Sacramento Appraisal Blog

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Bike Month & Geographic Competency

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May was “Bike Month” in the Sacramento area, and I decided to participate at the last minute by contributing fifty miles to the overall regional goal of one million miles for the month. 

I love riding my mountain bike along the American River Trails, but I’ve been hibernating from biking for quite some time now. I finally crossed the threshold again though to get back in the saddle, and I’m so glad I did. Most of my fifty miles over the week consisted of leisure, but I did make it a point to do a 15-mile roundtrip for a re-inspection of a property in the La Riviera area. The home owners were enthusiastic about me doing this, so it was fun to combine appraisal work and biking on the same trip. You can see a partial map of my route above (taken from the MapMyRide app).

Geographic Competency: I don’t plan to bike to many inspections because it would take far too long to do my job on only two wheels. However, biking to one appraisal inspection last week made me think of how important it is for an appraiser to really know the local market and understand the influences in a particular neighborhood. That is exactly why I recommend interviewing an appraiser before making a hire. Ask the appraiser about his/her experience in general as well as his/her knowledge of your neighborhood market. 

Did you participate in Bike Month? What do you do to stay in shape? 

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. 

Do garage conversions add value?

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A garage conversion is a quick way to increase the size of a house, but does it add to the overall value of a property? Here are five reasons why garage conversions tend to not help increase market value in the Sacramento area:

  1. No permits:  The conversion was done without permits (illegal).
  2. Not typical:  Garage conversions are not common in the neighborhood.
  3. Low Quality:  A partition and carpet in the garage really isn’t a very high-grade conversion, is it?
  4. No Storage:  Removing storage in a garage is not a plus in the eyes of most buyers. If there is no garage, where are you going to keep your bikes, tools, unused exercise equipment and holiday decorations? If a conversion is done properly, it may be appealing to buyers, but any increase in value may be offset by the negative of no longer having storage space. 
  5. It doesn’t feel like the rest of the house:  A converted garage often does not feel like the rest of the house because it still has the feel of a garage (despite sheetrock, a heat source, floor covering, windows). A converted garage is often on a lower foundation and it still contains the water heater and washer/dryer too. If some of the living area doesn’t conform with the rest of the house because it is lower in quality, the market will likely not give that portion as much value. This means the extra 400 square feet in the converted garage is usually not regarded the same way as an addition on the back of the house. Applying this point means a 1400 square foot house with a 400 square foot converted garage is probably not seen the same way in the market as an 1800 square foot house with no conversion.

What does this mean for home owners and buyers? You may not get the most bang for your buck in the resale market when converting a garage. If your conversion is done in a professional workmanlike manner though, maybe you’ll come out mostly even (this depends heavily on the quality of conversion and acceptance of conversions in your neighborhood). Ultimately, without regard to market value, if you need more space, converting a garage is a fairly inexpensive way to make that happen. Just keep in mind your future plans to sell the property and how your particular conversion might be perceived in your real estate market (and how much it might cost in case you need to turn it back into a garage).  

Any points you’d like to add? Would you convert your garage? Why or why not?

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. 

Assessor vs. Appraiser

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Why is there sometimes a huge difference between what the Assessor says a property is worth and what an appraiser says? I’ve included five points below to help answer this question.

Base year value: Assessments in California are based on the year the property was purchased (“base year value”). If a property was purchased in recent years, the assessment might be similar to current market value, but if a property was bought in 1980, for example, the assessment could be significantly less than what the property is currently worth since property taxes are only allowed to increase by 2% annually according to Proposition 13.

Mass-appraisal process: The Assessor’s Office uses a mass-appraisal process that comes up with a value based on crunching numbers behind a desk. This process is not able to account for condition, quality of construction or other issues an appraiser is able to see in person.

Assessments may be outdated: When the market changes rapidly, the Assessor’s Office may or may not stay on top of market movement in all cases. For example, in the past two weeks I’ve done research for several Sacramento property owners and their assessed values were literally hundreds of thousands of dollars too high.

Assessment figures are based on January 1: Property tax assessments are based on January 1 of the given year (date of assessment), whereas an appraisal could be based on any date.

An assessment is not market value: Assessment figures are not the result of the interaction of buyers and sellers in an open market, so they cannot be considered to demonstrate “market value”. This is one reason why appraisers do not use the assessed value on a property as a “comparable” in an appraisal report. Read Fannie Mae’s definition of market value here.

All things considered, can you see why there might be a difference between assessed value and appraised value? This is exactly why appraisers don’t give weight to tax assessments during the appraisal process and why lenders do not lend on tax assessment figures. Let me know if you have any questions or insight.

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. 

What is a McKeon property?

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If you live in the Sacramento area or various portions of California, you’ve likely come across a “McKeon” property. Maybe you didn’t know the formal name, but chances are you’ve seen one since they are sprinkled throughout the Sacramento area. McKeons are named after the McKeon Corporation, which built a great deal of attached four-unit properties in the 60s and 70s that are either condominiums or fourplexes. Take a one-minute video tour with me below to see in person what a McKeon looks like.

Where have you seen McKeon properties? If you have lived in one or sold quite a few, I’d be curious to hear your perspective on which unit you think is most preferrable?

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. 

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