An FHA approved, certified real estate appraiser located in Spokane, WA

I get six or seven people a year that ask me how I appraise their home. The number one criteria that I use are comparable sales. I look at your home to determine the overall quality. I verify the square footage and the amenities and then I look for comparable properties.

And now it’s your turn. With some research, you’ll be surprised at how accurate you may be at determining the value of your home. Read on to find out how you can appraise your home.

I’ve been a certified real estate appraiser for almost a decade now. I’ve appraised every type of residential property for many different lending institutions and here’s what I’ve learned. If you have the proper database, you can appraise your own home. However, due to regulations, only a licensed or certified real estate appraiser can determine the value of your home so that it can be used for a financing decision. This article is not legal advise nor can if be used as
legal advise. If you’re having troubles, please consult a professional.

How easy is it to appraise your own home?

Determining the value of your home is no more difficult than shopping for a car or picking out bananas at your local grocery store. All you need are comparables. For example, find three cars like the one you’re going to buy and, presto, you’ve got a good idea how much you should pay for your car. It’s that simple. When picking out bananas, compare the price with the quality and pick out the bananas that offer the best quality, price etc. Find three sold homes and a few
listings like yours and you’ve just determined the value of your house. This is called the sales comparison approach. This is one method real estate appraisers use to determine the value of your home.

What is the best method to use when appraising my home?

Residential real estate appraisers’ determine the value of your home using three methods. The sales comparable approach, the cost approach, and the income approach. The easiest and most accurate method to determine the value of your home is the sales comparison approach. This is when you select homes that are most similar and proximate to your home.

How do I find comparable properties for my home?

Ask a friend (realtor, appraiser, and investor) that may have access to the multiple listing services if they would be able to provide you with comparable sales in your area. If you need a few comparables around Spokane, WA, I may be able to help you. If you have email, I’ll pull some comparable sales and email them to you for free. I will not be able to indicate a value without completing a full appraisal, but at least you’ll have some sales to work with. You’ll have
to use this article to pick the best sales. If I send you comparables, I will not make any guarantee if these are even the best comparables for your home. Only that they are homes that have sold in your neighborhood. You may have to consider going outside your neighborhood to find comparable homes. If this is the case, call a professional real estate
appraiser. And remember, sometimes, even real estate appraisers need second opinions.

What are the best websites for free real estate value searches?

Go to any site on the internet that provides public information about homes that have sold or that provide listings in your area. Listed below are a few that I am aware of. Most counties offer free on line access to basic housing information. Spokane country is one of those counties. Try this link to help verify the sales and look for new sales in public records (http://www.spokanecounty.org/pubpadal/Search.aspx). Some of these sites will give you
listings or homes in your area. Some of these sites will generate what your home may be worth. They will give you a list of homes that have sold.

I find many of these sights to be surprisingly accurate. However, if you are outside the city or you have a larger variation of housing designs within your neighborhood, you will need to go through these homes and pick the ones that are most similar to your home. If you can’t find photos, drive around and see what the home looks like and select the comparables that are most similar to yours. Read the description and ask questions to determine if the interior of the home has been updated like yours. Sometimes you’ll find the owner of the home out front. Ask them a few questions. Usually they are more than happy to help you.

www.realtor.com
www.zillow.com
www.trulia.com

http://realestate.yahoo.com/Homevalues

http://www.realestateabc.com/home-values/

What to look for when you’re selecting your comparable sales?

Square footage: What is the square footage of your home? This is determined by measuring from the outside of your home. You can look this information up for free on the internet or at your county assessors’ office. Sometimes it is listed on the MLS sheet. The above grade square footage includes the main level, the second level and any levels considered above ground level. Basement is considered any portion of your home that is below grade. If your home is a split-entry and the basement is half under ground, this is considered basement. Design: Is your home a ranch style home with a crawl space or is it a split-entry with two bedrooms on the main level? Is your home a two story? Is your home a manufactured home?  Is your home a singlewide? Is your home a log cabin or is it a log sided manufactured home?

Bedrooms and bathrooms: How many bedrooms and bathrooms do you have on the main level? How many bedrooms and bathrooms do you have on the second level? Is your basement finished? How many bedrooms and bathrooms do you have in the basement?

Traffic: Is your home located on a busy street? Do you have to back out of your driveway into an arterial street? Does your home back to a railway? Is your home located next to an airplane runway? Is your home located next to transmission towers?

Views: Does your home offer mountain views? Does your home offer views of a creek, river, or lake? Are you located on the lake or across the street from the lake? Do you have a view of the city lights? Do you have a view of the smoke stack at the paper factory? Date of sale or time of sale: When did the home close? This information can be found in
public records. MLS will give you time of sale. This may not be accurate, so confirm the sale with public records.

Lot and site size: Is your home on a level lot? Is your home located on a steep lot? Is your lot larger or smaller than the homes around your home?

Vintage: Is your home a newer home located in an older subdivision? Or is it an old home in a new subdivision? Find homes that share the most similar actual age of your home.

Outbuildings and garage count: Do you have a barn or an outbuilding located on your parcel? Is your property cross fenced for animal storage? Do you have a one car garage or a two car garage? Do you have a second garage? Outbuilding and garage storage is an important indicator of value. Try to find something similar to your home.

Zoning: Is the zoning the same as your home. Call the county or city to find out what the zoning of your parcel is.

Making real estate appraisal adjustments

Many times appraisers make adjustments to the comparables to compensate for what you may or may not have. Here’s what I’ve found out. If you “bracket” the lot size, the square footage of the home, the above grade bedroom count, find homes with similar split bedroom count (i.e. one bedroom upstairs and two bedrooms on the main level) and the most important criteria, whether it is the view, the barn or the square footage of the home, you should not need to make any adjustments. Just use reasoning skills to determine the best comparable and give most of the emphases to the home(s) that are most similar to yours.

Now when I complete an appraisal, I do make adjustments of any item that warrants an adjustment. But many times, you’ll find that regardless of the adjustment, your home still is within a price range. Picking the home that is most similar to your home is the easiest way.

How do I select the best comparable homes?

Locate homes that are most proximate to your home that offers similar amenities. Pick sales that are within one year (preferably within 6 months). Now find all of the pending and active sales within your neighborhood. Once you’ve gathered these sales, it’s time to go to work. Sort the piles and select the most similar closed sales. The criteria I use are to select all of the homes with the most similar design and appeal that are most proximate to the subject. For
example, if the subject is a ranch style home with 1200 square feet on the main level with three bedrooms and one bathroom above grade and 1200 square feet of finished basement, with 5 acres of land and a barn, this is what I try to find. Sounds easy enough, right? Under fairy tail conditions, you’ll find three to six homes that are all twins of your home that offer the same home, same land and same barn. Of course, this is a dream. Pinch yourself and move on.
Here is reality. Find homes that best support the market area. Find homes that best support your amenities (barn, lot size, etc). Pick the homes that offer the closest proximity and offer the most similar amenities to your home.

A few detailed questions on how to select the best comparable sales for your home.

If my home is a newer home in an older subdivision, how to I pick the best comparables? I try to select two homes in the immediate neighborhood, even if they are older home that have been updated to similar levels as the subject. Next I located two other sales that may be within three to five miles from the subject that offer newer homes surround by older homes. This will give you a clear idea of homes that best support the immediate market area and homes that
best support newer construction. If you can’t find any newer homes, keep going back in time and/or distance from your home until you find something similar. If it is over a year, you may have to make an adjustment for the time of sale. If you can’t locate recent sales, you may have to contact your real estate appraiser.

If my home is a two bedroom home that offers square footage to similar three bedroom homes, what is the best way to locate my comparables? Locate two home that lend support for two bedroom design and two homes that bracket the square footage of your home.

If my home offers a larger shop or outbuilding, how do I locate the best comparables? You must single out homes with larger shops. Again locate a few homes that support the immediate market area. Next, locate homes that support the shop. Even if it over one mile from the subject.

If my home fronts a busy arterial street, how do I find comparable properties?
Find homes that are located on any busy arterial street within one to three miles from your home. If you find one or two sales on busy arterial streets and one or two similar homes next to your home, that should do it.

By now you should see a pattern on how to locate the best comparables for your home. First find comparables that support your immediate market area. Next, find comparables that support the amenities, design, square footage and lot size etc, of your home. If your home is similar in design and appeal to your market area, finding three to five homes that are similar in lot size, square footage, bedroom count, etc, will be easy.

Now it’s your turn.

Once you complete the research, you’ll begin to get a fuzzy feeling of what your home is worth. Just like when you complete your research to determine the best price for that car you’ve been eyeing.

If you would like Tim to complete an appraisal for you in or around Spokane, WA, call him at 509-924-4345

Tim Page, Appraisals by Page, is a certified real estate appraiser in Spokane, WA. Please feel free to visit him at www.appraisalsbypage.com

II. The lender shall ensure that the borrower is provided, free of charge, a copy of any appraisal report concerning the borrower’s subject property immediately upon completion, and in any event no less than three days prior to the closing of the loan. The borrower may waive this three-day requirement. The lender may require the borrower to reimburse the lender for the cost of the appraisal.

III. The lender or any third-party specifically authorized by the lender (including, but not limited to, appraisal management companies and correspondent lenders) shall be responsible for selecting, retaining, and providing for payment of all compensation to the appraiser. The lender will not accept any appraisal report completed by an appraiser selected, retained, or compensated in any manner by any other third-party (including mortgage brokers and real estate agents).

IV. All members of the lender’s loan production staff, as well as any person (i) who is compensated on a commission basis upon the successful completion of a loan or (ii) who reports, ultimately, to any officer of the lender other than either the Chief Compliance Officer, General Counsel, or any officer who is not independent of the loan production staff and process, shall be forbidden from: (1) selecting, retaining, recommending, or influencing the selection of any appraiser for a particular appraisal assignment or for inclusion on a list or panel of appraisers approved to perform appraisals for the lender; (2) any communications with an appraiser, including ordering or managing an appraisal assignment; and (3) working together in the same organizational unit, or being directly supervised by the same manager, as any person who is involved in the selection, retention, recommendation of, or communication with any appraiser. If absolute lines of independence cannot be achieved as a result of the originator’s small size and limited staff, the lender must be able to clearly demonstrate that it has prudent safeguards to isolate its collateral evaluation process from influence or interference from its loan production process.

V. Any employee of the lender (or if the lender retains an appraisal management company, any employee of that company) tasked with selecting appraisers for an approved panel or substantive appraisal review must be (1) appropriately trained and qualified in the area of real estate and appraisals, and (2) in the case of an employee of the lender, wholly independent of the loan production staff and process.

VI. In underwriting a loan, the lender shall not utilize any appraisal report prepared by an appraiser employed by:

1.the lender;
2.an affiliate of the lender;
3.an entity that is owned, in whole or in part, by the lender;
4.an entity that owns, in whole or in part, the lender
5.a real estate “settlement services” provider, as that term is defined in the Real Estate Settlement Procedures Act, 12 U.S.C.§ 2601 et seq.;
6.an entity that is owned, in whole or in part, by a “settlement services” provider.
The lender also shall not use any appraisal report obtained by or through an appraisal management company that is owned by the lender or an affiliate of the lender, provided that the foregoing prohibitions do not apply where the lender has an ownership interest in the appraisal management company of 20% or less and where (i) the lender has no involvement in the day-to-day business operations of the appraisal management company, (ii) the appraisal management company is operated independently, and (iii) the lender plays no role in the selection of individual appraisers or any panel of approved appraisers used by the appraisal management company.

Notwithstanding these prohibitions, the lender may use in-house staff appraisers to (i) order appraisals, (ii) conduct appraisal reviews or other quality control, whether pre-funding or post-funding, (iii) develop, deploy, or use internal automated valuation models, or (iv) prepare appraisals in connection with transactions other than mortgage origination transactions (e.g. loan workouts).

VII. The lender will establish a telephone hotline and an email address to receive any complaints from appraisers, individuals, or any other entities concerning the improper influencing or attempted improper influencing of appraisers or the appraisal process, which hotline and email address shall be attended only by a member of the office of the General Counsel, Chief Compliance Officer or other independent officer. In addition: (1) each appraiser now or hereafter on any list of approved appraisers, or, upon retention by the lender, will be notified, in a separate document, of the hotline and email address and their purpose; and (2) each borrower, as part of a cover letter accompanying the provided appraisal, will be notified of the hotline and email address and their purpose. Within 72 hours of receiving any complaint, the lender will begin a preliminary investigation of the complaint and upon completing the inquiry (or, after a period not to exceed 60 days, whichever shall come first) shall notify the Independent Valuation Protection Institute and any relevant regulatory bodies of any indication of improper conduct. The name and any identifying information of the person or entity that has filed such a complaint shall be kept in strictest confidence by the office of the General Counsel, Chief Compliance Officer or other independent officer, except as required by law. The lender shall not retaliate, in any manner or method, against the person or entity which makes such a complaint.

VIII. The lender agrees that it shall quality control test, by use of retroactive or additional appraisal reports or other appropriate method, of a randomly-selected 10 percent (or other bona fide statistically significant percentage) of the appraisals or valuations which are used by the lender, including the results of automated valuation models, broker’s price opinions or “desktop” evaluations. The lender shall report the results of such quality control testing to the Independent Valuation Protection Institute and any relevant regulatory bodies.

IX. Any lender who has a reasonable basis to believe an appraiser is violating applicable laws, or is otherwise engaging in unethical conduct, shall promptly refer the matter to the Independent Valuation Protection Institute and to the applicable State appraiser certifying and licensing agency.

X. The lender shall certify, warrant and represent that the appraisal report was obtained in a manner consistent with this Code of Conduct.

XI. Nothing in this Code shall be construed to establish new requirements or obligations that (1) require a lender to obtain a property valuation, or to use any particular method for property valuation (such as an appraisal or automated valuation model) in connection with any mortgage loan or mortgage financing transaction, or (2) affect the acceptable scope of work for an appraiser in connection with a particular assignment.

This was taken from the appraisal press Here is a link to a pdf download

New Truth in Lending disclosure requirements take effect July 30, 2009 and the timing of your closings may be impacted. With the new regulations you may need to plan for at least a 30-day close if the homebuyer is financing the property.

As of July 30, lenders will be required to comply with revised Truth in Lending Act good faith estimate (“early disclosure”) requirements which will:

•require delivery or mailing of the early disclosures within three business days of receiving a consumer’s mortgage loan application. A lender also must wait until at least seven business days after delivery of the disclosures before consummating the mortgage loan.

•require corrected disclosures to be delivered at least three business days before consummation if the annual percentage rate (APR) provided in the early disclosures changes more than .125% from the initial Truth in Lending Disclosure.

•expand the requirements to mortgage loans secured by any dwelling of a consumer. The requirements no longer are limited to a consumer’s “principal dwelling.” The early disclosure requirements also now cover refinancings and home equity loans.

•prohibit a lender from charging a consumer any fee, except to obtain a credit report, until after the early disclosures have been provided.

•permit a consumer to expedite the closing of a mortgage loan subject to the early disclosure provisions to address a personal financial emergency, such as foreclosure.

•inform a consumer that he or she is not required to complete the transaction because the consumer has received the early disclosures or applied for a loan.

Discuss these new provisions with your lender or mortgage broker as well as your settlement agents to avoid unnecessary delays during the transaction. Provide the settlement agent information to the lender as early in the process as possible. It’s critical that any third party fees that impact the APR are accurate.

Buyers need to understand that their interest rate impacts their APR. Until that rate is locked with their lender, which is at the buyer’s discretion, the initial Truth in Lending Disclosure (TIL) will not be accurate, so a PreClosing TIL will likely be needed. It’s recommended that buyers should minimally plan on locking at least 10 business days prior to the date they wish to close.

For more information, go to http://www.fdic.gov/news/news/financial/2009/fil09026.html