Appraisal Archives

Housing Values

As a State Certified Residential Real Estate Appraiser, I enlist the use of valuation tools to cross reference my valuations. Housing values take into account many different aspects and sometimes alternative sources can give the appraiser additional data. Being a member of My Florida Regional Multiple Listing Service, we have several valuation sources made available to us. These sources have models that give us a high, low and median range. Additionally, we are provided a confidence rating.

Consumers have sources like Zillow and Trulia at their finger tips. It is very easy to search your address of interest and pinpoint several services that will give you a value. These sites are right on sometimes but often are off when compared to the reality of a sale or professional appraisal. The reason is these sites use mass appraisal techniques and often do not have the correct or updated data regarding the subject. The data utilized in this type of valuation does not take into account updates and remodeling efforts. Extra features such as swimming pools and accessory structures are not included. Favorable views such as water or conservation are not recognized.

The mass appraisal valuation models collect all sales to come up with a price per square foot amount that is then applied to the subject. This number is skewed not only by the aforementioned items but also the superior or inferior sales within the area. Unless the neighborhood is a cookie cutter area where all properties are nearly identical, there will be issues. For example if the neighborhood nearby has superior homes, your valuation is likely to be inflated. On the contrary if the nearby developments are inferior, it is likely these sales will suppress your homes value.

Proceed with Caution

Be cautious when relying on this online data to establish housing values. Take a look at the sales utilized (if available) to compare the similarity of those homes to yours. Remember the small cost of an appraisal can save you time (money) when listing your home for sale. A professional appraisal can also save you from overpaying for a new home.

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.

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.

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Appraising in Flood Plains

Appraisal Work

Work Environment About this section

Appraisers and assessors of real estate research data on properties and write reports.

Appraisers and assessors of real estate held about 83,700 jobs in 2012. About 27 percent were self-employed. The industries that employed the most appraisers and assessors of real estate in 2012 were as follows:

Activities related to real estate	30%
Local government, excluding education and hospitals	29
Credit intermediation and related activities	4
State government, excluding education and hospitals	3
Offices of real estate agents and brokers	1

Although appraisers and assessors of real estate work in offices, they spend a large part of their day conducting site visits. Time spent on site versus in the office depends on the specialty. For example, residential appraisers tend to spend less time on office work than commercial appraisers, who might spend up to several weeks analyzing information and writing reports on one property. Appraisers who work for banks and mortgage companies generally spend most of their time inside the office, making site visits only when necessary.

Work Schedules

Appraisers and assessors of real estate typically work full time during regular business hours. However, self-employed appraisers, often called independent fee appraisers, usually work more than a standard 40-hour workweek, because they must often write reports during evenings and on weekends.

Bureau of Labor Statistics, U.S. Department of Labor, Occupational Outlook Handbook, 2014-15 Edition, Appraisers and Assessors of Real Estate,
on the Internet at http://www.bls.gov/ooh/business-and-financial/appraisers-and-assessors-of-real-estate.htm (visited September 06, 2014).