Feeling Frustrated!

Yesterday, a home in my neighborhood went up for sale.  I know it well.  When it hit the MLS, the agent cited the Square Footage as being “estimated” at 3,700SF.  Trust me.  On it’s biggest day, this is not 3,700SF.  Overnight, the house apparently shrunk.  Because, as of this morning, the house is now “estimated” to be 3,200SF.

While the SF in the MLS is closer to the actual square footage, it’s still not accurate.  Public Records indicate that this house is 2,577SF with an additional 525SF of below grade, finished basement.  If you look at the Assessor’s sketch on the Montgomery County site, the square footage calculates to 2,545SF.  For the sake of argument, let’s agree that the house is roughly 2,545 – 2,580SF.  These calculations are fairly accurate based on what I know of the house.

All real estate professionals have to be more careful.  We owe it to the public and our colleagues.  Estimating and guessing can be so misleading.  Lumping finished basement space into Above-Grade living space is also misleading.  Think about it.  Will your clients pay the same P/SF for the Rec Room in the basement with the drop ceiling and 1970’s paneling as they would for the Above-Grade space?  Probably not.  Take a look at how these numbers breakdown on a Price/SF basis based on a list price of $750,000.  (I know I preach against P/SF but, it’s an easily comparable metric that everyone seems to understand.)

Big difference, huh?  How would you like to be the person who buys what they think is a 3,200SF home for $750,000 (or $238/SF) only to find out that it’s actually 2,580SF at $238/SF?  That would indicate a value of $614,040.

Agents, as we begin 2020, please make it a habit of measuring your listings or having them measured.  Knowing the true Square Footage of your listings matters.  How you report that Square Footage matters.  Make it a business practice of separating Above-Grade living space from Below-Grade living space.

If you have any questions about measuring homes or what should or shouldn’t be included as living space, please feel free to contact me.

The Coyle Group’s team of Philadelphia appraisers are a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing. We also provide property measuring services.  If you need a guest speaker at your next sales meeting, please give us a call. We would welcome to opportunity to speak to your group and field any appraisal related questions you may have. For more information please visit our website at www.TheCoyleGroupLLC.com You can also contact The Coyle Group at 215-836-5500 or appraisals@coyleappraisals.com

 

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Things Aren’t Always What They Seem

Things aren’t always what they seem…

Take Manayunk (19127) for instance. If you were to look at the numbers for 2019, you would think that Manayunk is on fire and that median sale prices are shooting through the roof. Last year, the median sale price in the 19127 MLS Area ranged from $215,000 to $288,000. But in December, the median shot up to $430,000!

 

 

 

 

 

However, when you take a closer look at the sales data, you notice something that jumps out. While there were only 12 settled residential sales in 19127, five of them were well above anything else sold in 2019. As it turns out, “The Locks” townhouse development was able to close on a number of properties before the end of the year. They ranged in value from $788,415 all the way up to $991,188. These five sales skewed the market so much that if you were to look only at the raw data, you would be convinced that Manayunk is the new Point Breeze.

 

 

 

 

 

This is why Appraisers tend to look deeper into the data to understand real estate markets. In this situation, if the five outliers are removed, the chart tells a much different story. The median sale price falls to $250,000 which is much more in-line with what 19127 had been indicating all 2019. In fact, Manayunk may be experiencing a seasonal downturn, which is typical of this time of year.

 

 

 

 

 

 

Things aren’t always what they seem in data, life and especially real estate. If you need help understanding the trends and indicators in your market, please feel free to contact us. Have a great 2020!

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2020 and Inventory Levels

There are many articles out there right now that point toward Inventory Levels as being a key factor in the 2020 real estate market, here in the Philadelphia region.

This chart is a quick look back at inventory levels throughout 2019. As you can see, there’s pretty steep drop off between January and December. The 4th quarter drop-off is likely a result of seasonality and the Holidays when everything real estate tends to slow down.

No photo description available.

The Spring Market may come early this year as sellers try to take advantage of strong prices despite signs of market stabilization and decline in some areas. Buyers still have record low interest rates on their side, that is if they can find a house to buy.

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Getting Ready for the 2019 Spring Market in Philly

 

 

 

 

 

 

OK, maybe I’m jumping the gun but, the last couple of days in Philly with temperatures in the 50’s and 60’s have given me a case of early Spring Fever.  I know that Winter 2019 is not over, despite what the Groundhog may think.  But I’m an optimist!  I know Spring will come…and along with it the Spring Selling Season.  The question is, Are you ready for it?

Inventory levels are starting to accumulate.  This is a result of a few things.  First, seasonality, the Philadelphia RE markets tend to slow down around Thanksgiving, lag through the Holidays and into they new year.  Markets tend to wake-up a little around Valentines Day and usually are in full swing by March.

However, this past year was a little different.  Rising interest rates slowed the roll into the End-of-Year market.  As a result, Buyers pulled back and began to sit the sidelines.  At the same time, home prices were at an all-time high and in many areas were becoming unaffordable.  So, if you couple increasing rates with pie-in-the-sky pricing (and tentative Buyers) it’s a recipe for a “cool down”.  This put downward pressure on the pricing of existing listings and forced new listings to be razor-sharp with their pricing.

This Spring, new entrants to the market will have to be just as precise with their pricing in order to attract the Buyers.  Existing listings will also have to re-think pricing strategies in order to remain relevant.  Sellers will also have to be more flexible, especially those with listings already on the market.

Here are a few suggestions to help Agents and Sellers to prepare for the Spring Selling Season:

  • Price the home properly, the first time.  Know your market, know the comparable sales as well as the competing listings.  If necessary, get a Pre-listing Appraisal to help you in developing an effective pricing strategy.
  • Be Accurate.  Don’t rely on public records or Seller estimates to determine the Square Footage of your listings.  The public records are notoriously incorrect and Sellers tend to over-state the GLA.  The number one reason Agents get sued is for misrepresentation of the size of the house.  Have the property measured.  It’s an inexpensive investment that will help you more accurately price the house (and could save you in the event of a lawsuit).
  • Call it as it is.  Avoid getting creative with the description of the house or the design.  If the house is a “Split Level” don’t insist on calling it a “Colonial”.  If it’s an over-sized one car garage, please refrain from calling it a 1.5 car garage.  Who ever made half a car?  If you have no idea what to call it, contact an appraiser.
  • Above or Below Grade Living Space.  This is another area where accuracy in reporting the facts of a house is very important.  Given the high quality of below grade living space that we see in homes these days, I can understand the temptation to include finished basement space as part of the overall living space.  However, the areas of above and below grade space should be differentiated.  The MLS gives agents the ability to separate these spaces and correctly report the GLA of a property.  If you are not sure of what is above grade or below grade space, have it measured.  Many appraisers offer measuring and sketching services to agents and homeowners.
  • Photo the Front!  Always include at least one photo of the front of your listing.  So many listings these days have no picture of the house.  They have lovely shots of flowers on tables, shower heads, gardens, carved mantles and glass doorknobs but, not picture of the front of the house.  It’s like going to a dating website and all you see are pictures of a person’s body parts in their profile but, not one photo of their face.  Kind of makes you wonder what they’re hiding, huh?  The MLS allows up to 25 photos per listing, please use one for the front of the subject property.

Here’s to a strong Spring Selling Season in Philly!!  If you ever have any appraisal related questions or are interested in learning more about the other services we offer (Pre-listing Appraisals, Home Measurements or speaking engagements) please feel free to contact The Coyle Group at appraisal@coyleappraisals.com or 215-836-5500.

The Coyle Group’s team of Philadelphia appraisers are a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing. We also provide property measuring services.  If you need a guest speaker at your next sales meeting, please give us a call. We would welcome to opportunity to speak to your group and field any appraisal related questions you may have. For more information please visit our website at www.TheCoyleGroupLLC.com You can also contact The Coyle Group at 215-836-5500 or appraisals@coyleappraisals.com

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How You Can Assure an Accurate ARV Appraisal

It seems like everyone is flipping houses here, in Philadelphia.  Why not?  Certain markets continue to be red hot, housing stock is plentiful (if you know what to look for and where to look) and relatively speaking, Philadelphia is still somewhat affordable when compared to other Metro areas like New York, Boston and DC.

But flipping houses is not for the faint of heart or the inexperienced.  It takes some chutzpah and serious knowledge to be efficient and profitable when flipping.  The foundation of determining the profitability of a flip project is determining an accurate “As Is” value for the property.  From there the As Repaired Value (ARV) can be developed.  The ARV includes both its purchase price and the value of its renovations.  It’s used to by investors and lenders to estimate the future sale price of the property once renovated.  It’s important for flip investors to know the ARV of a property because it helps measure whether or not there is enough margin for the flip become profitable.

If the person doing the flip is obtaining funding from a bank, hard money lender or private lender, this is often where an objective Certified Real Estate Appraiser is called in to determine the ARV.  Most folks figure that from this point, it’s up to the appraiser and there is little that can be done.  Well, that’s not exactly true.  There are certain things that you can do proactively to help assure that you get an Accurate ARV Appraisal.  Let’s take a look…

  • Make sure the appraiser knows the market. If the appraiser is coming from Berks County to appraise a property in Philly, it should raise a red flag. Ask the appraiser if they work in this market often?  Do they have the tools necessary to appraise in this market, like access to the MLS, public records, zoning records, etc?  If not, insist on using an appraiser that does.
  • Make sure the appraiser has experience completing ARV assignments. ARV Appraisals are not like regular appraisals.  There are nuances to an ARV assignment that set it apart from standard lending appraisals.  Be sure the Appraiser has the experience and necessary skill sets to do this type of work.  Not all Appraisers are created equal.
  • Make sure Appraiser takes plenty of photos. These help the end-user/investor (whom are often located in other parts of the country with no real understanding of Philly markets) fully understand your project.  Don’t leave it up to the Appraiser to explain.  Again, some Appraisers just don’t have the proper skills to adequately describe what’s going on at your project.  This is where photos come in handy.  Remember a picture is worth 1,000 words.
  • Make sure the Appraiser understands the level of communication you expect and that they can expect from you. This is a two-way street.
  • Bring Comparable Sales with you when you meet the Appraiser. Some Appraisers may not accept them, most will, even if they don’t use them.  Just be honest with yourself and the Appraiser when providing Comps.  Make sure they are recent, within 6 to 12 months.  Use settled sales rather than listings.  Settled sales are facts, listings are “hope to get” prices and may distort your ARV numbers.  Make sure they are similar in terms of design/style (avoid bringing Detached homes as Comps if your subject is a Row).  Choose Comps with a similar location, preferably from within the neighborhood (if your project is in Philly, you shouldn’t have to go more than a few blocks).  Make sure the subject and Comps are similar in age (if your home is a 95-year-old row, maybe that new construction townhouse around the corner isn’t the best comp).  Lastly, take into consideration the quality of the improvements and be honest.  Are you comparing a project that may have been finished with builder-grade materials to a Comp with all high-end custom finishes?  If so, it will skew your ARV numbers and potentially impact your investment.
  • The Scope of Work (SOW), Plans & Specifications and Construction Budget are the nuts-and-bolts of your project. They should be as detailed as possible and leave nothing up to guess or assumption.  For example, if you’re SOW states only that you’re “installing a new kitchen” that leaves a lot of room for guessing/assumption on the part of the Appraiser.  In the Appraiser’s mind a “new kitchen” might be a “Home Depot special” when, in reality, your project calls for a custom kitchen with granite counters, tile floors/backsplashes and high-end appliances.  Can you see how the lack of detail could impact your ARV?  Be super specific.

Using these points will help you assure that you are getting an accurate ARV Appraisal.  If you have any questions or comments, feel free to contact our office.  We’ve been appraising and completing ARV Appraisals for over 18 years and look forward to assisting you with your future projects.

The Coyle Group’s team of Philadelphia Real Estate Appraisers are a leading provider of appraisals for ARV (for Investors, Hard Money Lenders & Private Lenders), Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing. We also provide “footprint” sketches for determining a more accurate square footage of a property.  If you need a guest speaker at your next sales meeting, please give us a call. We would welcome to opportunity to speak to your group and field any appraisal related questions you may have. For more information please visit our website at www.TheCoyleGroupLLC.com You can also contact The Coyle Group at 215-836-5500 or appraisals@coyleappraisals.com

 

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Bye-Bye PMI

The “perfect storm” is here.  There are a number of factors that have come together to create the ideal time for some homeowners to say “Bye-Bye PMI”

The factors that are in play are:

  • Overall market appreciation
  • Unusually low inventory
  • Health of the economy
  • Buyers willing to pay practically anything to get into a house
  • Interest rates that have been at historic lows (until recently)

Current homeowners who may have PMI (Private Mortgage Insurance) could possibly save hundreds if not thousands of dollars over the term of their loan.  This is a great opportunity for savvy homeowners to take advantage of their home’s appreciation.

You may be asking, “What does this have to do with me?  I’m a real estate agent or a mortgage professional.”   While removing PMI may not benefit you, it could benefit your former clients.  Those folks who already know you, like you and trust you.  You probably already know which of your clients may have had to carry PMI.  It’s a great time for real estate agents and mortgage professionals to provide ongoing value to your past clients without “selling” them anything.  Call them, email them or text them, whatever you choose.  Most importantly, show them that you still have their backs and that you can help them potentially remove PMI and save money.  Provide value!  Who knows…they may be planning to sell or refi in the near future and, now they are thinking about you.

The procedure for PMI removal can vary from lender to lender.  So, be sure that your client checks with their lender to obtain a set of instructions for the process.  The general process for PMI removal is pretty simple.

Most lenders require that a request for PMI removal be made in writing.  The borrower will have to be in good standing with the lender, with no late or outstanding payments (again, this will vary).  The lender will need a current appraisal completed specifically for the purpose of PMI removal (that appraisal from the refi that was done last Fall may not be acceptable).  If the appraisal can demonstrate that the borrower’s home has appreciated to the required loan to value limits (check with the lender form their specific limits), PMI should be removed for the remainder of the term.

If you have any questions about PMI Removal or real estate appraisals, please feel free to contact me.

 

The Coyle Group’s team of Philadelphia Real Estate Appraisers are a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing. We also provide “footprint” sketches for determining a more accurate square footage of a property.  If you need a guest speaker at your next sales meeting, please give us a call. We would welcome to opportunity to speak to your group and field any appraisal related questions you may have. For more information please visit our website at www.TheCoyleGroupLLC.com You can also contact The Coyle Group at 215-836-5500 or appraisals@coyleappraisals.com

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Tax Appeal Deadline Approaching

If you live in Philadelphia, you have probably already received your Proposed Notice of Valuation for 2019 from the Office of Property Assessment (OPA).  Keep in mind that this is NOT A BILL.  It’s a notice stating that the OPA believes that the value of your property has increased and that your assessment (and property taxes) will also be increased, as a result.  If you feel that your new proposed assessment value is incorrect, you do have the right to file a First Level Appeal (FLA).  The deadline for filing an FLA is May 25, 2018.

What is a First Level Appeal?  The following information was taken directly from the OPA website and describes what an FLA is and the process:

http://www.phila.gov/OPA/Assessments/Pages/Appeals.aspx

First Level Review & Appeal

The First Level Review (FLR) process has been put in place for property owners who believe the new proposed value of their property for TY19 is incorrect. Forms to request an FLR have been included in the April mailing. If you do not receive or misplace your FLR form, please contact 215-686-9200 to request a replacement form.

The FLR process is as follows:

  • Complete and submit the FLR request form—one FLR form per parcel—and include any additional information for the Office of Property Assessment (OPA) to consider, such as photos or recent appraisals, by May 25, 2018.
  • Based on the submitted information, the Evaluator may decrease, increase or keep the assessed value the same.

Commercial/Multi-Family properties that receive an assessment notice for TY19 and wish to file an FLR, must also include income and expense forms for the last two years (2016 and 2017). The forms are below:

If you are not satisfied with the outcome of the review or decide to skip the FLR process altogether, you may file a Formal Appeal with the Board of Revision of Taxes (BRT). Formal appeals are due to the BRT by the first Monday in October (1, 2018).

The deadline for filing an appeal is quickly approaching!  In the next few days, I will be sharing more information on the Philly Tax Appeal Process.  Topics like:

How does the OPA Assess Property?

Do I need an Appraisal to file a FLR Appeal?

Will the OPA show me the sales that they used to assess my property?

In the meantime, if you need an appraisal or have any questions pertaining to your new Proposed Value or your appeal, please feel free to contact us at appraisals@coyleappraisals.com or 215.836.5500

 

 

 

 

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Take a Pic and Ask a Question!

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

If you ever see something at a property and find that you have questions, just take a picture or shoot a video and text your question to me!  Questions like…Is this an FHA or VA repair issue? Is this functional obsolescence? Is this likely to have an effect on the value?  Should my Seller have this repaired prior to putting the house on the market?   I’ll give you my professional opinion.  Please feel free to share this with your Philly Agent/Broker colleagues!

 

Michael Coyle  text  610-316-8007

 

The Coyle Group’s team of Philadelphia Real Estate Appraisers are a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing. We also provide “footprint” sketches for determining a more accurate square footage of a property.  If you need a guest speaker at your next sales meeting, please give us a call. We would welcome to opportunity to speak to your group and field any appraisal related questions you may have. For more information please visit our website at www.TheCoyleGroupLLC.com You can also contact The Coyle Group at 215-836-5500 or appraisals@coyleappraisals.com

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Celebrating 10 Years!

On January 1, 2018, The Coyle Group celebrated the beginning of our 10th year in business!  We owe our success to the countless real estate agents, property owners, attorneys, banks, credit unions and mortgage professionals who have come to trust us and rely upon our services.  Every day we strive to serve our clients and provide value.  We appreciate your loyalty and business as we look forward to the next 10 years!

To show our appreciation we are offering 10% Off all Pre-Listing, Estate, Tax Appeal, PMI Removal, Bankruptcy and Divorce appraisals ordered throughout the month of February 2018!  Just mention this post or coupon code:  10FOR10

Eligible properties are non-complex Single Family Dwellings located in Philadelphia, Montgomery, Bucks, Delaware & Chester Counties.  The appraisal must be paid for by Check, Cash or PayPal at or prior to the time of appointment.

Thank you!

TCG Logo

The Coyle Group’s team of Philadelphia Real Estate Appraisers are a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing. We also provide “footprint” sketches for determining a more accurate square footage of a property.  If you need a guest speaker at your next sales meeting, please give us a call. We would welcome to opportunity to speak to your group and field any appraisal related questions you may have. For more information please visit our website at www.TheCoyleGroupLLC.com You can also contact The Coyle Group at 215-836-5500 or appraisals@coyleappraisals.com

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Why Knowing the Actual Square Footage is So Important

This past tax appeal season we got to see first-hand how important it is to know the true square footage of a house. In this case, it saved our client over $4,000 per year!

We were hired to do a tax appeal appraisal of a home in the Bryn Mawr section of Lower Merion Township. The homeowner was paying over $15,000 per year in property tax. It was a very straightforward assignment.

So, we inspected and measured the property. Our measurements showed that the house was 2,808 SF.  Not a big house by Main Line standards but, a good size.  The problem was that the assessor’s record and sketch of the house showed that the property was 4,438 SF.  That’s a huge disparity.

After talking with the assessor, we found out that the house had only been measured from the exterior and that the assessor never went inside the house. Had the assessor gained entry to the house they would have seen that a large part of the first floor had ceilings that were actually two stories high.  The assessor assumed that the second floor mirrored the foot print of the first floor.

In this case, knowing the true square footage got our client a 25% reduction in their assessment which translated into over $4,000 per year in savings going forward!

As an Agent, you can’t always rely on what is in the public records. If you ever find yourself questioning the square footage, it’s always best to have the property measured.  The most common lawsuit against real estate agents is for misrepresentation of a property’s square footage.  A simple “footprint” sketch can save you from all sorts of headaches and possibly a law suit.

Most appraisers can provide basic sketches that will give you a good idea of the actual square footage. If you need something more detailed and “professional” there are several services that will do architectural renderings of a property that are great for high-end marketing pieces.

 

The Coyle Group’s team of Philadelphia Real Estate Appraisers are a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing. We also provide “footprint” sketches for determining a more accurate square footage of a property.  If you need a guest speaker at your next sales meeting, please give us a call. We would welcome to opportunity to speak to your group and field any appraisal related questions you may have. For more information please visit our website at www.TheCoyleGroupLLC.com You can also contact The Coyle Group at 215-836-5500 or appraisals@coyleappraisals.com

 

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