Sacramento Appraisal Blog

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Do appraisers have to use comps within one mile?

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Do comps have to be located within one mile of a property to be considered legitimate in the eyes of a lender? Does Fannie Mae really have a “one mile” standard? This is sometimes a point of confusion among real estate professionals, so it’s important to know the answer. As a Sacramento real estate appraiser, it’s vital to understand standards like this and of course use the best comps out there in my appraisal reports (whether inside or outside of a mile radius). Watch the video below (or here).

What do you think makes a good comp?

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.

Ways to “go green” for your home in Sacramento

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If you didn’t know, there are actually quite a few “green” resources available to home owners in the Sacramento area. These assets can help home owners conserve energy and water and save a few bucks too.

  1. Sacramento Tree Foundation: Get up to 10 free shade trees for your property from SMUD. Watch a video here. I actually have four trees on my property from the shade tree program.
  2. Energy Upgrade California: This website is a great resource for energy and water efficiency programs and is geared toward both consumers and trade professionals. 
  3. Realtor’s Energy Audit Program: The California REALTOR®’S Energy Audit Program provides up to a $250 rebate on a Home Energy Rating System (HERS) home energy audit conducted by a certified HERS rater (from CAR website). Watch a video on REAP here. This is good for finding out what areas of your home might need some efficiency TLC. Water Rebates for Residents: Find water rebates offered by a handful of local water suppliers in the Sacramento area. This can come in especially handy when purchasing a toilet or clothes washer.
  4. Check Before You Burn in Sacramento: As we all know, residents and businesses are prohibited from using indoor and outdoor fireplaces and such on certain days. This website lets you know which days are “burn days”.
  5. Energy Efficient Mortgage: The EEM Program was created by HUD to allow home buyers the opportunity to upgrade the energy efficiency of the home they are purchasing during the escrow period (from website).
  6. Energy Improvement Grant: The energy improvement grant is designed to promote the HUD Energy Efficient Mortgage (EEM) Program. The SAR program provides a grant of $2000 to buyers who take advantage of the Energy Efficient Mortgage in the purchase of their home. The grant is applied to energy upgrades and limited qualified closing costs (from website). 
  7. SMUD’s Home Performance Program: SMUD has various programs and financing options to help home owners increase energy efficiency in their homes.
  8. Turf Replacement Program: The Placer County Water Authority has a pilot program for replacing lawns. There may be some in Sacramento too. Know of any? Per the PCWA website, the program offers a $300 rebate for lawns replaced with non-water consuming material and a $150 rebate for lawns replaced with low to moderate water-use plants.
  9. Free Water Audits: California American Water provides free water audits where a conservation specialist will visit your home, identify ways to help you save water, and even provide free low flow fixtures for your kitchen and bathroom (from website).
  10. Green Marketing Tools: The Sacramento Association of Realtors has a compilation of flyers available for local consumers and Realtors to help home owners take advantage of available resources.

The bulk of resources listed above came from a recent meeting at the Sacramento Association of Realtors. What other “green” resources exist for home owners in the Sacramento area? What have you done to promote conversation in your home?

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.

Quick tips for agents for talking to appraisers

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In a post-HVCC world, there is both confusion and frustration regarding talking to appraisers. Agents can no longer directly choose an appraiser for most of their deals, so sometimes it seems like appraisal quality is left to chance. Maybe the appraiser will understand the local market or maybe he won’t. Of course the hope is the appraiser is a local expert who will do a thorough job and also initiate contact with the listing agent to ask questions about the subject property too. But that’s just not going to happen in all cases, so it’s important to be ready to talk with appraisers when you can. And yes, you can still have conversations with appraisers about your listings and the neighborhood market – just don’t pressure to “hit the number”.

Tips for talking to Appraisers:

  1. Meeting: If you can’t meet an appraiser at an inspection, be available by phone or email.
  2. List of Updates: Provide a detailed list of all upgrades to the appraiser (with costs if possible).
  3. Background Stuff: What helped you establish the listing price? Or why did your buyer choose this specific property and pass on others? Bring market research to the inspection to help show how you arrived at your price level. Don’t tell the appraiser which comps to use and how to do his job, but rather share information to illuminate your perspective on marketing. Say something like, “here is some market data I used in my research” as opposed to “here are your comps”. You can always share this information on the phone or email too.
  4. Offer Activity: Were there many offers or showings? What were potential buyers attracted to? Let the appraiser know things like, “I had 14 offers all above asking price in two days” or “No showings at the original list price, but then I lowered the price and had 12 showings in 4 days and 4 offers.”
  5. Inside the Neighborhood: Is there something you know about the property, neighborhood, street or market area that might be helpful and contribute to the overall value? If the property is selling high above all others, why is that? Are distressed sales selling for less in the market? What are the features in the neighborhood that buyers are willing to pay more for? Share your hyper-local insight and any resources you might have.
  6. Play Nice: Some agents never return phone calls or act impatient when an appraiser calls. My advice? It’s nice to talk with personable communicators.

Things NOT to say to an Appraiser:

  1. Deal Killers: Talking about another appraiser that “killed your deal” doesn’t help the current deal or paint a professional image of you in the mind of the appraiser.
  2. Do your job!: “Here are the best comps” (sounds like you are trying to steer a value conclusion)
  3. Higher please: “Get the value as high as possible”
  4. Lower please: “Get the value as low as possible” (yes, I do hear that one)
  5. Make it Happen: “Is this one going to make value?”
  6. The Real Hope: “Is it going to appraise for at least the sales price?”

I hope this was helpful. I’d love to hear any tips you have too. What has worked for you? What has been frustrating for you when dealing with a post-HVCC world? Do you find most appraisers to be open to conversation? Do they ask you questions?

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.

Is a property worth less if it’s a short sale?

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No. A property is worth what it is worth regardless of being distressed or not. With that being said, when a house is a short sale it may need to be marketed at a more aggressive price level to dump the property before a foreclosure date or offset any negative perception in the market for being a short sale. Notice though we’re talking about an aggressive “price” and not “value”.

Here’s a good question to ask. If a short sale was not a short sale, would it sell for more? The answer is very often “yes” and that leads us to a better picture of what market value is. The truth is that properties are frequently marketed as short sales and end up generating little interest before resulting in foreclosure. But then after these same houses end up as bank-owned they generate very quick offers at or above the original short sale listing price. Of course part of this could be banks not cooperating with the short sale process and buyers tiring of waiting for months for the deal to close, but it’s hard to ignore that short sales often (not always) sell at lower levels.

Case-in-point: I appraised a house recently in the City of Galt where competitive properties in the neighborhood showed a distinct difference between short sales and everything else. Comparable non-distressed properties were selling around $105,000-$115,000, REOs were selling mostly between $85,000-$100,000 and short sales were selling closer to $85,000-$90,000 near the bottom of the competitive range. It’s certainly true that condition and quality of updates played a role in the price differences, but it’s not an accident either that short sales were consistently finding their place near the bottom of the market.

Why is this important to understand?

  1. Appraisers:  From the appraisal standpoint, if short sale comps are used in an appraisal report (without an adjustment upward), then the value in the report may be lower than what it should be. The value could really be a “quick sale” value rather than “market value”. That’s not good on many levels. Please understand though that short sales do not always sell less than fair market value, so an adjustment upward is not always warranted in an appraisal. It all depends on what is happening in the market.
  2. Investors:  I just spoke with a Sacramento investor yesterday who has been growing frustrated to see some of his properties compared to bottom-of-the-market short sales by appraisers. This investor found me online and he called me to see if I had any advice on how to deal with his situation. That’ll be a different blog post, but I did give him some tips, a few which I mention below.
  3. Real Estate Agents:  I recommend real estate agents (and investors) provide a detailed list of all updates to appraisers (with costs if possible). Send this via email or provide in person to the appraiser. You can also discuss any relevant marketing information (ie.. “There were 4 full-price offers in 3 days and I am still getting calls and back-up offers”). Lastly, feel free to share market research and properties that helped you establish your listing price. Don’t tell the appraiser which comps to use and how to do his job, but rather share data that helped you establish your price so the appraiser might understand your point of view. You are allowed to talk with appraisers about property specifics and the real estate market, but don’t coerce and pressure for a certain value.
  4. Sellers:  Know your market if you are selling. You will have to compete with distressed properties around you, which can impact your price, but that doesn’t necessarily mean you have to price your property the same as neighborhood short sales and REOs. A trusted real estate agent or pre-listing appraisal should be able to give you guidance to understand the market. Misunderstanding what the market is doing can cost you dearly.

What do you think? Agree? Disagree? Any stories to share?

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.

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