Agent Alert!

AGENTS!  Spring is here and these warmer temperatures will only help to heat up the Spring Selling Season.  If you haven’t done so already, now is the time to take a hard look at your older listings and think about how they will compete in the Spring market.  Perhaps, it’s time to do a little Spring cleaning and meet with your Buyers to decide whether they need to “reposition” (re-price) their listing. 

You can bet this new crop of inventory will be priced to sell.  If you want to contend with these new listings, you need to have a competitive price.  Proper pricing is the key!

One way to test the market is to have a Listing Appraisal completed.  Now, having an appraisal completed on a listing is not necessary for all situations.  However, if you have a unique property or a stubborn Seller, a Listing Appraisal may be the way to go.

The obvious benefit is that a Listing Appraisal will provide you and your client with an unbiased, professional opinion of the property’s current fair market value.  Aside from that important fact, there are other benefits to having an appraisal completed on your listing. 

As an agent, having a Listing Appraisal completed allows you to still “be the good guy” and maintain your client relationship while adjusting your Seller’s expectations.  Unfortunately, some Sellers refuse to believe that their home has been affected by recent real estate trends or, perhaps, they feel that shag carpeting and pickled-wood cabinets are making a come back with Buyers.  Having an impartial appraiser look at the property could provide you with the insight and feedback necessary to help your Seller “see the light.”

A Listing Appraisal also gives agents and Sellers an idea of how a potential Buyer’s appraiser may view the property when completing an appraisal for mortgage financing.  This way you limit the chance of being hit with any last-minute surprises or having to renegotiate your contract price because of a Buyer’s appraisal.

If your listing falls under the FHA program limit of $420,000 for Philly region, having a Listing Appraisal can provide added benefit.  Some appraisers will actually perform an FHA-style inspection when looking at your property and incorporate their findings in their appraisal report (our office does this as standard practice).  This will give you and your Seller a heads-up on any potential FHA issues that may affect your Listing.  That information can be used to correct the problem, possibly eliminating future headaches, negotiations and wasted time.

So, what’s the cost?  Well, typically a Listing Appraisal will be in the $300-$450 range (sometimes more if the property is unusually large or complex).  However, if you think about it, this is a relatively small investment if it can minimize your listing’s time on the market.  Or look at it another way…would you (or your Seller) be willing to pay $300 if you knew that your listing could sell faster and that you wouldn’t have to waste weeks dealing with hidden FHA issues, negotiations and stress? 

Think about it…and have a great Spring!

If you have any questions about Listing Appraisals or any other appraisal related question, please feel free to contact our office at appraisals@coyleappraisals.com or 215.836.5500.

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Got UAD?

Got UAD?  If you don’t, you certainly will by September 1st, 2011. 

What is UAD you might ask?  Well, UAD stands for Uniform Appraisal Dataset.  It is the new format in which all appraisal reports will be completed if the loan is to be sold to Fannie Mae or Freddie Mac.  The UAD was developed in an effort to standardize appraisal reports and to aide the GSEs (Fannie and Freddie) in better manage their loans and risk.  Since, most loans are sold to Fannie or Freddie, and since the VA and HUD have already agreed to adopt the new UAD format, almost all mortgage appraisals completed on or after September 1st will have to comply. 

The UAD will change the way appraisals are written and make understanding the reports even more complicated for the average homeowner.  Some of the changes are fairly minor; however, 0thers are more significant.  The biggest changes are in how certain data fields are populated.  Fields like Condition, Quality of Construction, Bathroom Count, Lot Size and View will see the most change.

Condition – rather than using terms like “Average” and “Good” to describe a property’s condition there will be a rating scale of C1 – C6.  Each rating will describe a specific degree of condition.  C1 will be at the high end and C6 will be at the low end of the range.

Quality of Construction – like Condition, this field will do away with descriptors like “Stone/Frame/Good” and “Vinyl/Average”.  There will be a quality range with standardized definitions from Q1 – Q6. 

Bathroom Count – the new UAD will standardize the format in which bathroom count is shown in the report.  Before, appraisers might use 2.5 or 2F1H to describe a home with 2 full and 1 half baths.  The new format will be shown as 2.1 baths.  If a property has 3 full and 2 half baths, it will say 2.2 baths.  Not that big a change.

Lot Size – lot size and acreage will be described in whole numbers.  Rather that an appraiser using 16’X 72’ to describe a lot in an urban setting they will use 1152 (square feet).  Acres will look like this, 3.2 to describe 3.20 acres.  Anything less than an acre will be in square feet.

View – the appraiser will have to use one of a number of abbreviations or acronyms to illustrate certain view attributes. They will also have to make a determination as to whether or not the view is “N” (Neutral), “B” (Beneficial) or “A” (Adverse).  So the UAD complaint View field describing a home with a residential, golf course location may look like this “B, Res, GlfCrs”.

Below is a guide that describes the Condition and Quality rating scales, Bathroom Count and some of the new abbreviations for View as well as other fields.

This new format may be confusing at first.  If you have any questions about the UAD or appraisals, please feel free to contact one of the appraisers at our office.

Please note that the UAD will not effect the way appraisals are completed for Divorce, Tax Appeal, Estates/Probate, Pre-Listing valuation, Commercial valuation, QRPTs or for determinations of Fair Market Value.

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The Importance of Listing Appraisals

Last week temperatures in the Philadelphia area flirted with 70 degrees.  Spring fever was definitely in the air.  People were out and about; and for a day or two everyone forgot that it was still February.  It got me thinking about the upcoming Spring Selling Season. 

Traditionally, Spring is when the Philadelphia real estate markets start to shake off the Winter sluggishness and things start to pick up again.  However, I can’t help but think this year may be different.  Given accumulating inventories, high unemployment, impending inflation and the lack of a tax credit, the 2011 Spring Selling Season could be a challenge.  Sellers and Agents alike will need to rethink their marketing strategies and pricing in order to be competitive enough to attract Buyers.

Pricing will be the key this Spring. 

For Agents, this year more that ever it will be important to make sure listings are priced to compete.  Not only will you have to compete with the older listings that are out there, you will have to go up against fresh, new listings that will be priced to move.  If you haven’t thought about getting a Listing Appraisal, now is the time to act. 

More and more, Agents and Sellers are having Listing Appraisals completed to aide their decisions about pricing and marketing strategies.  They realize that in this market not only do you have to price a house to sell, you have to price it so that it will appraise, as well.  Other Agents (your competition) are getting Listing Appraisals.  Frankly, if you are relying on the same old CMA these days, it’s like bringing a knife to a gunfight. 

Aside from helping to price a house properly, there are several benefits to having a Listing Appraisal done:

  • Demonstrates to the Seller that the Agent is committed marketing the house effectively
  • Sets realistic expectations for Seller
  • Provides Seller with an unbiased opinion of how their home compares to others on the market
  • Helps maximize the asking price without overpricing or under-pricing
  • Can help identify potential problems, repairs or issues present at the house that may cause delays or make the sale fall through
  • Gives the Agent/Seller an indication of how a potential Buyer’s appraiser may view the property which could have an affect on the Buyer’s ability to obtain financing
  • Can help reduce days on market, resulting in higher selling prices and possibly eliminate unnecessary negotiations 
  • Saves time, money and effort

Selling a home can be a very emotional process.  Perhaps the most important benefit of a having a Listing Appraisal completed is that it allows Agents to maintain client relationships without having to be the bearer of bad news.  The Appraiser is the one to present any unpleasant or “bad” news to the Seller.  The Agent is there to aide the Seller with interpreting the news and devising a strategy to sell their home. 

Listing Appraisals can also provide some level of defense against issues arising from the HVCC Guidelines; namely, appraisers who are unfamiliar with your market, inexperienced appraisers and appraiser who may not have access to the best data for your market.  The Listing Appraisal will provide a benchmark against which any subsequent appraisals can be measured. 

So, as the Spring Selling Season begins to heat up, it is time to invest in your own success and that of your Sellers.  Get a Listing Appraisal from a Certified Real Estate Appraiser.  For $300-$450 depending on the size and complexity of the property being appraised, Agents and Sellers can get a solid understanding of the value of a property and use that information as a tool to develop the best pricing strategy possible for the property. 

For more information on Listing Appraisals please contact The Coyle Group at 215.836.5500.

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