Your family is growing. You decide it’s time to build an addition on to your existing home. Before you build, get an appraisal. Ask the appraiser if it’s a good idea to add onto your home or is it time to move to a bigger home.
When your home was originally built, it conformed to the neighborhood. It likely was not under built in size. The majority of times, the cost of addition will never be recouped when you do decide to sell the home.
I just left a home that was given back to the bank. It was so grossly over built, they not only added on a 25 x 25 addition, they also converted the 2 car garage into living area. The home no longer has a garage, nor the ability to have a garage built on the site. This home appeared to be an ongoing project that apparently was never finished. The family may have realized the nightmare they created and decided to walk away from it. I have seen far too many projects that never seem to get finished.
Another type of addition made popular in the 1970′s are “pop tops” . 2nd floor additions built onto ranches. This is usually another expensive mistake made by people with good intentions. Again, before you do anything, get an appraisal.
When is a good time to build an addition? If you are in a unique area such as water front property, this might actually be a smart decision. An appraiser has the ability to look at your home “as is” and “as proposed per plans and specs.” He or she will do their best to provide you with comparable homes.
The appraiser will estimate what it would be worth if built regardless of what it will actually cost.
An appraiser is contacted by a lender or other client, and is given an assignment to estimate the value of a home.
We utilize historical housing sale data, known as “comparables” or simply “comps”, to help us determine the current value. At Time Saving, we try and stay within 3 months to get the most accurate current picture, but are allowed to go up to 12 months if nothing more recent is available.
If you bought a home last year, it was probably a little easier for you than buyers today, who have little to choose from with a noted increase in asking prices. This all has an affect on value.
A recent article on CNN Money, Home Appraisals No Longer Derailing Sales, has our heads spinning.
Consider this one more sign that the housing market is heating up: Appraisers are putting higher values on homes again, allowing for more deals to go through.
During the housing bust, sales were often derailed by low-ball appraisals that fell far shy of a home’s selling price.
The article is incorrect. An appraiser only reads the market base on historical data. Appraisers do not set the trend or values. Buyers and sellers do it, along with the supply, demand, available financing, and government rules on the industry as a whole.
Sometimes lenders or the government will loosen guidelines, then tighten them. This has a dramatic affect on potential buyers, new and seasoned. An appraiser only interprets the market based on past sales, which tells us about the market’s demand. We even look at current listings from the area to help determine the supply. Just like a Doctor, we sometimes have to tell you something you don’t want to hear. Remember, we are just the messenger.
The article also has some terrible advice for wanna-be Donald Trumps of the world:
Between 2008 and 2010, appraisals for more than a third of Seattle-based real estate agent Michael Ackerman’s sales came in below the selling price. So he had to get creative.
“I started pulling out the key boxes at the homes so the appraisers couldn’t get in,” said Ackerman. “They had to call me to let them see the home. I would bring a packet of comparables along and explain what I used to price the home.”
Deliberately pressuring an appraiser to come in at a certain value is not ethical. It’s one thing for a homeowner to mention what they are hoping for, but it’s entirely a different thing for a realtor to lock us out!
Like most businesses, we need to do plenty more than we used to in order to keep the doors open. If we had to wait at every house for a realtor to bring me keys… let’s just say we wouldn’t have much time to listen!
This question comes up all too often. The client is clearly defined on the appraisal order, and that appraisal is the property of the client only, regardless of who pays for it.
On an appraisal for a mortgage or refinancing, the appraiser’s client is the lender, not the borrower or seller. Even though the borrower or seller may be responsible for the cost of the appraisal, the appraisal is the property of the lender and cannot, under most circumstances, be shared by the appraiser. The lending institution can decide whether to do so. This is typically how the appraisal is shared.
If for some reason you contact us for an appraisal, then obviously as the client, you are entitled to the report. Since it is not always clear who the client is, be sure to ask.
Welcome to the new website! After nearly several years with the old website, we decided it is finally time to update.
When we started in the 80s, we set out to bring our clients a fast, accurate appraisal using cutting-edge technology. Back then, we had “advanced” computers running specialized database software programs to digitize and store our records. Our car phones were actual phones in the car - the bulk of it was stored in trunk, and there was an antenna stuck to the roof. We were some of the first to use digital photography, and spent years convincing banks and clients that digital records were just as good!
Real estate appraising has changed so much since then, and we have done everything we can to keep up. We now use econometric models, mapping software, aerial photography, cloud-based data and any number of things that seemed inconceivable only a few years ago.
Although much has changed – our cell phones have more computing power than those mainframes, and our cell phone fits in our pocket – some things remain the same. Our commitment to honest, fair, market-based valuation has kept us grounded through all the change, and in demand when the market turned a few years ago.
We’ve built our business on fairness, technology and core market principles. We look forward to sharing that story with you on our new website and blog.
Thanks for your interest!
-Joe, Lisa and the Time Saving Team