Sacramento Appraisal Blog

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Home Appraiser in Sacramento

An Interview with the Sacramento Business Journal

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LundquistRyanApprasial041312DM_280 - photo by Dennis McCoy of Sacramento Business JournalThe Sacramento Business Journal interviewed me about using video in business as a marketing tool. The article published a few days ago and it turned out great. I am very honored to have had the opportunity. In addition to the print story, a reporter and photographer came to my office for a quick video shoot on tips for creating effective videos. The reporter also highlighted local video all-stars Heather Ostrom, Tamara Dorris and Kerry Shearer. In case you missed it, check out the article here and watch the video below (or here). Photo by Dennis McCoy of the SacBiz Journal.

Do you use video in business? Why? Why not?

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.

Two sliding glass door repair issues for FHA loans

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Let’s talk about sliding glass doors for a minute. I wanted to bring up two repair issues I see frequently during FHA appraisal inspections in the Sacramento area. I notice these issues in not only foreclosure sales, but also investor flips. Why does this matter? FHA is very specific about a property needing to meet certain requirements, so having a home in “FHA shape” before it lists on the market will help eliminate re-inspection fees by the appraiser, which effectively removes one more potential delay in closing escrow.

Broken Glass: One of the things you hear constantly about FHA loans is the importance of “health and safety.” So we must ask the question: Could it be a safety issue if there is one pane of glass broken on the sliding glass door with shards of glass sticking out? The answer seems obvious, right? This could be a safety risk for occupants – particularly children. The seller will need to cure the problem by removing the shards altogether or ideally replacing the glass pane. It’s actually easy to miss things like this, so it’s important to look closely at a sliding glass door.

Sliding glass door FHA issue - photo by Sacramento Home Appraiser

Broken Locks: In addition to a focus on “heath and safety”, the basic concept of meeting FHA minimum requirements is that everything must work as it is designed to work. For example, a window that is supposed to open must open, and a built-in appliance should do what that appliance is designed to do. This means if you have a sliding glass door that is supposed to lock, it should do just that. If the seller is putting a 2×4 in the sliding glass door track to keep the door shut, that’s not okay. In the case below, the lock is missing altogether, so a new working lock will need to be installed before the close of escrow.

Sliding glass door missing lock FHA issue - photo by Sacramento Home Appraiser

I hope this was helpful to answer some of your questions. You can check out other FHA appraisal articles I’ve written including Top 10 Repair Issues for FHA Loans and Do the Appliances Have to be Working for an FHA loan?

Any questions, stories or insight?

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.

A model match mountain graph in Antelope

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As a teenager I don’t think I would’ve ever envisionsed me saying this, but I actually like creating graphs based on research I do for my appraisals. I think plotting data visually can often provide a helpful context for clients and users of the appraisal to be able to see or interpret what has happened in the market.

A teepee or mountain graph: As an example, let’s view the past thirteen years of sales in the Northbrook neighborhood in Antelope for a particular single-story model (1943 sq ft). If you’re not familiar with this pocket of housing, it’s a smaller subdivision located west of Watt Avenue and just north of Elverta Road on the eastern side of the golf course. At one time the 1943 model was selling easily above $400,000, but today’s market has seemed to hover between $175,000 to $200,000 over the past year for a standard property without massive upgrades (there was one incredibly updated sale at $225,000 over the past year). I know such a hefty decline is hard to grasp, but values in this neighborhood are not anything out of the ordinary for the Sacramento area since most areas tend to be selling at 2000-2001 levels right now.

What does a graph like this say to you? What do you think it shows?

All Model Match Sales in Neighborhood - 13 years - Graph by Sacramento Home Appraiser - 530 pixels

By the way, I don’t always break down model match sales, but while preparing an appraisal in this neighborhood for the IRS, I thought a graph like this would really help to communicate clearly to my client since there were not too many sales around the date of the death of the owner (which is the date I used to value this property).

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.

What is a pool worth in the eyes of an appraiser?

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How does an appraiser value a pool? There’s really no standard dollar figure for a pool’s worth since pools come in all shapes and sizes, but pools are very commonly worth FAR LESS than the cost of installation. In the Sacramento area it’s not uncommon to see appraisers assign a mere $10,000 or so of value for a standard gunite built-in pool.

Why do appraisers give so little value to a pool? It seems silly to think a pool installation at $30,000+ would only yield $10,000 or so in an appraisal, right? Let me explain.

photo of pool1) Market Interpretation: First of all, the appraiser should not be making a subjective value judgment, but is rather interpreting what the market is saying about what a pool is worth. The appraiser analyzes similar homes with and without pools to see if there is a reaction (price difference) in the market for the pool. For example, if homes with pools in a neighborhood have sold for $290,000 and homes without pools have sold for $280,000, assuming everything else is similar, the pool is worth $10,000.

2) Buyer’s Perspective: If a buyer was looking at two identical homes, but one had a pool and one had no pool, how much extra would a typical buyer pay for the pool? If the pool cost $30,000 for installation, doesn’t it seem unrealistic that the buyer would pay that much extra for the pool? (especially if the house is only worth $150,000). The same principle could be seen with a $30,000 kitchen remodel. While the remodel is very nice, a buyer might only be willing to pay $20,000 extra for that remodel.

3) Overimprovement: Pools are a classic example of an overimprovement because they cost more than the market is willing to pay for them. By the way, for the sake of your Jeopardy knowledge, the fancy real estate word for “overimprovement” is “superadequacy”.

All things considered, keep in mind a pool may be worth more or less depending on the type of pool, quality of construction, climate, neighborhood, season and particular real estate market too. There is no constant dollar figure for appraisers to use from some sort of “Appraiser Pool Cost Manual” because each real estate market is unique and may have a different perspective on a pool. For example, a pool in an active-adult HOA community that already has three pools at the clubhouse might be worth very little or nothing to prospective buyers, while a pool in a first-time buyer neighborhood ripe with families could be worth more. Lastly, while there is a loss in value when considering market value, a pool obviously has a very subjective value in use to the owner that makes the cost worth it.

I hope this has been helpful and given you some insight into how appraisers view built-in pools. Let me know if you have any questions or insight.

Did you have a pool growing up? Do you have one now? What are the positives and negatives of pool ownership?

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