here is no doubt that the things that we consume/buy such as gas, food,
homes, etc fluctuate constantly. What are the driving forces behind them? How does it all connect with appraising?
all about math and calculations. Every single thing that we purchase has a price that is set by supply and demand, quality, cost to make among other things. And each company has to calculate this information alongside what their hard/soft costs for the company
to determine their pricing. This plays exactly into what we need to do as appraisers so that we can afford the costs of the job and still bring back money for our families.
are hard and soft costs? Hard costs are the things that are always there and never really change (they follow the typical increases but you can plan these out). Think about your office rental, payroll, MLS/AMC Fees and other bills. The soft costs are harder
to plan for, they are your gas (to and from the inspection sites), taxes, paper and ink fees, etc. It’s easiest if you go back and look over 3-4 months of costs to get an idea of what your costs are. It can be in depth and take some time but it is honestly
worth it, especially if you are new to the business.
also smart to think about the competition. You don’t want to be the lowest quote but you typically don’t want to be the highest either. Most people will look for someone in the middle because the saying “you get what you pay for” is so true! You just don’t
want to outbid yourself.
you add these together you can begin to piece together, which won’t happen overnight, a pricing for your appraisals that will get things paid and also allow you to bring home a check. Obviously, over time you will be able to have more wiggle room in your pricing
because you will have the time and work to show that you know your stuff! You may be surprised how much a $10 - $25 increase can help you out in the long run and when you have proven your worth your customers will be willing to pay the money.
Appraising is a business that includes busy times as well as slower times and it’s always a good idea to have a back up list of “to do’s” for the
times when there is a lull in the work coming in. Especially when you have employees working underneath you that are there to help out. You are paying them, usually hourly, and you want to get something out of that.
list doesn’t have to be incredibly specific but should give an outline of the most important things to work on and then it can trickle down to the less important stuff that usually won’t get touched by most, if any of your employees, because every slow down
picks back up.
Here are a few things we do around the office when things slow down for
Checking the accounting and following up on any overdue payments
Updating E&O, coverage, upcoming vacation times and other information with AMC’s
Update email templates
Update social media
Delete/Organize files that are no longer used
Clean office area and desks
Check in with other blogs to see what peers are saying
Anything that can help things move smoother when the appraisals start rolling in and allow your employees to be an asset to the company are always
worth adding to the list. What are some of your back up list items?
While this answer might surprise you it’s not a simple yes - it’s more of an "if you are lucky".
Pools are great, we all have a moment in the heart of summer when we really wish we could walk out our back door and jump directly into a pool. The heat gets to us and we would give anything for a pool. BUT - you have to take time to think about the whole
picture and not just that sparkling cool water you want to jump into.
If you have the right situation you can make upwards of 7% more with a
pool included in your home. Here are some of the ways the pool could actually make your home more valuable.
You live in a neighborhood that is higher end and most homes also have swimming pools
The style of the pool fits with your home and neighborhood
The pool does not take up your whole yard, leaving room for other things such as swing sets or room for other
The pool has been kept up nicely and looks new
You live in a climate where it can be used year round (looking at your florida, Hawaii and even places like
Arizona and California to name a few)
It’s been customized to also be an enclosed pool (just to piggyback off of the last one reason)
You have buyers who want a pool
Outside of what it will add to the home, you have to think of the money
you will spend to get the pool there and then what the upkeep is. For the pool to be installed you could be looking at anything from $25,000 - $35,000+ for the install. Then you have monthly expenses such as chemicals (which could range up to $100+) a month
and seasonal expenses such as opening and shutting the pool. If you have someone coming out to open and close the pool it can cost $500+ each visit.
Overall the cost of the pool probably won’t be paid back in a monetary
way, especially if you add up the monthly and seasonal costs and add it all in. The important thing to think of though, is that it adds value to your life and family if it is something you truly want. So if it’s important to you and you believe it adds depth
to your life and the memories you can make in the home we say - DO IT!!
The hope when selling a home, at least most of the time, is that you come out making money instead of losing money. Knowing the numbers and having
information about the cost of selling a home can help you make more at the end of the deal. Mostly, it’s about being prepared for the costs. The average cost of selling a home is about 15% of the total sale of the home. This means that if you sell your home
for $200,000 you will be paying right around $30,000 for the sale.
Typically the largest percentage is going to go to your realtor. It is typically about 6% of the sale price. Your realtor will not only bring the
smarts to the selling table, but they also help you figure out the best plan to sell your home. Their entire job revolves around figuring out the best ways to stage the home, how to market the home and the best way to get your home sold as quickly as possible.
Home improvements or repairs can be expensive as well. On average 70%+ sellers will do some type of repair on the home before selling and 3 repairs
is the norm for sellers. These repairs can be anything from landscaping to updating a kitchen or even replacing the carpets. You can try to keep up with these repairs over the years if your home is older and if you are selling a relatively new home you may
get lucky and not need to do any repairs.
Home inspections are incredibly important for both the seller and the buyer. Home inspections take a look at HVAC, plumbing, electrical systems
as well as the roof and foundation. Having an inspection allows the seller to make sure they aren’t buying a home that will suck more money out of their pockets and it helps keep the selling timeline on track for the sellers. It’s a safety net for both sides.
Home staging is one way to make the home look more welcoming to an array of people instead of a home that is currently being lived in. It can be
difficult for people to see their family moving in when a home is cluttered with another families' things. This may be covered in part or fully by your realtor if it is part of their marketing services.
According to a study done by Realtor.com a seller will cover 1-3% of the closing costs on the home. Closing costs typically include taxes, an attorney,
title transfer and insurance companies. Sellers will agree to pay part of these costs in order to “sweeten the deal” for the buyers.
There are two things that a lot of people tend to forget and those are moving out and your remaining mortgage. Moving can be more or less expensive
depending on how much work you want to do. If you do it on your own with a few friends it will cost you a rental truck and a few pizzas and drinks or you can allow others to do it and you can hire a moving company. Your remaining mortgage amount will be paid
by whatever you make on the home. You are left with whatever hasn’t gone to the things listed above.
If you are in a spot where you will not be able to make more than what is left on the mortgage you do not want to sell unless it is absolutely necessary.
You can wait it out and use the time while the market isn’t great and do small upgrades on the home to make it an easier sell when things turn around.
External obsolescence is a factor that reduces the value of an improvement because of something external to the property itself. It refers to something outside of the home that is causing a lower property value.
Here are five examples of external obsolescence:
1. Busy Road: This is a very common example of external obsolescence because we can see it in virtually every community to some extent. Homes on busy corners, on main streets or near freeways suffer from extra
noise and traffic, both of which impact property values.
2. Commercial buildings: Residential and commercial uses tend to not mix well in suburban areas. It's usually a negative factor when houses are located next to restaurants, retail, gas stations, etc.
3. Construction of a landfill next to a neighborhood: This can impact the entire neighborhood (not just one house) due to the smell or even the noise of large garbage trucks moving in and out.
4. Railroad tracks: Properties located near railroad tracks will suffer a hit when it comes to home values due to the noise factor. Same goes for properties close to an airport and airplanes' flight paths.
5. High-Voltage Towers: A view of nearby power towers usually results in a hit to property value.