Residential Appraisal Tips

May 8, 2012 by · Leave a Comment 

Generally speaking, an appraisal is an unbiased estimate of market value.  Determining an exact value, however, is very scientific and an appraiser has many specific guidelines to follow including the following:

  • A general rule of thumb is that the comparables used for an appraisal should have sold within the last six months and be within one mile of the subject property.
  • An appraiser is required to use two comparables that have sold within the last 90 days and at least two properties that have not yet sold but are active or pending listings.
  • An appraiser is not to use foreclosures or short sales as “comps” unless they are the only comparables available.
  • Appraisers are able to be more lenient than ever regarding repair items, however, if the home has an issue that affects safety, the appraiser must require the repair.  The rule here is the home must be safe, sound, and habitable.

 Another appraisal issue that needs to be on your radar screen is renovations.  It is more important than ever to inform the appraiser of all subject property renovations and when they were done.  Sending over photo’s takes it to another level and is super helpful to the appraiser.

 Also, more and more consumers are accessing Zillow for property information.  Be aware that this system relies on tax assssor data only and, thus, is rarely accurate.  A quick search of comps in the neighborhood will always lead to a more reliable estimate of value. 

These are a few good tips to follow to make the appraisal process as smooth as possible!

Economic Roundup: Week of May 7th

May 8, 2012 by · Leave a Comment 

Weaker than expected global economic data and continued uncertainty in Europe helped mortgage rates stay low and near record low levels over the past week.

The economic data released last week in the US, Europe, and China generally reflected a slowing pace of economic growth.  Spain became the eighth euro zone country to officially enter into recession, meaning that roughly half the members have seen at least two consecutive quarters with contracting economies.  Even Germany’s economy is showing signs of weakening.  Economic strength in the US early in the year has been waning recently as well.  As usual, what’s bad news for the economy was good news for mortgage rates, as slower economic growth reduces inflationary pressures.

In addition, Friday’s important Employment report fell short of expectations.  Against a consensus forecast of 170K, the economy added just 115K jobs in April, but the figures for prior months were revised higher by 53K.  The Unemployment Rate unexpectedly dropped from 8.2% to 8.1%, the lowest level since January 2009, but the decline was mostly due to people leaving the labor force.  Following a strong start to the year, the trend has been slowing, with net job growth over the last two months significantly lower than during January and February.

 Looking ahead, this week  both the Trade Balance and Import Prices reports will be released on Thursday. Then, Producer Price Index (PPI) and Consumer Sentiment will be released on Friday.  The PPI report is the biggest of the week and focuses on the increase in prices of “intermediate” goods used by companies to produce finished products.  There will also be Treasury auctions on Tuesday, Wednesday, and Thursday.