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 You can also contact The Coyle Group at 215-836-5500 or



Geographic WHAT?!?!

The Coyle Group - Geographic Competency - Philadelphia AppraisersYou may have heard the term Geographic Competency as it relates to appraisers. It’s been a hot topic in the appraisal industry for the past few years. It basically means that an appraiser has to be knowledgeable and capable enough to produce accurate and reliable appraisals within a specific geographic area. The appraiser should also have access to data about a geographic area. It’s the coupling of local knowledge and accurate data that can make the difference between a reliable report and one that’s not worth the paper it’s printed on.

As the appraisal market began to change over recent years, many appraisers found themselves expanding their coverage areas in an effort to stay busy. For some appraisers this meant working in areas with which they were not familiar. This often resulted in reports that were poorly supported and wildly off the mark.

If an appraiser finds themselves in a situation where they do not feel Geographically Competent, they have a few options. All are designed to protect the user of the report from getting inaccurate information from the appraiser.

1) They can decline the assignment

2) They can obtain the knowledge necessary to become competent to appraise in a certain area

3) They can seek assistance from another person who is Geographically Competent in that area

Over my 15 years of appraising in the Philadelphia market, agents have shared stories about appraisers coming from miles away to complete appraisals. My favorite is a tale of an appraiser from Parsippany, NJ who drove two hours (both ways) to complete an appraisal in Philadelphia. That’s insane! Not to mention that after time and travel the appraiser was literally working for peanuts!

But keep in mind that an appraiser doesn’t have to live close to a property in order to be competent to appraise there. Most appraisers are capable of appraising in several different counties or even states. I have an appraiser friend who lives in Lower Bucks County and routinely appraises homes at the New Jersey shore. It turns out that he has a house down there and actually worked in that market for several years. He’s competent to appraise there even though he lives in PA.

If you find yourself in a situation where you are not sure if the appraiser has experience appraising in your area, talk with them about it. Interview the appraiser. Ask about their experience in your area. The answers you receive could save you from a “bad” appraisal.

Do you have any stories about appraisers traveling far and wide to look at properties? If so, please share them.


The Coyle Group’s team of Philadelphia appraisers is a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing appraisals.  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  You can also contact The Coyle Group at 215-836-5500 or




What Philly Agents Are Saying About 2014

As a Philadelphia Real Estate Appraiser, I know what trends I’m seeing day-to-day in the neighborhoods of Philly. However, I thought it would be fun to ask some area Agents what their thoughts were on a couple of issues. Below are the questions I asked along with some of the responses from some of the Philadelphia region’s top agents.

1. How would you describe the Spring market in Philadelphia Metro area so far? and where do you see it going for the remainder of 2014?

2. What do you think has the greatest influence on the market right now…Inventory? Interest Rates? Buyers back in the market?


The Coyle Group - Mark WadeMark Wade

Center City Condos

I hear a lot of talk about the up’s and down’s of today’s market. And what most Realtors are witnessing is multiple offers, properties selling at or above asking    price and a decreased “days on market” statistic.

For the majority of the Center City market, there are more buyers than available inventory and the shift in that relationship will give rise to actions that we see more of today than we would have even six months ago- such as multiple offer bidding. I just encountered three offers on the same home in one day and that home had sat idle for almost two months.

Also becoming common are full asking price offers or even over asking price offers. I think it makes sense (many buyers see the time as being right to snag a condo out of the clutches of others and are therefore willing to put their best foot forward). I am now telling my buyers that IF they see a home they want – do not hesitate to go in quick and strong. Because nothing is more painful than a bidding war. Good for sellers, not so much for buyers.

Lastly, Realtors I speak with also confirm that they are seeing a decrease in the “days on market” calculations. Many homes are selling within days, even hours after being listed for sale

I think the biggest influence today is the lack of overall inventory.


The Coyle Group - Dan CaparoDan Caparo

Coldwell Banker Preferred

Vice President

Although we had a setback in sales due to the harsh winter for the first quarter for 2014 the spring real estate market has arrived and is brisk for buyers and sellers alike.   Our Real Estate market is built around school year more so than the seasonality of the warmer months – they just happen to go hand and hand.   People like to have their children finish school at their current district and start fresh with a new one by September.   There is a considerable inventory shortage in our regional marketplace and well-priced homes don’t last for more than a week.  I still find that price points of $800K+ are moving along in a more healthy fashion but still not to the level of the under $800K markets.

A housing shortage has a great impact followed by the continued challenges of mortgage financing and our tight money policy.  As the mortgage market opens up and loosens its restrictive barriers and other investors [in addition to Fannie / Freddie] enter the home finance market we will see continued improvement in unit sales volume and appreciation.  I believe that rates shouldn’t be a problem until they begin to reach 6%+ because at that point we will see affordability issues.


The Coyle Group - Matt DonnellyMatt Donnelly

Coldwell Banker Preferred

BUSY! Any properties hitting the market that are priced right, move in ready, and in a semi-desirable location are going under contract within 3 weeks on the market. With rising interest rates and more consumers being approved for mortgages I expect 2014 to remain a hot market. Buyers are ready to purchase but need to act quickly because there is a lack of inventory of good, saleable listings.

There are plenty of buyers in this market, and interest rates are still historically low. The greatest influence right now appears to be lack of inventory. We need more sellers!


The Coyle Group - Frank DefazioFrank DeFazio

Berkshire Hathaway HomeServices Fox & Roach, REALTORS

The spring 2014 market is off to a hot start likely due to the pent up demand from a frustratingly cold winder and fears about potentially rising interest rates.  Demand continues to outpace supply and so we are seeing a lot of multiple bids and escalation clauses which is driving home sale prices up. As long as inventory is low and demand is high prices will continue to increase, which is great for sellers but not for buyers.

 Low inventory. Agents have been pounding the pavement for listings since January of 2013 but demand is strong and homes that are priced well and move in ready continue to sell in days, often with multiple offers.  Builders have taken note and new construction inventory is coming towards the end of the summer but for now low inventory continues to cause feeding frenzies and high competition among buyers.


I’d like to thank Mark, Dan, Matt and Frank for their insights.  I find it interesting that they all cited “low inventory” as being the greatest influence on the Philadelphia 2014 real estate market.   I couldn’t agree more.  This market is quickly turning into a text book Sellers Market.  We all know when inventory is low and demand is high, prices will rise.  That’s good for everyone…except maybe Buyers.

The Coyle Group’s team of Philadelphia appraisers is a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing appraisals.  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  You can also contact The Coyle Group at 215-836-5500 or




PMI Removal

The Coyle Group - PMI RemovalIf you bought a home with less than a 20% down payment, chances are you’re paying Private Mortgage Insurance (PMI).  This is a cost that your lender adds to your mortgage payment to insure their risk exposure, should you default.  Depending on the amount of your mortgage, your PMI payments could be a few hundred dollars more per month.  Some lenders use the 1% rule of thumb.  That means you will pay 1% of the loan amount until the equity threshhold is met.  If you have a $200,000 loan, your PMI could be around $200 per month.

But don’t worry; PMI is not forever unless you put less than 10% down and took out an FHA-insured loan, then you will have PMI for the life of the loan.  Check with your local lender, typically will be removed once your equity position reaches 22%, meaning your loan is now 78% of your purchase price or appraised value.

“Well, how do I know that my equity has reached that magic number?”

Typically, once your Loan to Value Ratio (LTV) has reached 80% of your property’s original appraised value, your currrent mortgage service provider will allow you to have PMI removed, upon request.  You have to be proactive in initiating this conversation.  They will not simply remove the mortgage insurance until, by law, your LTV drops below 78%.  When it does, your mortgage servicer is required to remove the insurance.

There are other situations that could prompt your lender to waive PMI.  Perhaps, you made some improvements and/or renovations to your property which increased it’s value.  Another scenario is an appreciation in the market.  While I know the word “appreciation” has been missing from our real estate vocabulary over recent years, there are whispers of it in the air.  Now could be a good time to take a shot at getting your PMI removed.

AGENTS:  This presents a great opportunity for you to reconnect with former clients and possibly help them save some money.

“How do I go about showing that my equity has increased?”

First, pick up the phone and check with your lender to see if they have any special instructions for requesting PMI removal.  Different lenders may have different requirements.

There are other important criteria you must meet if you want to remove PMI on your loan:

  • requests must be in writing;
  • the borrower must have a good payment history and be current on your payments;
  • your loan servicer may require you to certify that there are no subordinate liens on your home (such as a second mortgage);
  • your loan servicer may require you to ensure (i.e. an appraisal) that the value of your property hasn’t dropped below the value of the home when you bought it.  If the value of your home has decreased, you may not be able to cancel PMI.

Most lenders will require a current appraisal of your property.  Some will allow you to select your own appraiser; while most will require that you use an appraiser from their panel of preferred appraisers.  Either way, confirm this with your lender.  You don’t want to have to pay for two appraisals.

If an appraiser visits your home, be sure to share with the appraiser any improvements that you haved done to the house since you bought it.  This will help give the appraiser a better understanding of where your house was relative to its current, improved condition.

The time to act is now.  Every month that passes is just another month you could be saving on PMI payments.  Look at it this way, if your PMI is $150 per month, that’s a savings of $1,800 per year!

If you have any questions related to PMI removal or real estate appraisal matters in the Philadelphia area please feel free to give The Coyle Group a call 215.836.5500 or visit our website .

Special thanks to Mark K. O’Neill, Senior Loan Officer, with  Mortgage Master for his assistance with providing background on PMI and fact checking.  If you are unable to get PMI removed, you may want to contact Mark.  He may be able to refinance your loan without PMI provided you have at least 10% equity in the home.

The Coyle Group’s team of Philadelphia appraisers is a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing appraisals.  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  You can also contact The Coyle Group at 215-836-5500 or


The Coyle Group – YouTube

The Coyle Group Real Estate Appraisal Video

Please watch our new video that outlines many of the services that the real estate appraisers at The Coyle Group provide to attorneys, accountants and private individuals across Philadelphia, Montgomery County, Bucks County, Delaware County & Chester County.


Estate Appraisals 101

IMG_9577A Realtor friend of mine called the other day with a referral to do an estate appraisal for home that they would be listing in Philadelphia, for an estate attorney.  After taking down all the necessary property information, I asked him “How many values will the estate need?” 
To which he replied “Why? How many values do I need?”
After I though about it, I realized that his question was a reasonable one.  How many values do you need for an estate appraisal?
The answer…well, that depends. 
Estate appraisals are needed when a property owner passes away and the finances of that person’s estate have to be settled.  They are typically ordered by the estate’s attorney, accountant or the executor, usually a family member or trusted friend of the deceased.  The primary reason for the appraisal is to aid in determining how the inheritance tax will affect the estate.  Depending on how the estate is being administered, an appraiser could be required to provide more than one value.  
The most common request that we receive is what we call a Date of Death Valuation.   This is simply a retrospective appraisal as of the date of passing.  It establishes the value of the property at the time of death.  Sometimes the appraisal is orders shortly after the DOD.  Other times, the estate may wait several years to initiate the appraisal process.  This involves looking at older sales data, if it’s available.  I believe our local TReND MLS service goes as far back as 1992.
Another request is for a current fair market value.  This is just as it sounds, a current value of the property regardless of the Date of Death. 
Some estates will require both values mentioned above.  This is typically the case when an estate has been drawn out over a prolonged period of time.
A few years back, we had a situation where we were contacted by an attorney to do an estate appraisal in Chestnut Hill.  The kicker here was that the husband passed away in 2004 and his estate was not settled at that time.  Remember, this was during the upswing of the boom market.  His wife passed away at the peak of the market in the Summer of 2006.  We were engaged to perform the appraisals in 2008, when the market was in free-fall.  So, given the market volatility during that time period, we were asked to provide three different values.  It required three sets of comparables and analysis.  You can imagine how different those three values were!
So if you are an attorney or an agent involved with an estate and need an appraisal, be sure to have an understanding of which appraisal  effective date you will need.  It may likely have a significant impact on the estate’s inheritance tax liability.
If you are an attorney in need of an appraisal for an estate you are representing, please feel free to give us a call.  If you know someone who needs an estate appraisal, please do not hesitate to contact The Coyle Group.  We will handle the situation with the professionalism and sensitivity it deserves.  Contact The Coyle Group at 215.836.5500 or   For more information please visit our website at