Category: Appraiser/Appraisal

Increasing Value

Increasing Value

Over the past several years I have tracked the value of improvements that were proven using Matched Pair Analysis. This is a situation where there are two nearly identically properties one with the improvement and one without. This technique allows the appraiser to isolate (and show proof) of the value of the feature. This is an acceptable method of establishing increasing value in improvements. These figures are from a wide range of price ranges.

  • Swimming Pool:  $9,000 to $20,000
  • Bathroom:  $5,000 to $25,000
  • Half Bathroom $5,000 to 18,000
  • Updating:  $5,000 to $28,000
  • (Permitted) Square Footage Living:  $20 to $50
  • Additional Car Storage:  $4,000 to $10,000

Therefore, it’s important to note that renovations or improvements are made as a matter of the owner preference. Situations where the owner will definitely make money, on resale from renovations are limited. Unless you are a licensed contractor that is able to complete the renovations at cost you should be very cautious. You need to do your homework or hire an appraiser to estimate the value of your property before and after the improvements. Once you pay a contractor, purchase material, permits and professionals, profiting on resale is unlikely.

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Improvements
Improvement Values

Update:  Subsequent to the original posting of this blog article, construction costs have increased significantly. Cost increases will typically increase the return on efforts. It is always a good practice to be up to date with costs of materials from local big box stores such as Lowes and Home Depot. 

Ultimately, using local contractors/builders and obtaining multiple estimates is always a good plan. Use local builders with local references. Individuals such as Realtors, Home Inspectors and Appraisers are a good source of recommendations. 

For more info:  http://PriorityAppraisalandMortgageServicesInc.appraiserxsites.comhttps://priorityappraisalfl.com

Appraising Flood Plains

Appraising flood plains or FEMA designated flood areas can be a bit challenging.  In the wake of the many storms that produced “rising water” of various types, consumers have come to realize the significant damage that a storm can cause. Tropical storms and hurricanes can cause water to rise in the form of tidal surges, rainfall, waterways and other tributaries that are overcome with a surplus of water. These situations can lead to significant damage and associated costs to restore property to it’s desired condition. The risk of these circumstances is particularly of concern in certain flood zones and therefore there is likely an effect on value. Not to mention the increased cost of insurance in these areas which is also likely to effect value.

Establish the Flood Zone

One part of the lending procedure is to establish the flood zone of the property. Many times the elevation is also necessary in order to adjust and in some cases reduce the cost of flood insurance. The reduction in the cost of flood insurance often occurs when a structure is located in a flood hazard area but is elevated thereby reducing or eliminating the need for flood insurance. The flood zone is provided in the appraisal and additional flood documents are ordered through the lender. In certain conditions a survey may be necessary. The governmental organization FEMA is responsible for issuing and maintaining flood maps. These maps are available through the FEMA website.

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Appraising in Flood Plains

 

The appraiser is responsible for reporting the flood zone of the subject property and analyzing what impact the flood zone may have on value. In some situations consumers will not want incur the additional costs associated with properties located in a flood zone. This is particularly true when the property isn’t located on the waterfront but is subject to the necessity of a flood insurance policy based solely on the close proximity of the water the subject in fact enjoys no access to. In this scenario it is possible that the consumer can purchase and alternative property that is outside of the flood zone or elevated thereby reducing the flood insurance premiums to a preferred rate that is not required by the lender. Some consumers will pay more for a property outside of a flood hazard zone due to the reduced cost of insuring the property.

For more information:  http://PriorityAppraisalandMortgageServicesInc.appraiserxsites.com

Appraising in Flood Plains

Buyers Market

Buyer’s Market:  1236267793876500562EricOrtner_Gingerbread_House_svg_hiThe tides are changing and we are seeing what has the earmarks of a seller’s market rather than a buyers market. What does the mean to buyer’s and seller’s and what effect does it have on value?

Sellers Market:

A seller’s market is what you have when demand is greater than the supply. Consumers are willing and able to spend more on real estate, so sellers will often see several consumer buyers competing to buy their property, which drives up the price. This means that buyers will have to spend more to get what they want. This is the ideal situation for sellers because they get a more favorable price for their homes.

Buyers Market:

A buyer’s market is the opposite and is what you get when there is greater supply than demand. There are more people offering to sell houses than there are people wanting to buy houses. In a buyer’s market, sellers may have to accept a lower price than they want to sell their home and may have to resort to offering monetary incentives. This is the ideal situation for buyers because they can get a great deal.

The change in tides makes this a favorable time for sellers to offer their homes for sale. They are more likely to obtain a higher selling price if buyers are competing to purchase a limited number of offerings. On a regular basis I am receiving reports that homeowners are receiving multiple offers. Many times the multiple offers are received within a few days of one another. The listing time is becoming shorter and shorter and overall the values have increased.

Priority Appraisal and Mortgage Services Inc. is a residential appraisal firm experience in all areas of residential appraising in the Tampa Bay area. Focused in the Pasco, Pinellas and Hillsborough counties for the past 14 years. At Priority Appraisal and Mortgage Services, Inc. our customers are out priority. We provide fast accurate appraisals in a timely manner. We go above and beyond to fulfill your needs with any and all additional market information to serve your requirements. For more appraisal info visit: http://PriorityAppraisalandMortgageServicesInc.appraiserxsites.com or call Shari Peterman directly at 727-505-6706. I look forward to hearing from you.