Cape Appraisals Blog

We are rapidly approaching summer in Southwest Florida!  Along with summer, comes our local hurricane season.  As you prepare your home and family by creating disaster plans, keep in mind that in the middle of hurricane season, our local property appraiser sends out proposed "TRIM" notices.  It is predicted that these notices will create a "STORM" of conrtoversy. These notices will show the county's property appraiser's estimated value of your home.  Please take the time to review this notice carefully.  Should you believe your property is overvalued, you may be in a position to contest this value and lower your tax liability.

However, you must keep in mind that you must prove the property appraiser's assessed value is incorrect.  This burden of proof rests on you!  If you are unable to provide evidence to the property appraiser's office, your request to lower your assessed value will be denied! 

As the appeal process is fairly simple, there are several strict guidelines and deadlines that the homeowner must follow to be successful. The Appraisers at Cape Appraisals receive specialized training in consulting homeowners regarding petitioning to lower their assessed value.  Please contact Jim Kreider at (239) 458-2463 or Toll Free at 1(877) 221-4254 or email Jim@capeappraisalsfl.com.  No matter what county your property is located in, Jim will be able to guide you through the process and ensure you do not miss important deadlines! 

The next series of posts to my blog will address commmon requests or inquiries that our company receives.  I am addressing these issues as our phone rings more often now with requests that we are not able to "just do" as the client wishes.  Please keep in mind that Real Estate Appraising is a regulated industry.  Therefore, we must comply with certain rules and regulations that our clients do not have to. 

If you have any specific questions that you would like to ask about the appraisal process, our qualifications, or guidelines/rules/regulations/laws that we must adhere to, please email your question to Jim@capeappraisalsfl.com. 

Last week I received a phone call similar to this USPAP question:

The popularity of web sites that give "estimates" of value for homes is increasing.  As many people research the prospect of purchasing or refinancing, they are turning to alternatives to "save money" in the decision making process. 

Often, Cape Apppraisals receives calls from homeowners or buyers wanting to know if the estimate they received from a web site is accurate.  Our first response is to explain to the individual that these "estimates" are not appraisals.  Only qualified professionals can complete appraisals. 

Cape Appraisals has tested several different online valuation sites and found that the "estimates" provided by these sites have differed from the appraised value of a home by as much as 50%.  It appears that by removing the "live person" (the Appraiser) from the valuation process reduces the accuracy of the valuation process.  This is due to most valuation sites only considering one source of information when generating a value for a property.  Most of these sites subscribe to information provided by local public records. 

The reason an Appraiser can give a more accurate value is that Appraisers are actively involved in the market where the property is located and able to apply their experience and knowledge to the property being appraised.  One of the most valuable sources of information an Appraiser can apply to valuating a property is conversations with local Real Estate Professionals, Buyers, and Sellers.  As Buyers and Sellers drive the market, the information provided by them is most important. 

When making one of the most important financial decisions of your life, be sure that it is a sound one by consulting a professional with knowledge of the local market.  Rest assured that the Appraisers at Cape Appraisals are very active in the Southwest Florida Real Estate market and will always be able to provide you with the highest quality and most accurate value.

For mor information and to find out what type of appraisal best suits your situation, please call Cape Appraisals at (239) 458-2463

When Is The Right Time To Buy?

Timing the market is very difficult when we do not have all of the facts.  The next series of blogs from Cape Appraisals will focus on delivering the facts to consumers.  We are in hopes that these facts will assist you in your buying making decision.  If you would like to receive statistics on certain neighborhoods or market areas, please email Jim Kreider at Jim@capeappraisalsfl.com.  Of course you should thoroughly research the history and the trends of the immediate neighborhood of any home you are contemplating purchasing.  Cape Appraisals offers a wide variety of services from desktop appraisals to full FNMA appraisals.  Call (239) 458-2463 for more info on which type of appraisal best suits your needs.

The first market area we will take a look at is Cape Coral.  Cape Coral has seen an increase in sales over the first three months of this year:

January 2008:        149 Single Family Residential Sold

February 2008:       204 Single Family Residential Sold

March 2008:           260 Single Family Residential Sold

Total 1st Qtr 2008:        613 Single Family Residential Sold

This is a 12.6% increase in the total number of single family residential homes sold in Cape Coral compared to the first quarter of 2007 (536 Single Family Residential Sold).  Although, supply still outweighs demand (5,133 Single Family Residential currently listed for sale in MLS), as the number of sales increase, the predominant value of single family homes will also change.  However, with a high number of available inventory, flipping properties in Cape Coral is not a very realistic proposition.  But if you are considering purchasing the home you would like to live in or a home that may generate long term income, it appears that now is the time to do so. 

As with any other major purchase in your life, DO YOUR HOMEWORK!  Please take the time to research the history of the property you are considering buying and familiarize yourself with the trends of the property's neighborhood. 

©2008, Cape Appraisals

When are we going to see the bottom?

One of the most common questions homeowners, clients, buyers, and sellers all ask us is when is the Southwest Florida Market going to bottom out?

The most logical answer that we can give them is that we will know when it has bottomed out about 30-90 days after it has happened.  As objective observers in the Real Estate transaction, Appraisers must make all their determinations based on fact, not speculation.  Therefore, the only way we can answer a question like that is to research evidence of past events. 

To determine whether a market area's values are increasing, decreasing, or stabilized, we research the neighborhood's predominant value (most common sale price).  You must keep in mind that the simple definition of value is what the typical buyer is willing to pay for that particular item.  Therefore, the numbers used to determine the predominant values come from "closed" transactions, not active listings.  Although, we always review active listings to determine the volatility of a neighborhood.

Rest assured that we do refresh our research with EVERY assignment.  What that means to you is that when we appraise yours or your client's home, we will be including the most recent available and verifiable data from the neighborhood. 

Good News!

Cape Appraisals has always had a large coverage area, appraising all of Southwest Florida, from as far south as Everglades City, as far north as Sarasota, to as far east as Okeechobee!  By having such a large coverage area, we have seen the different characteristics of several well defined market areas.  Recently our research has revealed that some of our local markets have seen a stabilization of predominant values.

If you would like to know if your home is located in a neighborhood of stabilizing values, please email your property address to Jim@capeappraisalsfl.com. Jim will reply with a report of high, low, and predominant values from your property's neighborhood.  Please specify whether you are looking for Single Family, Condominium, or Residential Income values.  *The research provided will not be considered an appraisal of your property and is not to be used to determine the actual appraised value of your home.  Should you need an appraised value for your home, please call (239) 458-2463.

As the media hypes up the condition of Real Estate Markets all over the country, one of the largest concerns of mortgage professionals, homeowner's and borrowers is what to do if they intiate the process to refinance and the appraised value of their home is not enough to proceed. 

The first reaction from those involved in the transaction is that they have "wasted" money for an appraisal they can not use.  However, this is far from true.  Not only was a professional service completed and delivered, but there are alternative uses for the appraisal that can save hundreds, if not thousands of dollars per year for the borrower or homeowner.

• The very first item that should be reviewed is the property's tax assessed value given by the local county property appraiser.  If the appraised value is below the tax assessed value, the homeowner may begin the simple appeal process to lower their annual tax liability.  Our company has experience in this type of appeal and can help make the appeal process stress free for the homeowner.  Mortgage professionals tend to overlook this opportunity to be the good guy and help a homeowner out in a time of need (also an excellent way to gain trust and confidence to obtain more referrals!).
• PMI Removal.  Although the appraised value may not be enough to meet a borrower's current goal, it may be enough to eliminate PMI insurance from an existing mortgage.  This can add up to a huge savings over a short period of time!

If your appraisal comes in below your anticipated value and/or is not high enough to move on with your mortgage transaction, call us right away and discuss what your available options are. 

More and more every day our phone rings with people asking "Can't you just give me an estimate before you do an appraisal?".  The simple answer is NO.  Any opinion of value, whether it be an "estimate", a "pencil search", a "value check", or "comp search" by definition is an APPRAISAL.  Federal and state regulations, along with the Uniform Standards Of Professional Appraisal Practice (USPAP) set forth very strict guidelines and laws that EVERY Appraiser must adhere to.  This includes, but is not limited to, documenting every request for an opinion of value for any property.  Just the task of documenting the request (also called creating a workfile) takes time and effort on the Appraiser's part.  Cape Appraisals has found that the Appraisers and Appraisal Companies that have the time to do this service for free are either under investigation by regulators and law enforcement (this practice gives the perception that the Appraiser is willing to guarantee a target value before accepting the assignment) or they are steadily dropping out of the business!

If you are concerned about paying a fee for a full Appraisal and just want an estimate of value based on comparable sales in the neighborhood, Cape Appraisals offers a simple solution:  Desktop Appraisals!  Our desktop Appraisal complies with all federal and state regulations as well as conforms to all USPAP standards.  This Appraisal is completed without an inspection of the home and considers all relevant information provided by the local MLS, Public Record, and the Client of the subject property. Although the results of a Desktop Appraisal do not guarantee the outcome of a full appraisal (including an inspection of the subject property), it does provide the user with a "ballpark" figure to work with.

Cape Appraisals takes pride in the Integrity and Professionalism displayed by all of our Appraisers.  We are here to provide the highest quality service with the most ethical Appraisers in Southwest Florida!

Cape Appraisals Can Help!

As lenders are becoming more open to renegotiating loan terms to assist homeowners in times of need, Cape Appraisals can assist by offering a very powerful negotiating tool.  Typically lenders are more flexible in helping you keep your property in market areas that have experienced declining values.  If you feel your home may not be worth as much as you paid for it due to a declining Real Estate Market, call our pre foreclosure specialist, Jim Kreider at (239) 458-2463 or email Jim@capeappraisalsfl.com to receive your confidential consultation. 

Jim has six years of experience in the local Real Estate Market.  This experience has aided Jim in developing strong relationships with lenders and banks nationwide.  An appraisal can be a very powerful negotiating tool to take to a lender when you need help.  Lenders take into consideration the difference between the property's current value vs the balance owed on the mortgage.  Often when the current mortgage exceeds the value, the bank is very forgiving and willing to re negotiate to help you keep your property.

Mention this blog and receive $50 off of our full appraisal fee!

One of the most common questions asked of Appraisers by the general public is how did they verify or obtain the data used for the different values reported in the appraisal report.  There are several different sources that appraisers use, however some are very reliable and some are not very reliable at all.  Here's a quick break down of the two different types of sources:

Reliable Sources:

• Public Record:  This is information available to the general public from different public officials such as the Clerk of Courts, the County Property Appraiser, the County Tax Collector, and the local Building & Planning Department.  These are considered reliable as they take into consideration one of the most important tests of "Highest & Best Use", which is "legally permissible". 
• Local Multiple Listing Service (MLS):  This source is full of very valuable information such as competing property listing prices, differences between listing prices and selling prices, price revisions of comparable sales, more in depth descriptions of properties than public record, financing and sales concessions, and how long comparable sales were on the market before they were sold.  With today's technology, the local MLS is very important as the Appraiser can actually view the interior of most comparable sales through digital photographs and virtual tours which can allow the Appraiser to narrow down differences between the comparable sales and the subject property he/she is appraising.
• Local Realtors:  One of the most important sources of information is a Realtor that was actually involved in the transaction.  Although there are certain details the Realtor can not discuss, the information provided can be very valuable to the Appraiser when qualifying a comparable sale in his/her appraisal. 
• Local Builders & Developers:  Local Builders & Developers can give the Appraiser an accurate estimate of how much it costs to build the subject property.  This is very important, as local building costs change very rapidly in most markets.
• Buyers/Sellers:  These may be even the most valuable source of information for the Appraiser to use.  As any experienced person in the Real Estate market can tell you, the Buyers & Sellers DRIVE the market.  That means that they actually determine what a home's "market value" is.  One of the basic principles in appraising via the sales comparison approach is to determine what the typical buyer is willing to pay for a particular property in today's market.  Only discussions with Buyers & Sellers will enable the Appraiser to determine this.
• Closing Agents:  Title Agencies that close transactions can offer the Appraiser "Fresh" data to work with, especially with transactions that might not appear in Public Record.  In our local market, it takes the Clerk of Court sometimes up to 1 month to update sales.

UNRELIABLE Sources:

• Indirect Parties:  Often some inexperienced and "Lazy" Appraisers will rely on information obatined from indirect parties that know that a home sold, but do not have knowledge of the intentions of the Sellers & Buyers.
• Biased Parties:  Although some information provided by persons with a financial interest in the Appraiser's subject property is accurate, it should always be verified through a reliable source.
• Third Party Database Systems:  Unfortunately, many Appraisers utilize Third Party Database Systems as their only source of data when analyzing comparable sales. These database management systems typically obtain their information only from Public Record.  Often they do not update their data often enough for the Appraiser to get an accurate picture of the local market.  Often Appraisers rely only on this source when they are not from the subject property's local market area.  By using only this source, the Appraiser is actually in violation of USPAP (The Uniform Standards of Professional Appraisal Practice).

As the user or client of an Appraisal, you should ALWAYS demand only the best quality and most accurate appraisal by asking the Appraiser if he/she uses RELIABLE sources of data.  If not, you should interview several Appraisers until you know that you will will not waste your money on an appraisal that is not as accurate as you expect.  Make sure your Appraiser is from the market area that he/she is appraising in and competent enough to complete the assignment. 

You can always trust that the Appraisers at Cape Appraisals will always use the most Reliable and accurate sources of information in their appraisals. 

For more information, please contact our Compliance Officer, Jim Kreider at Jim@capeappraisalsfl.com or call (877) 221-4254.

Need a Comp Check or Value Check before you order a full appraisal?

Are you concerned about wasting time and money if your appraisal does not come in at the value you need to close the deal? 

We at Cape Appraisals pride ourselves on our level of integrity and professionalism that we bring to this industry.  We are also concerned about wasting time and money, therefore we offer a unique answer to this never ending problem:  Desktop Appraisals!

If you are unsure about the value, and don't want to pay the fee for a full appraisal just yet, please visit www.capeappraisalsfl.com/valuecheck.  Upon receipt of your property information, your desktop appraisal will be completed within 24 hours.