Informed Investor Alliance
Interested in buying a home in Southern California but don’t know how? Would you like safe and solid info on Real Estate Investing or Market reports and trends? We’ve got you covered with free sessions at Citrus College on April 23rd.
The event will be held from 11am – 3pm with an hour lunch break. There are 3 different sessions, each with 4 classes to choose from ranging from flipping to first time buying. We feel honored to be asked to teach 2 classes – Investing and Market Report. Come join us and learn how to buy real estate! The first 100 registrations receive a free lunch on Citrus Real Estate Club – just sign up below.
Yes, sign me up for Citrus College’s Home Fair on April 23rd!
Selling a home in Southern California is no small job. There are hundreds of items that could be attended to – but which are most important?
Smart sellers get the inside scoop early – fill out the form below to receive a comprehensive report: 29 Essential Tips that Get Homes Sold FAST & for Top Dollar.
In addition, you’ll receive the latest Orange County Reports On Housing update. Find out out the market temperature, average days it takes to sell, and how many homes are on the market in your city.
A combined $59 value that could net you thousands is yours free by filling out the form below. Get this expert advice at your fingertips – guaranteed to your door within 7 days!
If you’re tired of ‘overdone’ properties that are completely outside your taste, then this Mission Viejo property for sale should be a breath of fresh air. With solid structure, but old decor, this is the perfect project for the buyer who wants a good deal and the opportunity to do their own upgrades. Priced at just $684,900 – it won’t linger long!
This traditional 2 story offers 3 beds, 2.5 baths, 2 car garage, and 1776 sq ft on a 5000 sq ft lot. All schools are rated 9 or 10, and it’s on a single loaded street walking distance to James Gilleran park.
Additional features include:
- Wet bar
- Master bath with separate tub & shower
- Master balcony
- Inside laundry room
- Arched doorways
- Downstairs newer tile
- Recirculating hot water – it’s instant!
- Wired for speakers in & outside, cable too
- Air conditioning
- Outdoor LED lights in front.
- HUGE extra storage closet in office
You won’t find this home on the MLS, so beat the rush! For a private showing call or text Angie at 949-338-7408 or simply fill out the form below!
Ever wonder how people really come up in real estate? It doesn’t require a huge amount of capital, brains, or hard work. The process is surprisingly simple, and we’ll teach you the jist in just half an hour.
The best thing about becoming a millionaire homeowner is that anyone can do it.
Learn How at Homeownership Day Jan 14th, 2017
We’ll teach you the simple process based off David Bach’s “Automatic Millionaire Homeowner” book in an easy, 1/2 hour session at Chapman University from 12:15 – 12:45pm.
This is a class for normal people who would like to do extraordinary things in real estate while maintaining their existing lifestyle, career, and family.
The Automatic Millionaire Homeowner is not a get-rich-quick scheme; everything is done on your individual timeline, and without a membership in some expensive group or school. The only money you spend will be on real estate itself. Simple concepts that once applied, will bring you huge returns regardless of where you own property. And the younger you have this knowledge and you start…the better.
Register below for this free event – space is limited!
More about Homeownership Day / OC Home Fair
This yearly event is a collaborative between Chapman University, Orange County Young Professionals Network, OC Register, and non-profits VAREP and NeighborWorks OC designed to bring you honest real estate information with no pressure or gimmicks.
There will be 4 different sessions, each with 5 classes to choose from. Attendees enjoy a ‘choose your own adventure’ style and pick the classes that interest them most. Instructors are all active experts in the industry volunteering their time to benefit our community. Visit www.OCHomeFair.com for the full class list and session times.
Where: Chapman University’s Beckman Hall 1 University Dr, Orange, CA 92866
When: January 14th, 2017 from 10am – 1pm
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It’s common knowledge that you’ll get the most for a property when it’s upgraded, staged, and correctly marketed. But for some Orange County home sellers, this isn’t an option. Sometimes there was a problem insurance didn’t cover, sometimes the property was inherited and needs 40 years of updates, or other times there is a divorce or a death that requires a fast move. Whatever your case may be, there are buyers out there who want to exchange your ‘problem child’ for quick cash.
This week, we interviewed one of our investors to learn a little more about the types of property she targets. She told me “Angie, we buy other people’s problems.” Here’s a deeper look into those problem homes and how an investor or all-cash buyer may be your solution to avoid headaches.
Southern California Hoarder Homes
If you’ve got a hoarder home on your hands, definitely consider your time and cost to clean it out. The process can take weeks, even months, especially if you have an emotional connection to any of the items inside. On top of that… under all the clutter is probably some deferred maintenance waiting as well. Rather than going to market with today’s buyers who all like everything clean and new, it may be best to strike a deal with an investor who will take the home as-is.
The Family Property
You’ve had Thanksgiving & plenty of holiday parties here, and over the years your parents haven’t had any garage sales, and they have kept every memory packed away in the attic and 4+ bedrooms. Now it’s time to move them to a condo or assisted living facility, but what to do with all this STUFF?
It’s not a problem for an investor. She says:
“…We purchased a property earlier this year. It was from an agent who had a client that she knew the whole family, and the mom had to go into a home. The kids did not want to deal with all of the stuff in the house, they just came and took family photos and a few things. We bought it as she left it – full of her things. We donated belongings to charity and then proceeded with the work.
As a matter of fact, the last several we have bought have been similar situations – that the agent knew the family and they just wanted a quick cash sale. It made it easy for both sides to sell before the house ever hit the MLS.”
The Money Pit
Ever tried to be an investor and failed? Ran out of money, time, or resources before the flip was done? It happens, more than you may realize. Especially with all the flipping shows out there right now! If you’re ready to throw in the towel on problems with the city, or a red tagged, unfinished construction, you’ll probably NEED to find a cash buyer or investor. Lenders won’t typically loan on partially completed construction.
The Get Me Out NOW Divorce
Sometimes, you just want out. You have other things on your mind. You don’t want to deal with a buyer whining about repairs, or people traipsing through your home when you’re trying to pack up and move out. And you definitely don’t want to sit with your future in limbo waiting for the lender who promises the world… but delays at every corner. Nasty divorces are a perfect fit for a cash sale; we’ve all got a story on that one. Sometimes it’s best to cut your losses and move forward on a new path. Like now.
The Residential Zoo
Ever walked into a home with too many animals? Barf. Ever try to sell a home with pet smells? Good luck! Homes that had a lot of animals living in them, that were not taken care of, can require a lot of time and attention to air out. Plus, you’ve got the unfortunate situations that have feces inches deep on every surface including walls…damage to doors and baseboards from scratching… definitely a candidate for the investor buyer.
The scenarios are endless, but for every home there is a buyer. It just may not be the traditional kind. If you’ve got a challenge on your hands, give the AskAngie team a call at 949-338-7408 or fill out the form below to schedule a consultation on the best way for you to sell without headaches.
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Wondering if you should add solar when you buy your home? It’s one of our most common questions, so let’s check into it! Today, we attended a solar seminar with Alan Issacs & GoSolar from our LeTip group to find out more on this popular subject.
The average monthly cost of electricity for a CA resident is $183/mo, or $2200/yr. On top of that, it’s constantly increasing, on an average of 5% per year. So if you think your bills are big now…just wait…
How does Solar work?
Solar panels convert sunlight into the same electric energy you get from the utility company. Materials consist of solar panels installed on your roof, and inverters. In many cases, you’ll still be connected to the grid, so you will have access to electricity if your panels don’t generate enough, and you will get a credit for the excess energy you generate – win win so far!
Solar Installation & Purchasing Tips:
- Size your system to produce 80% of the energy you need, not 100%. You can always add panels later if you want to, as long as you are using a micro inverter instead of a string inverter.
- If you buy solar (not lease) before Dec 31st 2021, you’ll receive a 30% federal tax credit
- Just like homeownership, the really big savings comes over the long term; check out this 20 year projection graph:
Interested in Going Green Now? Steps to Go Solar:
- Solar Energy Consultation
- Solar Site Assessment
- HOA Approval (remember many HOA’s only meet once a month, and many times they require neighbor approval – plan in advance!)
- City Permit – the company you select for solar will usually pull this for you
- Installation – these work on EVERY type of roof, and typically takes 3 days
- Net Energy Metering (NEM) agreement
- Permission to Operate (PTO)
The entire process takes about 4-8 weeks, depending on weather, how many panels you have, and various other factors.
How Should I Pay For Solar?
It’s all about options – and there’s plenty. Some are by far better than others. Let’s explore them further:
- Upfront – typically pays back within 5 years and offers a 30% tax credit
- Consumer Energy Efficiency loan – also eligible for tax credit. This is also tied to you the owner, which will save headaches when you go to sell your Orange County home.
- HELOC – you can use your current home equity to purchase by taking out a Home Equity Line of Credit
- HERO / PACE loan – a secured loan where your credit is not even checked. Be careful of these options, it can scare buyers if you go to sell your home. If you KNOW you’re going to stay in your property until it’s paid off, then go for it. The interest rate is usually 8%; so it may be better for you to take out a HELOC if you have equity.
- Lease / Power Purchase agreement – the worst option for payment, because you are not eligible for tax credit, it’s typically a TWENTY year agreement, and your lease payments typically increase annually (around 3%). This option can also make it difficult for you to sell your home.
If you’d like more info on Solar, feel free to reach out to 949-338-7408 or tweet @AngieWeeks, and we’d be happy to connect you with multiple people we know in the Solar industry!Read Full Post | Make a Comment ( None so far )
Got investment property?
It’s surprising how many property investors we meet who aren’t familiar with 1031 Exchange. Since money doesn’t grow on trees, maybe we can save you some when you decide to sell – read on!
Recently Debbie Bannister with Exchange Resources spoke to our Real Estate Focus group with some 1031 Exchange tips. If you are wondering whether your property fits the mold for a 1031, here are some qualifying terms:
- Must be an investment property, not a primary residence
- Property you are exchanging for must be equal or greater value than net sales price
- Exchange must be done by a qualified intermediary
What kind of properties can be included in a 1031 Exchange?
The properties must be ‘like kind’. Like kind is defined as any real property held for the productive use in a trade or business for investment purposes. Land can also qualify. 1031 properties cannot be for your personal use, but you can put your business in one, per the definition above :). Many investors also ask if the debt on the property counts toward the exchange. The answer is Yes, loan debt is included. If you don’t want to take on new debt, however, you have the option to pay cash as the down payment on your move up property. And if the property you’re purchasing needs work, you can also do an “improvement exchange”. Lots of options!
1031 Exchange Timelines
45 days after the close of your investment property, you must identify a property to buy that is of equal or greater value. If you can’t buy one of the properties you identify for the 1031 exchange, then your exchange is off even if you buy some other property; therefore this is a crucial step. You can identify up to 3 properties, so make sure not to put all your eggs in just one basket. Strategy: identify your favorite on the first day, then wait till day 40-45 to identify your backup options.
180 days to buy, close, and be completely done.
Cashing out funds with a 1031 Exchange
In some situations you may not want loan debt, so a partial exchange is an option. Or maybe you want cash. This is also an option, but talk to your CPA about how much cash you should keep because you will be taxed on it.
Tax intelligent ways to get completely OUT of your real estate investments
Bruce Jones our tax strategist talked to this extent, and you’ve got some options:
- Charitable property
- Deferred sales trust (don’t do it – none of our experts recommend this!)
- Structured sale
- Traditional installment sale (aka seller carry back)
Remember the IRS is not your enemy, lack of knowledge is.
Bruce suggested to consider coupling a monetized loan with an installment sale. You still get a tax free chunk of change at close of escrow, and you can defer your taxes for 30 years. It’s kinda complicated, so here’s a pic to help!
In case you’re on a mobile & it’s hard to see what’s in the graphic above, here’s the breakdown:
You’ll do a interest only 30 year installment sale:
Seller –(installment sale)–> Dealer –(resale on original terms)—> Final buyer
then, with a Separate investment business loan:
Lender –(loan typically 95% of net sale proceeds)–> Seller –(invests)–> $$$
followed by the Lender’s payment processing and loan guarantee system:
Dealer –(automatic installment payments)–> Payment Processor –(single source limited recourse loan–> Lender
Bruce showed us example after example of SoCal & Orange County property investors he has helped to save hundreds of thousands of dollars. Some even millions, so it’s worth a consultation with him if you decide to cash out all or even some of your real estate portfolio. After all, property investments aren’t all about how much you ‘make’, they are really about how much you get to keep. He’s been utilizing this strategy for almost 20 years and never ran into a problem 🙂
If you’d like a personal introduction to any of our tax experts, Real Estate Focus group consultants, or a list of investment opportunities, just fill out the form below or call / text Angie at 949-338-7408, & we’d be happy to assist!
We’ve all heard good and bad about the reverse mortgage market, so today I went to a class given by Dirk Pierce with Retirement Funding Solutions at the OC Register building to find out more information. Knowledge is power, right?! Plus it’s not fair to form an opinion about something until the proper research and due diligence is done.
What is a Reverse Mortgage?
Basically, a reverse mortgage lets homeowners convert a portion of the equity in their homes into cash, and eliminate their monthly mortgage payments.
Interestingly enough, Reverse Mortgages are over 100 years old, and they are also available in Britain, Chile, Canada, New Zealand, Australia, and Korea. They were designed to help people who where house rich and cash poor, and were also known as ‘shared equity’. Fast forward to 1989, and Ronald Reagan helped to create the first government regulated Reverse Mortgage plans under the FHA umbrella.
Another variation of a reverse mortgage is HECM for Purchase; both share similiar features:
- Both are FHA
- Neither have monthly payment requirements
- Both offer adjustable or fixed rates
You’ll use HECM for purchase when you are planning to buy a new property, for example to downsize, etc. Reverse Mortgage is when you stay in your existing home, and simply refinance.
HECM for purchase is an FHA loan that enables a person age 62+ to purchase a home with as little as 40% to 51% down and never make monthly mortgage payments. So basically you can get a 500K home for 250K and never make payments if you meet the age requirements. BUT….interest still accrues on your mortgage balance. The nice thing about the programs is they come with the following protections:
- Guarantee that FHA will honor the terms of the loan if the lender becomes insolvent
- Guarantee that you would never owe more than the house was worth
- Guarantee that there is no personal liability for repayment of the loan by you or your heirs. It is truly a non-recourse loan.
- Guarantees that the loan won’t become due until the last remaining borrower leaves the home.
Frequently there is remaining equity in the home…what happens with that? After the home is sold, any remaining equity goes to the heirs.
Do you qualify for a reverse mortgage?
- minimal credit requirements
- minimal debt to income ratios
What types of properties are allowed?
- single family
- 1-4 unit property
- FHA approved condo
- new construction
- NOT second homes or investment properties, sorry!
More reverse mortgage facts:
- Only YOUR name is on the title, so don’t believe the rumors that the bank is on title.
- The loan becomes due when the last remaining borrower leaves the home.
- You can sell whenever you want to, and they do not have a prepayment penalty.
- Family has up to a year to either refinance your property with a normal mortgage or sell it before the loan is officially due.
Reverse Mortgages are all age based, so contact Dirk today if you’d like a chart to see what your down payment would be at your age. Want to learn more? Register for his class at http://www.OCHomeFair.com on Jan 30th, 2016.Read Full Post | Make a Comment ( None so far )
Today I had the pleasure of meeting Leslie Appleton Young with California Association of Realtors, and hearing a ton of facts and figures about where real estate stands in the state of California. Wow have we come a long way since 2007! Congrats to all of you who held on to your property!!
As of 2015, the housing market has officially recovered, and we’re rolling along at a steady pace. Over 94% of homes were equity sales this year 🙂 Median price is $482,150. Jobs look good; OC is actually #3 on the list up 3.2%, and construction is #2 on the industry list. All great news for housing. But the big question is…
What About Interest Rates????????
Leslie doesn’t really believe rates are going to jump the way other forecasters do. Well that’s good news…if she’s right 🙂 She said there may be an increase next year, but it happens, she’s not expecting rates to go up until March 2016…so you’ve got a little time to get going! (But please note the best time to buy in OC is always Oct-Jan)
Market Stats & Demographics
We are below average with first time buyers in the market right now, less than 30%. On the other hand, over 30% of properties sold this year went to all cash investors. 75% of boomers are homeowners. 20% of millennials are homeowners. The good news is that 43% of all boomers worry about their children’s down payment… and are willing to help their millennial offspring with gift funds. International buyers are actually down to 4% this year, they were at 8% in 2013. 45% of Millennials have NO IDEA if they could qualify for a loan or not. What?! Need to check on that kiddos! 🙂
If you’d like all of CAR’s facts, figures, and 2016 economic forecast click here.
Why aren’t people buying homes?
- Foreclosure pipeline is dry
- Trouble qualifying for a loan
- They’re happy where they are (average time between homes right now is 10 years)
Regardless of what the facts & figures say, home prices are on the rise right now and many people are getting priced out of the market. Don’t let this happen to you – TAKE ADVANTAGE of interest rates and consider picking up an investment or upsizing to build a strong portfolio and long term wealth! Tweet Angie today @angieweeks or text or call 949-338-7408.Read Full Post | Make a Comment ( None so far )
We’re working with an experienced developer of over 30 years on multiple projects. He’s originally from the east coast, and is expanding his successful ideas west. He’s seeking investors here, and asked us to reach out to our sphere! You can meet him in person to ask questions & find our more details on Oct 20th, 2015, 1-2pm at our office in Corona del Mar.
If you’d like to partner on investment property, read on for specifics.. maybe this equity partner opportunity is for you.
Preliminary Equity Partner Participation:
- Separate LLC’s will be formed to procure entitlements;
- This entitlement process will be undertaken by our developer who has completed over 20 similar projects. Expected turnaround is 3 – 9 months depending on local circumstances and planning requirements. Note: We have independent specialist contractors lined up to perform these services and obtain final approvals.
- Equity Partners will receive an Annual Return of 18 % secured by a promissory note.
- Equity Partners will be repaid in full at construction loan take-down
- Final Project Equity Entitlements (Equity Kicker) will be 5%
- Types of Projects which we are developing are:
- senior independent living
- senior assisted living
- memory care and congregate housing; each project managed by experienced successful licensed care provider to run the operations. See Items 8-10.
- Locations: Central to Southern California; we have pre-selected two locations: San Clemente and Mission Hills (Palm Dessert); with a potential #3 is in Santa Barbara.
- Project size: 150- 300 revenue Units
- Costs to build and furnish (excluding land) 25-30 million;
When turn-keyed and 70% occupied value multiplier is estimated to be 1.2 : For example: when our project million completed and occupied at 30,000,000 = 30m X 1.2 yields project value of $ 36 m to be purchased by REIT/ or other cash buyers within 1 year or less. (Some projects may be held longer if investors choose)
- Three Money Sources will underwrite these loan guarantee programs after equity partnerships are formed.
- Project’s ROI: 20- 25 % annually
- All projects are Green (electricity, materials, smart utilities) and create up to 30% Investment tax credits and sheltered ongoing income which a portion will be available to the equity investors.
- Each project’s care operations will be contracted to a premier California Licensed Care Provider (LCP)
- Our private company, Banyan Care Group Inc (as the 20% GP with our 80% Limited Partners) will develop & provide the AAA facility for the LCP to run.
- The LCP contractually will provide resident management & services, controlled operating costs, and guaranteed revenues.
New to the market in the heart of Anaheim Hills is a beautiful townhouse in the Summit Park community. Anaheim Hills is located just south of Yorba Linda, California, opposite the 91 freeway at Imperial Highway.
Priced BELOW recent comps at $399,900, this 1,113 square feet condo includes 2 spacious master bedrooms and a half bath downstairs for guests. With hardwood floors and a fireplace in the living room, it sure makes it cozy. Looking for convenience? A two car direct access garage is also included. Want privacy? You’re also in a very secluded location in the complex, with no one above or below!
The Summit Park community has plenty of amenities. Come take a dip in the pristine community pool or relax in the spa. Also includes a playground for the children and an exercise room!
Summit Park is close to shopping, freeways, and plenty of fun things to do on the weekends. Nearby is a nature center where you can hike and have fun. Looking for something different and interesting to do? Try sleeping outside in an amphitheater under the stars! And don’t forget to check out all the fabulous places to eat at Savvi Ranch!
Don’t miss out on this great townhouse, it’s going to sell fast! Come to the open house this Saturday May 23rd. Please email or give us a call with any questions or to set up a private showing. 877-230-3211; email@example.com. Look forward to seeing you this Saturday!!Read Full Post | Make a Comment ( None so far )
Located in the rolling foothills of northern San Diego County is San Marcos. Miles of trails in the local hills, unique dining and shopping opportunities in its retail centers, San Marcos has all the ingredients that make life enjoyable. Fifty-six miles of existing trails are great for hiking, biking, running, equestrian use and more! A popular destination is the top of Double Peak Park, which features a panorama of northern San Diego County from the highest coastal peak in the county. The Old California Restaurant largest dining and entertainment experience with eighteen restaurants. Only 12 miles to the Pacific Ocean and 30 miles away from beautiful San Diego.
If this sounds like somewhere you’d like to live or have investments, you are in luck! There are two homes now available that have yet to hit the MLS.
617 Richland, San Marcos CA
The first one is a 3 bed 2 bath; 2,183 sq ft that sits on a 11,878 sq ft lot, great corner lot with a circle drive priced at $499,000!
619 Richland, San Marcos CA
The second home is actually right next door, the adjoining lots give huge investment potential! This 2 bed, 2 bath has 1,200 sq ft. and is listed at $370,000.
Open House July 11th 2015 from 1-4pm
Both properties have recently been renovated inside and are scheduled to hit the MLS next week. Beat the rush and join us at the PRE-MLS open house this weekend on July 11th from 1-4pm.
Can’t make the open house? These great properties are still available for pre MLS showings by appointment only. Seller will consider an offer on one or both! If you would like more details on ideal San Marcos property opportunities email SuccessInWeeks@gmail.com or call or text 949-338-7408.Read Full Post | Make a Comment ( None so far )
Gorgeous Newport Beach, CA – an ideal retirement and vacation spot for so many. Balboa Peninsula is seeing lots of changes this year – a new marina going in, lots of new restaurants and shops, multiple properties adding 2nd and 3rd stories – the area is truly in a ‘build up’ phase similiar to what we saw with Huntington Beach 10-15 years ago.For many, the “Newport” lifestyle is far out of reach. Currently there is only ONE lonely condo on Balboa Peninsula under 1 million dollars, and it’s HOA is almost $800/mo – OUCH! Is there anything affordable? Are there any opportunities? There sure are. Lots of times with the higher end areas, buyers will opt for a multi-unit property as a stepping stone to get up to their McMansion. They live in one unit, and rent out the other(s) so that the mortgage becomes affordable. Many property owners keep the multi-unit forever, because rental rates on the peninsula can be insane. Newport Beach vacation rents range from $150-1000 per NIGHT, so you can see the potential a second unit could have on your mortgage payment! If you don’t like the vacation rental crowd, you can still rent on a 6 month or 1 year lease for a minimum of $2000/mo, even if the unit is the size of a closet without a garage or parking. Ya, Newport Beach CA is that expensive and exclusive.
Here are the 3 best property duplex deals on Balboa Peninsula right now:
2 BR/1 BATH Lower unit
2 BR/1 BATH upper unit
1,900 sq ft
2,666 lot size
Situated in the bustling area of the peninsula, this duplex is walking distance to shops, beach, harbor, nightlife, and a ton of restaurants. It is only one block to the sand.
2 BR/1 BATH Front unit
2 BR/1 BATH Rear unit
2,119 sq ft
2,178 lot size
Harding is a quiet, interior peninsula street (rare!) walking distance to the Balboa Ferry, Fun Zone, harbor, beach, shops, bars, Sunday Classic Car show, Catalina Flyer and Balboa Pier. Such an ideal location. A tear down recently sold a couple doors down for about the same price.. so this property also offers big opportunity.
2 BR/2 BATH unit
3 BR/3 BATH unit
2118 sq ft
2563 lot size
The only available peninsula duplex that offers units with more than 1 bath, this cottage style property is on the ocean side of Balboa Blvd with bigger units than the first two options. It’s the closest listing to the new marina under development, and it’s still close to the Newport Pier, harbor, shops, restaurants and nightlife.
Balboa’s Best Deals
If you’re interested in more properties in Newport Beach, or Balboa Island’s best deals, just give us a call toll free at 877-230-3211, or tweet @AngieWeeks or @AskAngieTeam with your questions so we can get details. You can also register your own property search through our website at: http://properties.askangie.comRead Full Post | Make a Comment ( None so far )
Appraisers…..we love to hate them. They scrutinize your house, call your ‘baby’ ugly, and they tell you it isn’t worth as much as you would like. But they are a critical part of every real estate transaction when you’re getting a loan, so we have to learn to speak appraisal language. What does an appraiser do, anyway? In a nutshell, appraisers determine an unbiased price your property is worth at any particular moment in time. They do this by pulling ‘comps‘ or comparable properties near you, and then factoring in upgrades and features to nail down a property price. The bank hires an appraiser to confirm the loan they are about to give you is on a safe, solid, properly priced property. This week we had the pleasure of hearing long time Laguna Beach appraiser Mary “Vicky” Wilson tell us how we can get closer to the right numbers. As an agent in the business 11 years, some of this info was totally new to me! I’m sure you’ll learn a few things too – so read on 🙂
First off, appraisers take a completely factual and non-emotional approach. So to get on the same page with them…you’ve gotta use your head, not your heart. Every price adjustment and comparable property needs to be validated with a series of facts behind it, not just thoughts or feelings.
Basic guidelines Orange County Real Estate appraisers follow:
- **Appraisers do NOT NOT NOT use a price per square foot average.** Don’t even try to value your property like this. You may be able to justify it to the buyers agent, buyer, and yourself, but the appraiser isn’t buying it, and they give the bank the green light needed to lend the money needed & close this deal. Now, lots and land are an exception to this rule, but the main dwelling is NOT.
- Comps must be reasonable substitutes. ie single level properties vs 2 story properties are NOT comparable. Read that again because it takes a minute to sink in. SERIOUSLY?? The 2 story that is 3 doors down is not a comp if you’re a single story??? Notsomuch in the eyes of the appraiser. Be careful not to price a less desirable model in a neighborhood the same as the most desirable if they differ in stories.
- To follow along these lines, lenders don’t want an appraiser to compare properties that are 15% plus or minus in size. If you are the smallest model, you may not be a comp with the largest, and vice versa.
- Lenders require 4 closed sales AND 2 backup or pending sales that support the value opinion & your price tag. Pay attention to active, pending, & backup listings because the appraiser is! They are looking for upward or downward trends in your local market. One high closing in your area won’t help you, remember FOUR closed properties are needed, plus 2 more that are under contract.
- Did you know there are only 17-20 line items on an appraisal? Appraisers stick to the cold, hard facts.
- L O C A T I O N is the #1 consideration. Location also trumps distance from property. So if you are the only ‘ocean view’ in your community, an appraiser may go to a neighboring community to pull other ocean view comps instead of other non-view properties in your same neighborhood. Same would go for a ‘corner lot’ or ‘end unit’ location.
- Time is of the essence. Appraisers like 3-6 month old closed comps, not more than 1 mile away. Pull up this data before you price your property so you are in line with the realities of today’s market.
- No, your converted detached garage, pool house, or Mother In-Law suite is not part of the square footage of your property. Ever. Rule of thumb: If you have to walk outside the main structure and have air or water or wind touch you then it’s not part of the square footage 😦 Furthermore, to be considered square footage, permitted improvements must be above soil grade & under the main roof. Sorry, but your cool casitas or underground grow and wine rooms can be appraisal line item adjustments, but NOT included in the square footage.
- .75 bath (toilet, sink, shower) is counted as a full bath in appraisals!!!! .5 baths with no tub or shower, on the other hand, are only noted as .1….so if your property is 5 full and 3 1/2 baths… it’s a 5.3 on the appraisal; not 6.5.
- Appraisers only have 48 hours to send their appraisals in, and they get paid less than $500 per report. Banks have high expectations and short timelines, so this is where a good agent comes in to assist your appraiser in understanding your home’s true value, quickstyle. More agent tips coming if you keep on reading….
- The market will *usually* pay back 50-60% of what you spent on upgrades!!! Sellers who try to add the entire price of remodels or upgrades into a purchase price always end up disappointed. Remember this ratio and come to terms with it now.
- If you do have an unpermitted addition, appraisers will ask: Does it have intrinsic value to the property? Is the addition positive or negative to the overall home? How is the condition? Remember, non-permitted additions won’t count toward square footage, ever, but it can be added as a line item to the overall valuation.
Tips for Realtors and homeowners to better work with appraisers:
- Be present at the appraisal appointment with a comp packet. Or email it early. The appraiser is in the field NOW, not in 3 hours when you get back to the office and your email. Don’t expect appraisers to drive back to see your comps. Make sure to support upward and downward trends with comps and a possible market report, too.
- Inform – appraisers need to know what was upgraded and how much was spent. Readily offer full access to everything.
- Don’t approach an appraiser negatively or with an attitude if you don’t agree with their valuation.
- Don’t say: “You should have no problems with the value”. Famous last words.
- During follow up: don’t ask the value, they can NOT tell you the number directly. Instead ask: “Did you find any problems with the home that may be an issue?”
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Contact the AskAngie team and we’re happy to help! You can reach Angie direct at 949-338-7408. Or just email Angie@AskAngie.com or tweet @AskAngieTeam so we can help you get the research you need to sell your biggest asset for top dollar!Read Full Post | Make a Comment ( None so far )
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