Green Real Estate Appraiser

Study: Homeowners overestimate the value of their property by 8%

Posted on June 1, 2015 | Leave a comment

Do you know what your house is worth?

Would you concede that there’s a chance that your estimate of its value might be higher than what a buyer would pay?

Contact the appraisers at www.scappraisals.com for your value questions.

A new statistical study, published in the Journal of Housing Economics, found that home owners on average “overestimate the value of their properties by about 8 percent.”

Tapping into federal databases, researchers concluded that overvaluations are likely tied to erroneous owner estimations of the capital gains they’ve accumulated in the house.

The study is in sync with a monthly survey conducted by Quicken Loans, which compares estimates provided by applicants for refinancings with results from appraisers. The latest Quicken study found a “widening gap” on average across the country between what owners think their homes are worth and actual market value. The divergence was much narrower in the Quicken survey compared with the Journal of Housing Economics findings —currently just seven-tenths of 1 percent — though in 2008 it averaged around 7.5 percent.

Nobody can blame owners for thinking optimistically about their homes’ value, right? It’s human nature. But here’s a question I recently put to real estate appraisers in different parts of the country: Other than the obvious emotional attachments that color our perceptions of our homes, where do we tend to err when it comes to estimating value?

Top of the list: Unrealistic expectations about how much the improvements you’ve made to the house will add to its resale value.

Bottom line: Without access to key data — recent sales comparables, accurate information on appreciation rates over time — it’s tough to know exactly what your house is worth. If you really want to know, consider hiring an appraiser to perform an independent valuation — they work for owners, not just lenders — or talk to multiple realty agents who specialize in your neighborhood

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HOA Super lien pose perils for home buyers

Posted on June 1, 2015 | Leave a comment

Could some of the nearly 67 million Americans who live in communities governed by homeowner associations — condominiums, master-planned developments, cooperatives and others — face much tougher underwriting and higher interest rates when they apply for a mortgage?

That is the looming threat from the mortgage industry in areas where state laws give community associations “super-priority” liens on dwellings whose owners have not paid their assessments.

Super-priority liens give a community association the power to initiate foreclosures and get first crack at the proceeds from the sale of a delinquent dwelling unit, ahead of the traditional first-lien position held by the mortgage lender. Twenty-two states plus the District of Columbia currently have authority for super liens on their books, and all 50 states recognize homeowner association liens.

Homeowner associations argue that, like property taxes for local governments, assessments or dues on units fund the essential operations of the community. They are crucial to maintain the community’s buildings, roadways, parks, recreation centers and other amenities. When unit owners fail to make the payments, the shortfall must be made up by the rest of the owners, often through higher assessments.

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Home Sellers Market; Tight Supply and Low Mortgage Rates Causing Bidding Wars

Posted on May 30, 2015 | Leave a comment

Bidding wars have broken out in hot real-estate markets like Denver and Los Angeles, where there aren’t enough houses to meet demand. The lack of supply is a key reason home sales nationwide have yet to return to healthy levels following the housing collapse in 2008.

“Inventory is still fairly low in a lot of markets across the country,” said Skylar Olsen, senior economist at real estate data firm Zillow. “Buyers are not going to have the easiest time out there.”

Further tilting the market in favor of sellers are low mortgage rates, which have ratcheted up pressure on buyers to wrap up deals before borrowing becomes more expensive.

Then there’s the matter of price. While the overall rise in home prices has slowed this year, fierce competition in many cities and markets will make the cost of buying much harder this spring. Prices are peaking or coming close in roughly half the country. Seven states set highs in March, including Colorado, New York, Tennessee and Texas, according to real estate data provider CoreLogic.

Disclaimer: for information and entertainment purposes only

Study: Homeowners overestimate the value of their property by 8%

HOA Super lien pose perils for home buyers

Home Sellers Market; Tight Supply and Low Mortgage Rates Causing Bidding Wars

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