Sacramento Appraisal Blog

Market trends and real estate appraisals for divorce, estate settlement, loans, property tax appeal, pre-listing and more. We cover Sacramento, Placer and Yolo County. We're professional, courteous and timely.

Tools for talking to neighbors online

By 9 Comments

Show me a neighborhood where residents never talk and I’ll show you a community ripe for crime and problems. While there is no replacement for actually talking to neighbors in person, these days it’s so easy to be connected online, which can be a huge benefit for a neighborhood to communicate more effectively and solve issues.

Here are three platforms to consider for connecting with neighbors:

  1. Yahoo Groups:  I’ve used the Yahoo Groups platform in my neighborhood for over four years now and it’s been a great tool to build relationships and solve community problems. If you are not familiar with the “Groups” format, it’s basically a place to share messages and communicate quickly with a large number of people. You can share files, pictures, keep a community calendar and more. In my neighborhood it’s common to hear things like, “there is a small brown dog running around” or “there have been some break-ins” or “let’s plan a BBQ next week.” The forum can be private or public, you have the power to moderate, and you can invite outsiders to join the conversation too. It can be helpful to get a group of neighbors on board and also invite council members and police officers to be a part of the forum. The strong benefit is that Yahoo Groups is very easy to use for all ages and you can post by email. The real downfall is that it’s not easy to go back and find old messages and the platform overall is fairly basic. Visit Yahoo Groups.
  2. Google Groups:  This is Google’s version of Yahoo Groups. I have not used this platform personally, but it seems to have all the same features as Yahoo Groups and it is likely just as easy to use. However, Google does appear to have better mobile posting features and my hunch is their platform probably has a smoother design and some nifty tech too. Visit Google Groups.
  3. Nextdoor:  There is a new startup called Nextdoor that touts itself as “social networking for neighbors.” Their site seems very user-friendly so far and has a “Facebook-ish” feel. Only residents in a tightly defined neighborhood can join the Nextdoor site for their community. Nextdoor has a verification process for members, which takes work off of residents figuring out if someone lives in the neighborhood or not. Their system seems to make it very easy to create events, share pictures and have conversation all in one place. The downfall is that you cannot post via email (they say they’re working on that), outsiders cannot join as members (City Hall can join to post messages, but cannot see resident messages), and ultimately Nextdoor is a start-up. We don’t know whether they’ll be successful or not in years to come, though they appear to have big financial backing. Visit Nextdoor.com. I have joined Nextdoor and a few neighbors have done so also. We are testing it out right now and I’ll have more to say about it in coming weeks and months.

What else is out there for connecting? What would you recommend to friends or clients? If you are in real estate, what tools do you suggest to new homeowners when you hand over the keys?

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.

Why is there a difference in square footage between official records and the appraisal?

By 12 Comments

Last week I gave some tips on how to challenge a low appraisal, and today I’d like to point out something very obvious you ought to pay attention to in an appraisal report. If there is a big difference in square footage between the appraisal and official records (tax, assessor, county, city), it’s important to know why there is a difference, because it could hurt your wallet.

In the example below, an investor client hired me to review an appraisal on one of their recent flipped properties in Sacramento. One of the very first things I noticed was the appraiser measured 1087 square feet, but Tax Records said 1207. Since the appraiser adjusted by about $50 per square foot, it looked like this could possibly make a $5,000 difference in the report. Who was right in this case? After my client hired me to accurately measure the house, the actual GLA (gross living area) was 1207. You can see the appraiser measured the western wall at 38 feet, but it was actually 45 feet. The original appraiser ended up fixing the error and then adjusted the value up by $5,000.

There was obviously an error in the example above, but in other cases, why is there a difference between actual living area and what official records say?

  1. Builder was wrong: Official records could have been wrong from the beginning if the builder reported an inaccurate GLA for that model.
  2. Change of building plans: Sometimes building plans change, but the adapted square footage is not reported to the county, so the local authorities only have on file what was originally planned.
  3. No permits: The house may have been added on to without permits.
  4. Permit not recorded: The addition was done with permits, but for whatever reason the additional square footage was not recorded.
  5. Appraiser error: The appraiser made an error.
  6. Including the wrong stuff: Maybe official records mistakenly includes an enclosed patio, sun room, garage or something else that really shouldn’t be GLA.
  7. The 5 foot rule: There is a difference between the footprint of the house and actual square footage in cases with slanted ceilings with short walls (especially an A-frame house). It’s always important to take into consideration the “5 foot rule” for calculating square footage.
  8. Shoddy workmanship: Maybe there is a legal addition, but the workmanship is really not up to par for consideration as GLA because it doesn’t meet standards for GLA.

What other reasons might there be a difference in square footage between official records and reality?

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.

Tips for challenging a low appraisal

By 26 Comments

I cannot tell you how often I get phone calls from local real estate agents about bad appraisals on properties they are trying to sell. Usually the complaint is the appraisal has come in lower than the sales price. Of course we all know market value and contract price are not always the same, right? But very often in these situations there is a legitimate complaint because the appraisal just doesn’t seem to be well-supported. In cases like this I recommend the following points for preparing a solid appraisal rebuttal or reconsideration of value:

  1. Put it in writing: Don’t just say things like, “this appraisal is bad”. That does nothing to provide support for why you think the appraisal is not adequate, and it does nothing to propel the conversation forward. Don’t just make a phone call either. It’s better to put your thoughts on paper in a logical manner so the lender and appraiser can digest your well-reasoned argument.
  2. Be specific: Provide specific support for why the value opinion is different in your mind. It does nothing to only say “value should be higher”. Pick apart the comps in the report and any other properties you think are truly comparable too. Maybe you know the neighborhood really well, so you could point out something the appraiser really missed that impacts value. For example, you might say, “Comp 1 has zero upgrades and backs to a commercial property, yet the appraiser considered this property equal to the subject and did not make an adjustment. Why was no adjustment made?” Or maybe you’d say, “Comps 1-3 were all short sales and sold within 10 days of being listed. These sales appear to have sold quickly and below market value. Why was no adjustment given in the report for the distressed nature of the sales?” You might consider mentioning important information about neighborhood boundaries if inappropriate comparables were selected. Make sure to include marketing information on the subject property too (how many offers did you have?) as well as a list of all upgrades and costs too. Lastly, are there any big differences between the reported square footage or bed/bath count in the appraisal report in comparison to what you know to be accurate about the subject property?
  3. No pressure: Remember not to pressure for a higher value. Just stick with the facts in the marketplace as they relate to the value of the subject property. As much as possible, try to illuminate the market so it can speak for itself. You are asking the appraiser to reconsider the value, not meet your sales price.
  4. Be humble: You might be right, but you could also be wrong. There may be a very good reason why the appraiser made a certain adjustment. If the appraiser got it right too, then let the appraisal stick. There is no sense in trying to fight something if you don’t really have a case.
  5. The big picture: Focus on big picture items that impact value like proper comp selection and proper adjustments in the report. It probably doesn’t alter value if the appraiser made a spelling error, right? Put your energy into things that really matter.
  6. Bullet points: Be systematic in your presentation. Don’t write a novel, but organize your thoughts into 5-10 specific bullet points so the appraiser and lender can easily digest your reasoning. Avoid lengthy paragraphs and emotional points void of logic and specific data.
  7. Be professional: Be nice even if you don’t feel like it. The way you ommunicate reflects upon you and your company.
  8. Ask pointed questions: This goes back to being specific. Ask the appraiser to explain why certain adjustments were made or not made. Try to understand the report and ask the appraiser to explain himself.
  9. Opening Paragraph: Include something like the following at the beginning of your letterhead: “After reviewing the appraisal for [address] by [appraiser], we would like to request further clarification and investigation by the appraiser. We would like to ask for a reconsideration of value based on the following points:”
  10. Closing Paragraph: “All things considered, we would humbly ask the appraiser to take a second look at the information above as it relates to data and adjustments in the appraisal report. The information above may impact the overall value of the subject property. We appreciate your time and consideration, and we can be reached with any further questions at 916-xxx-xxxx. Respectfully,”

Let me know if you have any questions or need my assistance for a property you are working on. I cannot be an advocate for you, but I can provide you with market insight or a second opinion of value.

Have you experienced any success with appraisal rebuttals? Any tips to share?

UPDATE: I wrote a helpful piece on BiggerPockets.com about how to challenge a low appraisal. I included a downloadable format to use. It incorporates the content above, but includes the updated document. It’s free. Go get it HERE.

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.

Overpaying $901 per year in property taxes

By Leave a Comment

This graph illustrates perfectly why it’s important for some home owners to dispute their property taxes. Can you see how the Assessor’s value is truly a “lone ranger” among similar sales? A Sacramento area investor contacted me to prepare an appeal report for him to demonstrate market value on January 1 (date of assessment). As you can see, there is an enormous difference between assessed value at $167,154 and market value at $95,000 in the case of this halfplex in Citrus Heights. The savings in taxes per year equals $901, which works out to $75 per month. What would you do with an extra $75 each month in your pocket? (money that should be there in the first place)

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.

Skip to content