Residential Real Estate Appraisal

An appraisal is simply an opinion of value. Some appraisals are a professional appraiser's opinion, others are guesses. Still others are based upon the sometimes harsh reality of the marketplace. The most important factors for appraisers are figures of recent real estate sales involving comparable properties. Basically, there are only two opinions that matter.

(1) The list price is a wishful-thinking value, merely a hopeful estimate. It is set by the seller. The sale price is the real value. It is determined by you, the buyer. Of course, the price you finally agree to pay is partially determined by the seller through the negotiation process. But you and only you decide how much you are willing to pay.

The lender's is the second opinion that truly matters. The bank usually employs appraisers, although sometimes it uses third party fee appraisers. A value of the property is determined, and the lender will then make a mortgage loan based on this figure.

If the lender's appraisal comes in lower than your agreed-upon sale price, you may not be able to buy the home. The lender bases its lending decision upon this professional opinion of value. It will only loan a percentage of this figure. Therefore, if you are counting on using the lender's funds in a certain amount to finance the purchase of your home, a low appraisal from the bank can seriously damage your first time home buying efforts.

The lender's opinion of value can be disputed. The appraisal department at a bank will usually welcome previously overlooked comparable sales data (comps) and other factors which might affect their appraisal. Sometimes there were sales in the area of which the appraiser was unaware. You and/or your real estate agent often know about non-MLS sales of which the bank appraiser has no knowledge.

Perhaps you decided to buy this house because the seller spent thousands on structural and mechanical system upgrades. The lender is not to aware of these value-enhancing improvements. When you bring them to the appraiser's attention, you quite possibly will induce the appraisal department to raise the appraisal figure. The critical point to remember about this is: If the lender produces a low appraisal, you can always contest it.

You might hear complaints when the lender's appraisers express a low opinion of value - Why don't they just appraise at sales price? After all, THESE buyers are willing to pay that much. Surely others would, too. Ah, but that's NOT necessarily true. Some buyers (hopefully not you) do agree to pay too much. The lender needs to protect itself from these lovestruck buyers who must have that home. If the bank eventually has to become the owner, by having to foreclose, it must have reasonable expectations of being able to recover all or most of its investment.

When negotiating the purchase of your home, be sure you are always being prepared to walk away from the transaction if the seller is too unreasonable. There are plenty of other homes available. If you do this, the lender's real estate appraisal will almost certainly come in at or above your sales price and thus cause you no problem.

Keep the Golden Rule in mind: The banks have the gold, so they make the rules.

Paul Anderberg
http://www.first-time-home-buying.net

Mr. Anderberg is the author of many helpful articles about home buying. Visit his website to read more. Several others are also available on this site.

Real Estate Investment by Foreign Nationals Uh oh?

So inspiration hit me in Montreal this weekend after some drinks. It wasn't the alcohols effects that caused it (I swear!!!), but the not so wonderful cost.

When I went to school in Burlington VT ('97-'01), my friends would frequent Montreal for numerous reasons. A few that come to mind were the beautiful scenery (a.k.a. strip clubs), the drinking age of 18, and the fact that they could go out to eat, get surf and turf, appetizers, and drinks for $25 American.

Not so anymore..... the same principle definitely effects peoples purchasing decisions in most realms, Real Estate included. I found an interesting article http://travel2.nytimes.com/2005/05/29/realestate/29lizo.html?ex=1154059200&en=399b29e55613ce54&ei=5070 titled Who Needs the Riviera, that focused on a small group of Europeans taking advantage of their strong Euro in the American Real Estate market. The article also indicated that it wasn't necessarily a small group of Europeans settling in the area.

The current exchange rates are not just favoring those with a strong Euro versus the Dollar, however it also appears to be fueling some currency speculation through housing. Another article http://www.myrtlebeachonline.com/mld/myrtlebeachonline/business/15045250.htm South Korean cash flows into U.S. real estate shows a perfect example of the reasoning behind the speculation.

They (wealthy Koreans) are betting that the U.S. dollar will strengthen, causing the value of their U.S. holdings to appreciate when converted into Korean currency, and that even slower home-price appreciation in the U.S. will continue to beat returns in Korea, where high taxes on real-estate profits discourage speculation.

With interest rates on the rise, I think that their guess that the US dollar will strengthen, is a very educated guess.

So is this a good thing or not? Well it depends on who you are.

If you're a homeowner worried about the value of your home in an uncertain market, this should ease some of your stress. Foreign investment can be a great thing for homeowners in a certain area. The increase in demand and foreign money to an area that did not have it prior, will absolutely help increase/sustain property values of other homes around the area.

For those of you still renting waiting for just the right time......If you're going to be in the same area for a few years, and you have good credit, the best time is now.

And for potential investors just waiting around for the bubble to pop and great deals to start popping up from people who overextended themselves, it appears as though you might have some foreign competition on some of those purchases.

Jon Ernest is the Principal Broker of Spotlight Realty. A small, independently owned, full service residential real estate agency in Brookline, Massachusetts.

http://www.SpotlightRE.com
Condos for sale
See this article and other rants and raves on my Cambridge Brookline Boston Real Estate Blog

New Housing and Planning Delivery Grant

As the report came that Ministers have formally begun consultations on a new housing and planning delivery grant (HPDG) in line with the recommendations suggested by the Barker review of housing supply the prices seem to be roaring in Sussex Farmland.

The news came when Farmland in Sussex are being sold by different Land Investment Companies and the government has already made it clear that this funding would be in addition to local infrastructure investment, give local authorities the flexibility to invest in their area and allow them to keep additional council tax receipts for new homes. Sussex Farmland is known for its closeness to nature and old buildings.

Seeing this the prices of the Sussex Farmlands are set to go higher and this leaves the investors with a dilemma of whether to invest in more plots of land, sell it or hold the piece of land so as to gain maximum.

A consultation document just published by the Department for Communities and Local Government (DCLG) said the measure should:

- Strengthen the incentive for local authorities to respond to local housing pressures.

- Support increased housing delivery to meet local needs.

- Encourage local authorities to become very actively involved in the delivery of new housing.

- Return the benefits of growth to the community through new funding streams.

- Incentivise efficient and effective planning procedures.

The government's aim is that the housing incentive element would be awarded to local planning authorities and urban development corporations (UDCs) and paid starting in 2008 when the existing PDG regime is due to end.

The author is a Land Expert based in the UK.

Canada's Beautiful Fraser Valley A Buyers & Sellers Market

So you think the market is hot? Why is that? Many people follow the crowd and go with what the media is promoting. Some of the hard core factors that affect real estate are Interest rates, Taxes, Rent Controls, Economy, Population and much more. Let?s get started. Interest rates in British Columbia has a direct connection between prices in the lower mainland and Fraser Valley area?s. The higher the rates, the lower the prices. The lower the rates, the higher the prices. When the rates are low, more people can afford to buy their first home or an investment property in Abbotsford, Langley or Vancouver. This puts pressure or a greater demand on the Fraser Valley market.

With our municipal and provincial taxes in British Columbia you?d be affected with property values. When your in an area with high municipal property taxes this can be a deterrent to a purchaser. A rise in taxes could cause real estate prices to drop. Provincial taxes, such as a property purchase will limit the number of buyers. These factors would affect the overall amount of real estate activity as well as prices in the Langley, Burnaby, Chilliwack or other Fraser Valley Markets.

Naturally, provincial rent controls and related restrictions could have a limiting effect on how much an investor in real estate can be active. This chain effect limits the number of potential buyers on the market. Rent controls are governed by provincial legislation. Not all provinces have rent control, but any province can introduce them or modify their existing legislation at ANY TIME. If your curious about your rental caps simply go to any search engine and type in ?landlord tenant law in British Columbia?. You will see the criteria for increasing rents in your Fraser Valley area.

The confidence in the economy is an important factor in stimulating home buyers and investor activity in the Fraser Valley. If the mood is positive then more market activity will occur in Langley, Richmond or wherever you live in the lower mainland. Conversely, if the economy is stagnant, the opposite will occur resulting in a decreased number of home buyers. Luckily the Fraser Valley has opportunities that attract immigrants from outside the country and other provinces. This increase demand increases the popularity of prices.

With lower vacancy levels in the area, this could stimulate a first time home buyer to buy a home. Also, renters who can't find a place to rent may borrow from relatives or find other creative ways to enable them to purchase a home rather then rent a home in the Fraser Valley. Our location with trees, streams mountains and fresh air attracts people of all places. The public perception of a certain geographic location or type of residential property or building affects the prices. Now that you are aware of many factors that effect Real Estate in general, is it a good investment? That is for you to decide!

Shane Toews is a Licenced Realtor who helps others to educate themselves on current real estate issues. He also provides assistance on how to locate quality homes, apartments or vacation rentals in Canada's Fraser Valley area. Visit his website RentFraserValley.com for more information on Canada's Fraser Valley Real Estate Market

Get Ready to Shop for Foreclosures

Decent and value-for-money property is on top of everyone's priority. May it be out of sheer necessity (in the case of newlyweds) or as an investment or both, a house remains to be one significant and indispensable property. Those who are planning to purchase the proverbial dream house have several options other than buying the first property offered to them. If buyers are not challenged with a strict budget, then they can splurge by having their houses custom-made or by scouting for the house of their fancy in real estate magazines or websites. To be honest, there's no thrill in shopping for a house if the buyers have more than enough money to buy it. Indeed, it is much more exciting to look for a house if there's a certain budget. It's very much like shopping in Saks Fifth Avenue and flea markets. Shopping in flea markets packs much adventure and surprise because you're in for the thrill of buying something of great worth for a dirt-cheap price. The same goes with buying foreclosures property. Scouting for good foreclosures houses or buildings entails patience and endurance, but in the end, it's all worth it.

Experts in the field of home buying advise consumers to explore the possibilities of purchasing foreclosures. This is the general term for properties, which are used as payment assurance for debt or mortgage and given up by the original owners as payment for the lender. It is also possible that the owners failed to pay the mortgage installment set by the lender. The latter may be an individual, bank, or cooperative. After the mortgaged property is foreclosed, the lender often declares that the property's on sale by publishing it on dailies or public newsletters. Buyers should have a nose for some great properties at stake. The beauty of buying foreclosed properties is that it is usually much cheaper than brand new ones or those sold by real estate agents.

Once a potential buyer spots a foreclosures property, he should do his assignment immediately since there's a big chance others are also interested in that same structure (especially if it's cheap and in good condition). The buyer should conduct research and ocular inspection of the structure to personally find out if it needs minor refurbishing or major renovation. It is also wise to check the going rates for real property in the specific area. This gives the buyer an idea if the structure is really sold for a lower price or not. While a foreclosures property may seem like a good buy at first, it should be given a benefit of the doubt. Buyers should do the necessary legwork to ensure he is really purchasing a gem.

For more valuable information on Foreclosures, please visit http://www.miamiforeclosures.com

In Commercial Real Estate Always Get an MAI Certified Appraiser

The appraiser that you hire for your commercial investments before you buy can have a great impact on the amount of money you spend and your chances of getting funding from a lender. Most lenders will not accept just any appraiser. If you get an appraisal with an appraiser that a lender does not accept, you have just wasted your time and money, and you are no closer to getting the property you want.

In the world of commercial real estate, not all appraisers are considered equal. It takes a certain expertise and knowledge to correctly appraise commercial property, and not just anybody is qualified. There are two types of appraisers, a fee appraiser and a staff appraiser. A fee appraiser is generally available to the public for hire, and a staff appraiser works for a specific lender or lending firm.

Let's look at what makes a qualified appraiser and how they can help you purchase the property you want with as little hassle as possible.

It is common practice for a lender to appoint the appraiser that is to appraise the property in question. This practice is in place because there are dishonest buyers who work with certain appraisers that will inflate the property's true value. This, in turn, allows the buyer to borrow more money than what a lender would normally allow, thus increasing the lender's risk.

Inflating a property's true market value is surprisingly easy because appraisals are simply guesstimates of a property's true market value. They are interpretations based on the surrounding property and selected criteria. An appraisal can be ?fixed? according to a person's interest. That is why the two parties must not have any prior dealings or common interest in the subject property.

A very widely used and accepted type of appraiser is one that is certified by the American Institute of Real Estate Appraisers. They are members, making them M.A.I. designated. Most lenders will require that you use only an MAI appraiser. These MAI appraisers have gone through intense study, years of practice, and have had to perform under tight supervision while appraising many different properties.

Most MAI appraisers will not conspire with a borrower because there is too much to lose and too much invested in their practice. For this reason, most lenders will accept MAI appraisals regardless of whether or not they know the appraiser personally. For the most part, lenders will have trusted appraisers that they work with all the time, and will require that you use only their appraisers. Be sure to get clarification on this issue before you hire an You can trust MAI appraisers to perform an accurate evaluation of your prospect property. With this appraisal, you will be able to get the proper amount of money loaned on the property and not come out short.

It is always a good idea to research your appraiser and view some of the work that he or she has done in the past. The appraiser and the appraisals should be of the utmost professional quality because so much is riding on their appraisal. Even if it costs you more money, always use an MAI appraiser to avoid problems with the lender and unnecessary expenditures.

MAI appraisers are crucial to your commercial real estate investing endeavors, and can carry quite an impact on the money that can be loaned to you. To get the money you expect from a lender, use a MAI appraiser every time!

Tony Seruga, Yolanda Seruga and Yolanda Bishop of http://www.maverickrei.com specialize in commercial and investment real estate. As of May, 2006, they and their partners are managing over $600 million dollars worth of new projects.