Home sales nationwide are moving in a downward trend.  Defining trends some markets are increasing.  One notable market is Austin, Texas.  Currently home sales reflected in March showed in increase of 1.86% in the average home sales price.  This figure is based on a study by First American Loan Performance.  Also stemming from the study the average homes sold also increased price by 2.13%.

With this in mind Austin appraisals are also anticipated to increase in 2008.  According to Patrick Brown the chief county appraiser the average home value is up 11 1/2 percent.  This was mentioned in an interview with the Austin Statesman recently, where he clarified that these are broad averages and although homes have increased it is possible some have decreased in value as well.  Mr. Brown says to watch for your appraisal to come in the mail.  In the same interview Mr. Brown did say that Austin home sales have a whole but the home values themselves continue to rise.  This makes Austin a great market for homeownership.

While homeownership remains the American dream, Austin remains a place to focus that dream.  With the beauty of Texas as its backdrop, as well as the diversity a college brings, Austin and the Austin Metro area are fantastic housing markets.  Should you be looking to relocate or simply expand your home in the Austin market we would be happy to help you find the best home fit for your needs.  Finding a home in the great city of Austin is our specialty.

Why a Real Estate Appraisal?

There are many reasons why you need a real estate appraisal.
Reduce property taxes, probate, estate planning, divorce settlements are some.
The most common one is to obtain a mortgage.
Most lenders are required by federal and state laws and current banking regulations to obtain an appraisal for most loans secured by real estate.
As of Jan. 1, 1993, all appraisals made for mortgage loans from federally insured lenders and other federally related transactions must be made by a licensed or certified appraiser.

What is a Appraisal?

An appraisal is an objective supported opinion of value of an adequately described piece of property made by an appraiser who has sufficient knowledge, training and experience to accurately estimate its value.
In this detailed and time consuming report, appraisers use comparable sales together with information about the property being appraised, its neighborhood and community along with the local and national economy, to support the appraised value.
Look Objectively not Subjectively.
The most important thing you can do when previewing is to look at the house as if empty: four walls, floors and a roof.
Don’t let the current owners’ furniture and decor influence you.
Important Tip!
If you are buying a house with the owner carrying the paper (loan), it is well worth the cost to hire an appraiser to make sure you don’t pay more than it is worth.
For your protection many real estate agents will write in a purchase contract: this contract is contingent upon the property appraising for the sales price.

How is Value Established?

The value of a house is based upon recent sales of the similar neighboring homes in the market as well as rentals and listing data.
Ideally, appraisers want to use sales of properties of the same size, age, room count, condition and with similar amenities and external influences. This rarely happens though, so adjustments have to be made, based on what people will pay extra for.
Examples: extra square footage, bedrooms, fireplace, upgrading, parking facilities, swimming pool, lot size, location and so on. To help get a better picture, this information is entered on a form, a value for differences is established and comparisons are made to the subject property.
A minimum of three verified closed sales with photos are required to establish a value.
Houses Appraise for More When:
- Well maintained inside and out.
- Located in a good school district.
- Additions are done with the proper building permits.
- Additions conform with and fit well into the existing house.
- Properties throughout the neighborhood are well maintained.
- Not over improved or the largest house on the block.
- Style of the house conforms with those in the neighborhood.
- Zoning changes are not expected or there is not a mixed use.
Remember: Location, location, location.
You can change everything about a house except it’s location.

What is Poor Location?

- Located on a feeder street.
- Under an airport flight path.
- In or near a gang territory.
- Center of night life activities.
- In a rundown block or neighborhood.
- Next to a school or school yard playground.
- Next to apartments or commercial property.
- In close proximity to a freeway, expressway or railroad.
- Next to a gas station, near a municipal garbage or toxic waste dump.
- Odors from factories, farms and processing plants are routinely noticed.
- The city is affected by the closing of a major employer.
Think about Selling - When You are Buying.
Location is a big factor in a home’s appraised value. This is most notably felt at the time you sell or refinance. What seems like a bargain when you buy might turn into a real headache when you try to sell.
Drive around the neighborhood and note any adverse conditions.
You may think you can live with something adverse for the price, but when it’s time to sell you might find buyers won’t.
Important Tip!
Adding onto your house = Always obtain a building permit.
A 600 square foot addition built without a permit is given no value on an appraisal. When it is time to sell or refinance, the frustrations of the building permit process will be worth it.
Always save copies of the final permit sign offs and keep with your house papers.
Buying a House with an Addition?
Verify that it was built with a permit prior to closing the sale.
Don’t just accept the sellers word. Get copies of the permits before final sign off.
Should you want to refinance or sell at a later date, and the appraiser cannot verify the addition being permitted, no value should be given.
The result: no new loan or worse . . . no sale.
Tip!
A one bedroom house or condominium doesn’t appreciate as well and is harder to sell.
Work with An Agent
An advantage of working with a real estate agent is that they can provide you with sales information of similar properties to better guide you on how much to offer.
Your agent can provide recent sales “comps” for similar homes in the neighborhood.
Finding the list prices is also important. Comparing the list prices with the sale prices tells you exactly what percentage of the list price sellers are getting.

Author: Shane Harder

Real estate appraisal is the process of developing an opinion of the dollar value on a piece of real estate property. The overall goal is to develop the true and real market value of the property in question. The need for an appraisal agent arises because of its high profile investment class. No two properties are identical, and all properties differ from each other in their location. This is why appraisal in a property must consider an abundance of factors.

A real estate appraisal is performed by a licensed or certified appraiser. Many qualified and reliable appraisals attempt to acquire the true market value of the property. It is important to know the difference between market value and price. A price paid for a property may or may not represent that property’s market value. Special arrangements may have been made, such as a relationship between the buyer and the seller. It is the task of the real estate appraiser to judge whether a specific price obtained under a specific transaction is accurate of the market value.

Let’s take a moment to definition the value used in an appraisal analysis. Selecting comparable data for use in the analysis is critical for establishing fair market value. The most commonly used method is the “sales comparison” approach. This approach examines the price or price per square foot of similar properties being sold in the area. In other words, the sales of properties similar the property in question will be noted. The sale price is then adjusted to show the differences in the comparables. You’ll find this approach is generally considered the most reliable method of appraisal.

Purchasing a home, land, or commercial property is the single largest investment that you will make in your lifetime. There is a lot of people involved in your transaction including Real Estate agents, banks and lawyers. Combine that with changing property values, market trends and new laws. Real Estate appraisers can make sure you get a fair deal. When you hire an appraiser, you’re hiring a professional you can trust.

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