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Appraisal Articles is an Internet website dedicated to providing free information in the form of articles on appraisal and real property / real estate topics to appraisers and the public.  Authors are invited to contact us and submit related original articles for approval. 

Using Appraisals for Speculative Acquisitions

by Administrator on Feb 9, 2016 Investing 3 Views

How do you know that the property that you are considering or that you have in escrow is a good deal? If you are an active investor in the real property market and you have considerable experience, especially if you are working with your own funds, maybe you don't want or need an appraiser’s opinion. There are a group of investors who have decided that they will sink or swim based on their own decision-making. You can’t fault these investors they don’t need an appraisal before they make a purchasing decision but they generally end up dealing with an appraisal when they try to get their deals funded.

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Why the Income Approach is so Important in Multi-Family Appraisals

by Administrator on Feb 9, 2016 Multi-Family / Apartment 7 Views

While the sales approach often provides a reliable indication of market value for multi-family properties, often focused on a price per apartment unit of comparison basis, appraisers often favor the income approach. Why? Because multiple family properties are usually bought and sold by investors who expect a market return on their investment. Who invests $ 1,000,000 in a 20-unit building and doesn’t expect to receive a market return on their money? Investment returns in the market change over time and of course for any specific property they are based on risk.

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Real Estate Appraisal Issues 2016

by Administrator on Feb 9, 2016 Appraiser Education 12 Views

Which appraisal “issues” are important has a lot to do with perspective. If you ask real estate agents, they will tell you resoundingly that the biggest appraisal problem is that their appraisal reports conclude values that are not high enough. Agents argue that appraisers don’t consider the most recent sales so appraised values come in too low and disrupt their market negotiated sales. The central theme of the agent argument is that appraisers cannot be right if they haven’t validated their deal and called it market value. What real estate agent don’t consider is the fact that if left to their own devices real property prices would increase with every sale and quickly become out of control. We have been there and done that before and those booms have always ended badly. Appraisers have been forced into the role of gatekeeper by banks who prefer that appraisers draw the line in the sand since they have failed miserably when attempting to do it in the past.

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Can Home Values Dramatically Increase in a 2016?

by Administrator on Feb 8, 2016 Market Conditions Articles 7 Views

Of course they can given the right circumstances, but as some homeowners discovered in the Las Vegas area boom in 2007 if your home increases in value by 100% it's difficult to take advantage of the increase because the entire market has likely increased by a similar amount. So unless you are moving to another area your gain is a relative one. It's not difficult to imagine a situation where you find that your home value increases by 20% or more but the overall market also increased by 20% or more and if you sell it to move up, to buyer a better or larger home, you will have more money in your pocket but you may be farther from the amount that you needed as a down payment for the upgrade and farther from the income requirements to qualify for the new loan.

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Movement Toward a 10 Page Mini-Narrative

by Administrator on Jan 28, 2016 Business Operation 33 Views

In my area appraisal fees have fallen over the past several years and the average number of pages in most narrative reports have correspondingly fallen. It appears to me that a dramatic shift is taking place in the appraisal business one that will change it for some time to come. It's not the kind of change that many in the business will be comfortable with. Commercial appraisal reports used to average 120 to 150 pages (or more), having said that I guess that you can tell that I have been in the business for quite a while. Appraisal reports all used to contain information on the physical, social and economic factors affecting the market area and more than a one page summary discussing subject property characteristics. Many appraisers started with a description of the state, the county and then the city in which the subject property was located. Then they went on to describe the market area including the immediate neighborhood.

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