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.

Lundquist Appraisal Company

Put on your FHA Goggles: What does it take for a Sacramento area property to meet FHA standards?

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FHA loans have dominated the local market in the Sacramento area lately, haven’t they? This is why many buyers and sellers are paying careful attention to FHA guidelines. I get calls all the time from concerned sellers, prospective buyers, and real estate agents about FHA compliance issues. The question is usually, “will _________ be an issue for an FHA loan?”

FHA has a very specific set of minimum requirements. If you are planning to sell your house and you think the most likely buyer is going to be using an FHA loan, then strap on your “FHA goggles” to view your property like HUD does. Or if you are purchasing a house, it’s important to be aware of condition issues that may impact qualification for an FHA loan.

What does it take for a property to meet FHA minimum guidelines? FHA is primarily concerned that everything in a house functions properly and that there are no health and safety issues. FHA continually says, “Soundness, Safety & Security” as their motto. It’s okay if there is some deferred maintenance, but if there is any issue that may pose a threat to health, safety, soundness or security, then it needs to be solved. Examples might include chipping paint, mold, missing appliances, an inoperable HVAC, a broken water heater, dangling wires, trip hazards, etc… You can see a more detailed list of specific requirements in a previous post.

Quiz Time: Now that you have just a bit of information about FHA compliance, take a look at the image below. What do you see that might pose a safety risk and be unacceptable to FHA? Comment below.

Keep me in the loop if you have any questions or if you need to hire my “FHA goggles” to help you make a decision when selling or buying a house. And don’t worry, I don’t actually wear goggles like this on inspections. 🙂 You can reach me at 916.595.3735, on Facebook, or ryan@LundquistCompany.com.

Just because a “ninja” says it, doesn’t mean it’ll work for your business marketing plan

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There are marketers out there who call themselves gurus, specialists, experts, and even ninjas. I don’t have a huge problem with titles like this for the most part, but my sense is that if you’re going to use a title, you better be what you’re claiming.

There are so many voices to listen to when it comes to marketing our businesses, so it’s important to sift through what the “gurus” are telling us. My sense is that good marketing is about being in touch with what is sincerely relevant for potential clients while also being true to your personal style of making a sale. There’s really little creativity in simply copying what others are doing, and the truth is that a winning formula for someone else may not be good for you anyway.    

Business is changing rapidly and technology (especially social media) is often challenging us to adapt our model for business and the way we connect with people. In this economy and internet-driven world, if we sit on the sidelines for too long and don’t adapt, we will no longer be relevant (just think of Blockbuster vs. Netflix vs. Red Box).

In short, be encouraged today to be yourself in business. Listen to what the marketing voices are saying, but do what makes sense for your clients and your personality. Take a small risk in coming days or weeks to get out there a bit more with your business.

By the way, what marketing voices or resources are you listening to?

Where do you find owner-occupancy information for a city, neighborhood or zip code?

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A local Realtor called me yesterday asking if I had any resources to help her find the owner occupancy rates for a particular zip code in the Sacramento area. One of her investor clients needed more specific information about a neighborhood he is considering buying in.

Off the top of my head, I suggested the Census Bureau or maybe the Post Office or city websites (for free resources), but through the course of research and conversation with colleagues on the REAA forum, I now have a pretty good list to give to my Realtor contact. I figured this information might be useful to others, so here you go.

United States Census Bureau
Motovo “neighborhood” search (www.movoto.com)
Brainy Zip (www.brainyzip.com)
Neighborhood Scout (www.neighborhoodscout.com)
City Data (www.city-data.com)
Tax Records Search (www.realist.com) – paid service – available through MLS

Do you have any other resources to add? Comment below. Also, what other websites do you think investors or home owners should take a look at before making a purchase?

Cost to Build, Home Prices & Unemployment in Sacramento & Placer County

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My Realtor friend Jenifer Miller invited me yesterday to give a 90-minute talk to a group of new real estate agents at Lyon Real Estate in Elk Grove. It was fun and I hope overall helpful too as we discussed how to more effectively communicate with appraisers in an HVCC world as well as a few tidbits on FHA minimum requirements.

Anyway, one of the members of the class brought up a great question. He asked how properties could not be worth at least their replacement cost. The truth is that we see so many properties in the Sacramento area selling far below what they would actually cost to build from scratch (cost of land + all improvements). 

That’s the nature of the market these days. But why is that? There are many factors to consider. Do you remember the real estate bubble? It couldn’t have lasted forever. Property values really climbed too quickly to enormously high levels, didn’t they? When the bubble burst, it changed the real estate market. There ended up being a huge oversupply of distressed properties listed on the open market, and these REOs set the pace for the rest of the market. Keep in mind too everything that was going on in Wall Street, the bailouts, and the economy beginning to sincerely struggle. All of these factors (and more) influenced property values.

Moreover, check out unemployment figures to the right for both Sacramento County & Placer County. These April 2010 stats from the Employment Development Department show an unemployment rate of 12.5% in Sacramento County and 11.5% in Placer County. Let’s contrast this with data from April 2006 that shows the unemployment rate was 4.8% in Sacramento County and 4.3% in Placer County. Things changed, didn’t they? In light of unemployment rates being significantly higher nowadays, do you think buyers could really afford to purchase houses right now at 2006 levels?  

What do you think? I’d love to hear your insight.

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