearly these animals were not being properly cared for.

How does this image strike you?

I just finished listening to a 15-minute interview with a Sacramento State professor, Dr. Robin Datel, and Capital Public Radio’s Jeffrey Callison. If you’re looking to understand a bit more about the Oak Park area of Sacramento or even take a walking tour, give it a listen. The interview begins at 13:50.

I plan to take this tour at some point. It could be fun to video tape the tour or photograph it. Anyone else interested?

Walking Tour Resources:
Center for Sacramento History Website
Oak Park Walking Tour Brochure (pdf)
Oak Park Walking Tour Map (pdf)
Images of Oak Park Walking Tour on Flickr

While appraising a triplex in Sacramento I came across an interesting property history of another nearby triplex in the “Gardenland” area of Sacramento in the 95833 zip code. As you can see below, this property has changed hands quite a bit in the past five years, and it has gone into foreclosure twice too. This is actually a fairly common phenomenon because investors and first-time buyers purchased properties several years ago when property values had already come down since 2005, but then the economy took a turn for the worse. Property values decreased even more and unemployment increased dramatically also.

Sales History of a Triplex Property:

10/01/2010  $117,500 (sold on MLS as bank-owned)
08/11/2010  $60,376 (foreclosure transfer)
02/28/2008  $180,000 (sold on MLS as bank-owned)
07/25/2007  $306,000 (foreclosure transfer)
06/22/2006  $399,000 (sale – not on MLS)
05/27/2005  $360,000 (sale – not on MLS)

It’s remarkable to think this triplex once sold at $399,000 and yet closed days ago for $117,500. This property seems to tell the story of the housing bust and current economy, huh? What do you see?

Here is a before and after image of a house in the “Oak Park” area of Sacramento that one of my clients rehabbed recently. It’s a joy to see properties like this get an “extreme makeover” because it’s great for the community and wonderful for one lucky buyer too. The previous stairs were apparently failing, and so someone built a very shoddy walkway on top of them (don’t miss the huge pile of dirt underneath too). The new stairs are quite an improvement, don’t you think? Neighbors just might appreciate the upgrade too.  

Here’s a quick trend graph for you of all sales in the Pocket-Greenhaven area of Sacramento over the past three years. What stands out to you? What do you see?

Will the Arden-Arcade area of Sacramento become a city? We shall see. There is a measure on the ballot for November 2010 that puts this important decision in the hands of residents (Measure D). 

If you live in the Arden-Arcade community or have an opinion about cityhood either way, I am very curious to hear what you think, especially as it pertains to the current quality of life under Sacramento County. I’m paying close attention to this issue because it’s my professional duty to know what is happening locally, but more than that I am a resident of the newest city in the Sacramento area and my Rancho Cordova antennas are tuning in.

The image below shows boundaries for Arden-Arcade.  

Links for further reading about Arden-Arcade:

Arden-Arcade Cityhood Observer (blog)
Arden-Arcade Cityhood Website
Arden-Arcade Sacramento County Website
Arden-Arcade Wikipedia
List of Arden-Arcade Council Candidates
SNR Story: Is Sacramento cracking up? 7-10-10
Sacramento Bee: In Arden-Arcade, cityhood fever heats up again 08-18-10
Stay Sacramento Facebook Page
Stay Sacramento (opposition to cityhood)
Yes on Measure “D” Facebook Group