The 6 Month Rule

The Coyle Group - 6 Month Rule - Philadelphia Real Estate AppraiserWhile at an appraisal inspection in the Fishtown section of Philadelphia I met a Realtor who asked a question that I get a lot.  As he handed me the comparables sales he used to price the property, he asked…

“Why can we only use sales that settled in the past six months?”

Ah, the old 6 Month Rule. Well, the truth is there is no rule set in stone that says appraisers can only use comparables that have sold in the last six months.  While it would be ideal, that isn’t always possible.

It’s the appraiser’s job to identify the BEST comparables available.  If that means going back 7 months, that’s OK.  If it means going back 12 months, that’s OK.  If it means going back 18 months, that’s OK, too.  However, it is the appraiser’s responsibility to explain why they used sales older than six months.

For instance, if I have a perfect comparable located next door to the subject that sold 11 months ago…you bet I’m going to use it.  I’d probably be remiss if I didn’t.  As appraisers we can and should make time adjustments to reflect any movement in the market since the time of the older sale.  Note: In our office, we start by setting our search parameters at 12 months for each assignment.

So, next time you’re meeting an appraiser and want to provide sales data, feel free to provide sales older than six months.  I’d recommend no older than 12 months unless the sale is really relevant to the subject.  I’d also recommend providing only truly comparable sales to the appraiser.  You’d be amazed at the “comparables” we are given sometimes but, that’s a topic for another blog post.

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. 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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Five Fast FHA Fixes!

The Coyle Group - HUD LogoFor those Agents who deal with FHA and VA financing, you understand how the required repairs can be frustrating, costly and time consuming.  Sometimes the repairs may even kill your deal.  As Philadelphia Appraisers we certainly understand your situation. That being said, let’s keep in mine that the repair requirements are intended to protect the borrower/veteran.

There are; however, a number of fixes that can be done proactively to reduce or eliminate FHA required repairs.  Here is a list of five easy FHA repairs that can be done ahead of time that will save you and your seller time, money, hassle and in the end help the home get sold.

 

The Coyle Group - Defective Paint - Philadelphia AppraiserDefective Paint.  This is one of the biggest FHA issues out there and one of the easiest to recognize and repair prior to listing.  If a home was built prior to 1978, there is the potential for the presence of lead based paint.  This applies to the dwelling and/or all related improvements (garages, sheds, barns, fences, outbuildings and appurtenant structures).  The appraiser is to observe all interior and exterior surfaces including common areas, stairs, decks, porch, railings, windows and doors for defective paint (cracking, scaling, chipping, peeling or loose) and call for repair.

If these areas of distressed paint can be identified and taken care of ahead of time, your seller and you are ahead of the game which will result in saved time, money and hassle.

Please note that all repairs should be in compliance with HUD and EPA guidelines.

 

Missing Hot Water Heater Valve Extension.   The FHA requires that all hot water heaters be equipped with an extension to the pressure relief value that extends to within six-inches of the floor.  This is to prevent scalding should the valve release.  As appraisers in Philadelphia, we run into this one all the time.  The fortunate thing is that this is literally a $5.00 – $10.00 fix and can be done by almost anyone.  This fix can easily save hundreds in appraiser re-inspection fees, hassle and lost time that could jeopardize the deal.  Simply, go to the Plumbing Supply department of Lowe’s or Home Depot and explain your problem to an associate.  If they can’t point you a pre-made extension, they will easily be able to show you to the components to make one for yourself.

(HINT:  If you’re an agent that does a good deal of FHA/VA business in Philadelphia or the surrounding counties, you may want keep one or two of these in your car, just in case.  Also, some extensions will require an elbow joint as well.)

The Coyle Group - Hot Water Heater - Philadelphia Real Estate Appraiser

Heater without Extension

The Coyle Group - Pressure Relief Valve - Philadelphia Appraisal

Heater with Extension

 

 

 

 

 

 

 

 

The Coyle Group - GFCI Outlet - Philadelphia Appraiser

GFCI Outlets.  This is another one that we see all the time.  Look at it this way, if your seller has an electrical outlet within six-feet of a water source (a sink, washer, toilet, shower/tub, etc) they should replace it with a GFCI outlet.  If the outlet is already part of a GFCI breaker but doesn’t have the easy-to-see reset buttons, you may want to have a qualified electrical contractor write-up a certification to that effect prior to listing.  Show the cert to the appraiser and buyers.  It should take that FHA repair off the table.

 

The Coyle Group - Frayed ESW 2 - Philadelphia AppraiserFrayed Electrical Service Wires (ESW).  As a Philadelphia Appraisal firm, we appraise a lot of older homes.  Even if an older home has been updated, sometimes the exterior electrical elements can got forgotten.  After years of exposure to the elements, the exterior (and some times interior)  ESW can become cracked and frayed.  This poses an obvious hazard.  If your seller has this problem, recommend that the replace the exposed lengths of ESW.  Again, it’s an easy fix that will save money, time and hassle in the end. It will also show the buyer that the seller has been maintaining the electrical service.

 

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Non-Functional Appliances.  With the new FHA Guidelines for appraisers, one of the new requirements is that the appraiser must test that all appliances are operational.  While many appraisers feel that this is more a job for a Home Inspector, it is the way things are for now.  So, if your client has an y appliances that are non-functional, it is recommended that they repair or replace them prior to listing.  If the appraiser finds that they are not operational, the seller will have to repair/replace them anyway.  So why not proactively take the problem out of the equation?  The house will show better and there will be less wasted time, money and hassle.

By now, I’m sure you’ve caught on that these Five Fast FHA Fixes will all save your client and you a great deal of time, money and hassle.  I hope you found this informative.  If you have any questions about FHA repairs or any appraisal related matter reach out to us by email, phone or FaceBook.  Also, feel free to ask about our FHA Pre-Listing inspections where one of our appraisers will visit a property and inspect it for any potential FHA repair issues, prior to listing.

The Coyle Group’s team of Philadelphia appraisers are a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing. 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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ATTENTION AGENTS!!!

Attention Agents - The Coyle Group

Attention all Real Estate Agents!  Do you want to stand out from the crowd and really stay in the minds of your clients and prospects?

Well, you’re in luck…its tax appeal season!  For the next few of months homeowners across the Philadelphia region will have a chance to appeal their tax assessments.  This is a great opportunity for real estate agents to reconnect with current clients, old clients and prospects!  It’s also an opportunity to bring real value and show them that you’re not just any-old real estate agent but, a trusted partner who is looking out for their best interest.

Over the next few weeks, try reaching out to your old clients and prospects suggesting that they might want to consider appealing their taxes.  Show them that you’re looking out for them and want to help them save money.  Imagine how happy your client would be if you were able to help them save hundreds or thousands of dollars off their tax bills each year!

If you have any questions on how the assessment and appeal process works (in Philly, Montgomery, Bucks, Delaware, Chester or Berks Counties) or how to figure out if your clients/prospects would be good candidates for an appeal, please feel free to contact our office.

The Coyle Group’s team of Philadelphia appraisers are a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing. 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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Spring Cleaning time!

Spring Cleaning Just Ahead Green Road Sign with Dramatic Clouds, Sun Rays and Sky.

It was almost 60 degrees this past weekend and really started feeling like Spring. I know I just probably jinxed us into another blizzard or two in March and April. Regardless, the weather got me in the mood to do some clean-out in our garage.

While moving some things around and tossing others, it got me thinking that now is the time for agents to start doing “Spring Cleaning” with their current inventory. We all know Spring is when the Buyers come out of hibernation and savvy Sellers want to list. Now is the time to revisit those listings that maybe haven’t moved as quickly as once hoped. Perhaps, the sellers have been “stuck” on a price or maybe the original list price was just too aggressive. What ever the case, if your listing has been on the market for longer than the average days on market for your area, it’s time to rethink your pricing.

TCG DOM Chart

There are thousands of shiny, new listings on the horizon. These listings are going to compete directly with your older listings. Many of the buyers currently in the market are anxiously waiting to see these new listings, even holding off pulling the trigger until they arrive.  Some of them are the same buyers that may have already seen and passed on your listing. The only way to get their attention again is to make a calculated change to your pricing and marketing strategy.

When looking to make a pricing change consider these points…

Be honest…with yourself and your client. If the pricing of the house was off from the beginning, admit it and start fixing the problem.
Be realistic…sometimes real change hurts. Adjusting the price by a couple hundred dollars just to have the listing show up on the hotsheet probably isn’t going to do it. Real change will involve careful thought and meaningful action.
Be in the market, not just on the market. If your listing is priced higher than the immediate competition, it will be passed over. Look at it this way, why would an informed buyer purchase your listing when they can get a very similar home down the street for less? The answer is “they won’t.”
Be willing to seek help. We all like to be the real estate expert. We all like to think we have our finger on the pulse of the market and our pricing is spot on. Well, this goes back to point one. Be honest with yourself…sometimes we need help or a fresh set of eyes to look at the situation. Be willing to get help from another agent, your broker or a real estate appraiser.
Be willing to walk away. Sometimes cutting ties is best for all involved. Maybe your Seller is unwilling to budge on the price or “has to get” a certain number. This is where you have to make a sound business decision. Are you able to help your client to the best of your ability in a situation like this? If not, it’s probably time to step away and direct your talent, effort and energy elsewhere.

The 2016 Spring Selling Season is poised to be pretty significant. Low inventory, low rates and pent up buyer anticipation are going to add up to a hot market. Hopefully, you and your clients can take full advantage of it with adjustments to the pricing of your older inventory.

If we can be of assistance to anyone considering making some changes please feel free to contact our office. We are always helping agents and their clients with Pre-listing and Market Value Appraisals as well as Home Measuring Services.

The Coyle Group’s team of Philadelphia appraisers are a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing. 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
* Data obtained from TReND MLS. Average Days on Market measured from February 1, 2015 thru February 22, 2016.

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Appraisers Helping Philadelphia Realtors

AppraiserHelpingPhiladelphiaRealtors - Cover Page

Hi Everyone.  Thank you for all your support of the Philly Appraisal Blog over the past couple of years.  In an effort to take the Appraiser/Realtor interaction to the next level I’ve created the Appraisers Helping Philadelphia Realtors Facebook group!!

The group was created to be “THE” go-to source of help and information for realtors in the Greater Philadelphia region looking for answers to their appraisal questions, to stay at the forefront of appraisal issues that are affecting the real estate industry and to bridge the gap of misinformation that often exists between realtors and appraisers in Philadelphia’s ever changing marketplace.

As part of this group, we have assembled a network of “THE” top appraisers locally and nationwide whose focus is on helping Philadelphia Realtors. You’ll notice that some of the leading real estate professionals in the Philadelphia area are also members, including the top agents, brokers and mortgage professionals. All are here to share ideas, provide information and help realtors and their clients in making informed real estate decisions and provide solutions to your valuation questions.

From time to time we will spotlight members of the group so that you can hear their story, learn from their experiences and network with your peers.

We will also be posting PDF files that may be helpful on topics such as “FHA Repairs”, “How to Contest a Low Appraisal” and “How to Calculate the GLA of a House.” So, be sure to check the “File” button under the cover photo.

Please accept this invitation to join the Appraisers Helping Philadelphia Realtors FB Group by clicking on the link or image above.  You are encouraged to introduce yourself to the group, get involved, share your stories and ask questions. Also, please feel free to tell other Philadelphia real estate agents and brokers about the group.

Get involved, ask questions, share your experience and add value!

Thanks!

Mike

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Tax Appeal Deadline Approaching!!!

The Coyle Goup - Tax Appeal - Philadelphia AppraisersHey, I know it’s kind of last-minute but, if you or your clients live in Montgomery, Bucks, Chester or Delaware County you have until the end of business August 1, 2015 to file the paperwork for your tax assessment appeal.  If you live in the City of Philadelphia you have until Monday, October 5, 2015 to file your appeal.  This is a great way to reduce your tax burden.  It typically involves filing the necessary paperwork with the county assessors office along with a fee.  You should check with your county assessors office to find out what the exact fee may be.

After that, if you live in the Counties, you will receive a hearing date at which time you will be able to plead your case in front of the Board of Assessment (please note that Philadelphia works a little differently, go figure).  You will want to take with you any evidence, photos or data that would demonstrate that your property is over-assessed (MLS Sheets will usually not cut it) .  The most effective way to illustrate your case to the board is with a current appraisal of your property showing that the value is less that implied assessment value and they you deserve relief.  Now, some folks represent themselves at the hearing, others hire attorneys to handle their case.  Either way the burden of proof is on the property owner.

Real Estate Agents: this is a great way for you to reconnect with past clients by offering them professional assistance without trying to sell.  Imagine how happy our past client would be if you were able to help them save hundreds or thousands of dollars off their tax bills each year!

If you have any questions or if we can help you or your clients determine if an appeal is reasonable, feel free to contact our office before the deadline.  We can also help you with an appraisal of the property prior to the hearing.  Good luck!!

The Coyle Group’s team of Philadelphia appraisers are a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing. 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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Zillow vs Appraiser Part IV

Zillow vs The Coyle Group, Part IV

It’s been a pretty busy 2015 and I really haven’t had much time to blog. However, this is probably my favorite post to write each year. Since 2011, we’ve had a little contest between Zillow and The Coyle Group (see prior years). We randomly select a number of appraisals recently completed by our office and see how our appraisal values match up against Zillow’s Zestimates. This year we chose 16 properties across Philadelphia, Montgomery County, Bucks County, Delaware County and Chester County. Housing styles ranged from Roxborough rows to Center City condos flats to Main Line mansions.

Below is a chart of the results. The first column shows where the property is located, the second The Coyle Group’s appraised value and the third Zillow’s Zestimate. The last column shows how high or low Zillow was relative to our appraised values.

The Coyle Group - Zillow 2015

Once again, the results are pretty astonishing. Now, Zillow was pretty accurate on the Ambler Golf Community home; and the Merion Station Tudor was right on target. I’ll even concede that the Center City Condo was in range as well.  But when Zillow is off, it tends to be way off! For instance, with the Parkwood Row in Northeast Philly, Zillow understated the value by 34.62%. That’s a big miss considering how “data rich” the Northeast is. Also, it just so happens that this property is currently active for $190,000.  Zillow missed that little fact.  This is where having a human being analyze the market data is so important.

Another interesting example is the Wyndmoor Colonial. This property was over valued by more than 22%.  You see, what Zillow didn’t know was that this property was in original condition.  Original kitchen, baths, fixtures, shag carpeting, wallpaper, etc.  It was like stepping back into the 1960’s.  Again, this is where having a certified appraiser physically inspect the property really matters. Algorithms don’t differentiate between “Brady Bunch chic” and a knocked-out kitchen with granite and high-end stainless appliances.

It just so happened that only four of the sample properties were under stated by Zillow.   Granted, is a very small sample but, on average the Zestimates were under the appraised value by 22.98%. This is important to consider. If you are a homeowner selling your property and relied on a Zestimate to price your home, you could potentially under-price your house and leave some serious money on the table.

The other twelve value samples are all over-stated by an average of 8.83%. As a seller, if you over price your home in a competitive market, buyers will pass you by in favor of more competitively priced homes. Eventually, you’ll probably have to lower your price and run the risk of losing buyers that may have otherwise been very interested in your home.

Philadelphia and the surrounding markets are so nuanced that computers and algorithms can’t accurately take into account all of the individual market factors. For instance, things like specific location can’t be accounted for by Zillow. If your home is next to a garbage dump Zillow will look at it the same as if it were next to a park. As pointed out above, Zillow also has trouble factoring condition and updates into their Zestimates, as well. As of right now, there is no technology that beats having a knowledgeable appraiser to determine an accurate value on a property. Granted, the technology is getting better, quickly but it’s still not as reliable.

Don’t get me wrong, Zillow has it’s place. It’s great for gathering information on neighborhoods and general market trends. It’s comparative tools and graphs are very useful.  Zillow is a good place to start.  However, in the end, Zillow’s Zestimates are not appraisals at all and should not be relied on as such. If you need assistance in pricing a property, I suggest getting some input from a from a good local agent or a certified appraiser and passing on Zillow.
The Coyle Group’s team of Philadelphia appraisers are a leading provider of appraisals for Estate/Probate, Divorce, Bankruptcy, Tax Appeal and Pre-Listing. 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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Are Tankless Water Heaters Money Down the Drain?

Like most homeowners, you’re probably looking for ways to both save money and increase the value of your home. You may be surprised to learn that one of the most efficient ways to accomplish both is to install a tankless water heater in your home.

Philadelphia AppraiserA tankless water heater functions differently than a traditional water heater but you most likely couldn’t tell the difference when using it. A traditional water heater pulls water in and then stores it in a tank for future use while a tankless water heater immediately heats the water as it pulls it in and does not store water in a tank, hence the name.

Tankless water heaters operate much more efficiently and are able to provide hot water almost instantly. And the best part is, you never have to worry about running out of hot water as is the case with traditional water heaters because tank-less water heaters heat the water as they bring it in providing you with virtually an unlimited supply of hot water.

A tank-less water heater typically improves the value of your home because it drastically cuts your energy costs. Not only are tank-less water heaters more efficient and environmentally friendly but they’re also safer than traditional water heaters since you don’t have to worry about water leaks causing extensive damage to your home. Like other improvements designed at driving down energy costs on your monthly bills, a tank-less water heater can improve the value of your home because it makes your home more efficient for future buyers.

Often times you can expect your energy bills to be cut in half by the use of one of these systems and as a result, they also have the potential to drive up the re-sale value of your home often by several thousand dollars. They’re one of the most effective ways to cut energy costs while you live in your home and they also allow you to make additional money when you decide to sell. Finally, they also provide you and your family the ability to work with and enjoy using a far more efficient system.

I hope you found this helpful and if you have any additional questions, thoughts, or comments please leave them down below.

The Coyle Group, LLC is one of the most well-respected and sought after appraisal firms in the greater Philadelphia area specializing in residential and commercial appraisals for divorce, bankruptcy, estate, date of death, tax appeals, pre-listings, and more. For more info contact us at 215-836-5500, http://www.thecoylegroupllc.com, or email us at appraisals@coyleappraisals.com.

 

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Don’t Trust Your Divorce Appraisal To Just Any Appraiser

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Is a BPO the Same as a Professional Appraisal?

BPO’s, otherwise known as ‘broker price opinions’ are often used by lending institutions to obtain the current market value of distressed properties including short sales and foreclosures. In addition, brokers and realtors often use BPO’s to help justify a suggested list price for those looking to sell their home.

The Coyle Group - BPOBPO appraisals are NOT completed by professional real estate appraisers and instead, are usually completed by real estate brokers and are far less detailed than that of a professional appraisal completed by a professional real estate appraiser.

Depending on the type of information required, brokers may provide either a drive-by or internal BPO. Drive-by BPO’s are often used for properties that have gone into foreclosure as they allow brokers to gather enough information without having to contact or dialogue with the foreclosed property owners.

Internal BPO’s require more detailed information on the property which can only be obtained by gaining interior access to the property. Internal BPO’s are often used for homeowners involved in a mortgage refinance, loan modification, or short sale.

During an internal inspection brokers gather information about a property’s interior and exterior condition allowing them to more accurately report gross living area, condition of the ceiling, walls, flooring, mechanical systems, countertops, sinks, tubs, fencing, roofing, siding, swimming pools, and more.

Both internal and drive-by BPO reports include year built, lot size, gross living area, number of rooms, property condition, information pertaining to the immediate neighborhood, and often additional information regarding the number of homes listed for sale or rent in the area.

BPO’s and their subsequent property value assessments often require listing the total number of foreclosure properties within a 5-mile radius because when a high number of foreclosed homes are present, most often property values of all homes in the area decline.

In short sale situations, accurate BPO appraisals have often been known to reduce principal loan balances by as much as 15-25%. While this amount is substantial for mortgage lenders it’s still more cost-effective than going through the process of foreclosure.

One important note is that the ‘The Dodd-Frank Wall Street Reform & Consumer Protection Act’ prohibits BPO appraisals from being used as the primary basis for determining property value when real estate is used as collateral to secure the loan. So in any situation, it is always best to consult with an attorney or real estate broker to ensure a BPO is legal and acceptable in your case, as your situation may require a more detailed appraisal performed by a professional state certified real estate appraiser.

I hope you found this helpful and if you have any additional questions, thoughts, or comments please leave them down below.

The Coyle Group, LLC is one of the most well-respected and sought after appraisal firms in the greater Philadelphia area specializing in residential and commercial appraisals for divorce, bankruptcy, estate, date of death, tax appeals, pre-listings, and more. For more info contact us at 215-836-5500, http://www.thecoylegroupllc.com, or email us at appraisals@coyleappraisals.com.

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