8 ways Tenafly home sellers and realtors can improve their home appraisal


Screen Shot 2013-04-26 at 11.24.13 AMIf your home is for sale in Tenafly, Cresskill, Alpine, Demarest or in any of the other surrounding towns, then this is a must read for you.  This is an item that every seller and realtor needs to key into and to fully understand.

Here’s a well thought out article I found on Reuters about how to improve your home appraisal…Eight ways to improve you home appraisal

At this time, appraisals are the one item in the sales process that big time affects every buyer and seller.  Every home buyer gets an appraisal, and every seller impatiently waits to hear the results…and sometimes the news is good and sometimes it isn’t.

One of the things that I don’t understand about sellers, and I’ll just touch on it here, is why they don’t have their own appraisal done prior to listing their home.  Not that the appraisal is the true indicator of the value of your home, but the price that the appraiser comes up with is what every lender bases their mortgage loans on…so sellers have to deal with it sooner than later. 

My advice: if you’re looking to sell your home…get an appraisal before you list it.  Then you’ll know approximately what the appraised value is, and this can help you either to price it in that range, or to push the price, and negotiate around it, if the buyers appraisal comes in much lower.  It’s not the end of the world if it’s a low appraisal, but if you already know what that number is, then you can prepare yourself for negotiating your way out of it.

Appraisals are still the biggest stumbling block to selling your home, and realtors love to use the appraisal mess as a way to keep prices lower, because in their mind buying a home is all about price.  But we consumers know that this isn’t true in most cases.

If an appraisal on a home comes back lower than the sales price, and it happens, some sellers end up losing a deal becuse the buyer can’t come up with the percentage difference between the appraisal and the higher sales price. Not that the appraisal is always correct (and that’s why you have to read this article), but it does scare people.

This will begin hurting ssome sales in Tenafly, because sales prices will start rising, especially for homes selling below $1 million. I’ve been complaining for over a year that homes at this price point in Tenafly are being under-priced by up to 10%, but no one would listen, causing home owners to lose substantial money on their sales.

Here’s the article:

By Lou Carlozo

WASHINGTON (Reuters) – When Kellie and Michael May decided to refinance their home in the New York suburbs, they wanted to take advantage of historically low interest rates. But before landing a new 30-year fixed-rate mortgage, they had to get through a home appraisal.

“It was a major stumbling block,” says Kellie May, who has owned the 4-bedroom, 3-bath colonial for seven years. Not that she and her husband were unprepared; they’d been through an appraisal for another refinance in 2010, so they knew to point out improvements they’d made to the 3,400 square foot home, and supply prices for other neighborhood properties that had sold recently.

But the appraisal came back roughly $70,000 less than the $1,230,000 the Mays were expecting, and too low to support their new loan.

They responded with a paperwork arsenal aimed at their lender, asserting that the appraisal had been based on faulty recent sales data. The loan squeaked through, after the bank crafted an exception for the Mays. It was able to do that because their loan was a jumbo loan, not subject to the more rigid underwriting standards they would have encountered if it were a conventional loan aimed at secondary buyers like Fannie Mae and Freddie Mac.

Low appraisals are becoming a bigger problem for many would-be buyers and refinancers as home values have started to stabilize and rise in some markets.

In Leesburg, Florida, for example, low appraisals have caused the cancellation of as many as 15 percent of home sales for local real estate broker Gus Grizzard.

“We are seeing higher price appreciation and are starting to run into appraisal problems,” said Charlie Young, chief executive officer of ERA Franchise Systems, a firm with a national network of real estate brokerage offices, including Grizzard’s. The National Association of Realtors reported on Tuesday that inventories of homes were low and the median price a home resale was, at $180,800 in December, up 11.5 percent in a year.

Appraisals are based on recent sales prices of comparable properties. And in rising price markets, those sales prices might not be high enough to support the newest deals. Young said there were many places in California reporting appraisal problems.

On Friday, the federal government issued new rules aimed at improving the appraisal process as it pertains to high-interest mortgages on rapidly appreciating homes.

But those rules don’t go into effect for a year, and don’t apply to most conventional loans. It pays to protect your own loan before the bank even thinks about sending that guy with the clipboard over to your house.

“The reality is that the appraiser is only there for 30 minutes at most,” says Brian Coester, chief executive of CoesterVMS, a nationwide appraisal management company based in Rockville, Maryland. “The best thing a homeowner can do to get the highest appraisal possible is make sure they have all the important features of the home readily available for the appraiser.”

Here are eight ways you can bolster your appraisal:

MAKE SURE APPRAISER KNOWS YOUR NEIGHBORHOOD

Is the appraiser from within a 10-mile radius of your property? “This is one of the first questions you should ask the appraiser,” says Ben Salem, a real estate agent with Rodeo Realty in Beverly Hills, California.

He recalled a recent case where an appraiser visited an unfamiliar property in nearby Orange County and produced an appraisal that Salem said was $150,000 off. “If the appraiser doesn’t know the area intimately, chances are the appraisal will not come back close to what a property is really worth.”

You can request that your lender send a local appraiser; if that still doesn’t happen, supply as much information as you can about the quality of your neighborhood.

PROVIDE YOUR OWN COMPARABLES

Provide your appraiser with at least three solid and well-priced comparable properties. You will save her some work, and insure that she is getting price information from homes that really are similar to yours.

Websites including Realtor.com, Zillow and Trulia offer recent sales prices and details such as the number of bedrooms and bathrooms in a home.

KNOW WHAT ADDS THE MOST VALUE

If you’re going to do minor renovations, start with your kitchen and bathrooms, says G. Stacy Sirmans, a professor of real estate at Florida State University. He reviewed 150 variables that affect home values for a study sponsored by the National Association of Realtors. Wood floors, landscaping and an enclosed garage can also drive up appraisals.

DOCUMENT YOUR FIX-UPS

If you’ve put money into the house, prove it, says Salem.

“Before-and-after photos, along with a well-defined spreadsheet of what was spent on each renovation, should persuade an appraiser to turn in a number that far exceeds what he or she first called out.”

Don’t forget to highlight all-important structural improvements to electrical systems, heating and cooling systems – which are harder to see, but can dramatically boost an appraisal. Show receipts.

TALK UP YOUR TOWN

If your town has recently seen exciting developments, such as upscale restaurants, museums, parks or other amenities, make sure your appraiser knows about them, says Craig Silverman, principal and chief appraiser at Silverman & Co. in Newtown, Pennsylvania.

DISTINGUISH BETWEEN UPSTAIRS AND DOWNSTAIRS

Many homeowners covet that refinished basement, but that doesn’t mean appraisers look at it the same way. “Improvements and additions made below grade, such as a finished basement, do not add to the overall square footage of your house,” says John Walsh, president of Total Mortgage Services in New York. “So they don’t add anywhere near as much value as improvements made above grade.”

According to Remodeling magazine, a basement renovation that cost $63,000 in 2011-12 will recoup roughly 66 percent of that in added home value. That’s not as good as an attic bedroom, which will recoup 73 percent of its cost. Even similar bedrooms typically count for more if they are upstairs instead of downstairs.

CLEAN UP

Even jaded appraisers can be swayed by a good looking yard. “Tree trimming, cleaning up, a few flowers in the flower beds and paint touch up can all help the appraisal,” says Agnes Huff, a real estate investor based in Los Angeles.

That advice holds true indoors, too. “Get rid of all the clutter in your home,” says Jonathan Miller, a longtime appraiser in New York. “It makes the home appear larger.”

GIVE THE APPRAISER SOME SPACE

Don’t follow the appraiser around like a puppy. “I can’t tell you how many homeowners or listing agents follow me around in my personal space during the inspection,” he says. “It’s a major red flag there is a problem with the home.”

And while you’re at it, make the appraiser’s job as pleasant as possible by giving your home a pleasant smell. At a minimum, clean out the litter box. Baking some fresh cookies and offering him one or two probably won’t sway your appraisal, nor should it. But it couldn’t hurt.

(The writer is a Reuters contributor. The opinions expressed are his own.)

(Follow us @ReutersMoney or at http://www.reuters.com/finance/personal-finance; Editing by Linda Stern and Tim Dobbyn)

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4 thoughts on “8 ways Tenafly home sellers and realtors can improve their home appraisal”

    1. Sizzle, you’re so wrong about my take on the market.

      If you read my posts closely, you’ll see that I only talk about raising prices for specific towns (Tenafly) and only at specific price points (Tenafly, below $1 million…and more specifically below $500K).

      As I point out for Alpine and Saddle River,if you’re trying to sell a luxury home, then welcome to a nightmare. In my posts, I show that of the few luxury homes that have sold recently, price cuts have been up to 40% off of the asking price. There’s no demand for these homes, and the prices will have to come dome for them to sell.

      The same is happening in Tenafly on the Luxury side…over $3 million. Though a few homes have sold at this range (new homes), others are still on the market for a long time. Those prices will eventually be adjusted downward for them to sell.

      All of my conclusions are based entirely on the numbers…as are seen on my charts and graphs, which I provide as back up on my posts. If you really want to understand the market, then you need to look no further than these charts.

      There are some homes listed for sale in Tenafly, for only the value of the land…so the house is worth nothing? Underselling homes kills a community…it affects the price of other sales, and it kills appraisals and thus financing. We are at the point in Tenafly where the demand is high and inventory is very low.

      For years realtors argued for lower prices because there was no demand and the inventory was through the roof. They (realtors) can’t have it both way…now that the tide has reversed, prefaces at specific price points need to rise.

      Do I think more sales will be had…no. As my charts point out, we have and have had a fairly stable sales volume since the market crashed in 2006 (long before 2008)…for most of the price points. We will not go back to the crazy sales prices and volume that we had only between 2003-2005

      And btw…I’m the only person in Bergen County who provides this information…you can’t find this anywhere else, and there isn’t an agent or brokerage firm who will provide it. It’s easier for some to make up what they want you to know

      I’m a home builder and real estate developer by trade, and I got my license many moons ago because of my dissatisfaction with realtors: they didn’t know how to market my homes (lawn signs and mld listings aren’t marketing), they didn’t know the market place, didn’t care to understand the homes that I was building, and they didn’t care what my homes sold for…only that they sold at some point in time.

      I developed Tamcrest Estates in Alpine/Cresskill and I sold the properties and the homes I built for considerably more than brokers thought they would sell for…and therefore I made a lot more money. Going back 30 years, I always sold my homers for more than realtors thought they would sell for.

      And now I’m taking my experience, and using it to help sellers and buyers.

      On my next post I’ll do more into the numbers for 2013.

      Did you know that sales in Tenafly are down 31% in 2013 (Jan, Feb, March) compared to 2012. I’ll show specifically what price range is getting hit.

      Hope I answered your question clearly 🙂

  1. Thanks for the response. I have seen A LOT more Tenafly listings pop up in the last week or so. Spring selling season seems to have started a bit later this year…I’m curious if these people wanted to sell a few years ago but held off for a better maketplace. Also, there is a lot of new construction happening around town. Sisson, Engle, Elm, etc. new houses being put up all over.

    1. Yes, there’s A LOT of new homes being built in Tenafly…especially compared to other towns…and this is one of the contributing factors for me telling sellers in specific price ranges… and realtors, that they should be raising their prices. 

      The opportunities to raise prices can’t get any better than this in Tenafly…so what is everyone waiting for! 

      As a resident, I’d rather see less homes sold (because to a point it’s an irrelevant number), but sell at higher prices, than the converse…to sell more homes at lower prices.

      I understand why realtors want to sell more homes, even at lower prices, but this isn’t about them. This is now all about stabilizing and increasing the value of our homes in Tenafly.

      The time for higher prices has arrived!

      So why am I the lone voice promoting what is really happening in the market?

      As for the spring selling season…the spring season has been happening for quite some time, but consumers are doing their “looking” online. Just because they’re not talking to realtors as much as they used to, doesn’t mean that there isn’t vibrant activity happening online, and out of sight.

      Seriously, things are looking good for home sales in Tenafly…under $1.5M. For homes priced above $1.5, it’s time for realtors to find a better way to market them…because the traditional way isn’t working anymore.

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