Appraisal Scoop

Video - Learn the "Story" Behind the Chinese Drywall Issue

Dr. David Krause discussing issues related to imported drywall found throughout structures in Florida

Dr. David Krause from DOH Content on Vimeo.

Who’s Measuring America? - Creating a Measurement Standard

Most real estate professionals (and homeowners) perceive real estate values based on a simple philosophy; price per square foot. The two amounts which provide this powerful number are the sales price and the size of a home. The sales price is a fact recorded at the county courthouse. The size or square footage is a number which has been taken for granted for so long, no one really thinks about where it comes from. The current trend (by real estate professionals, homeowners, insurance companies, and especially AVM’s) is to use the square footage information recorded in public records.

The property assessor uses a mass appraisal process and in most states never enters the dwelling. The errors in square footage should alarm us all. 50, 200, 500, many over 1,500 square feet, and mistakes are more often the rule, rather than the exception. Measuring and calculating square footage from the outside of a home is virtually impossible. The county assessor’s department is creating an estimate of size, for assessment purposes only. That information was never meant to be used as a detailed source of square footage. County officials have no liability (to homeowners or the real estate industry) in reporting square footage details and they don’t have to worry about errors and omissions.

The real estate industry is simply taking information, meant for use within the assessor’s department only, and trying to force that data to work in the real estate information system. Property values are being determined based on information which is wrong more often than it is right.

Automated Valuation Reports (computer generated value systems) base their values on some formula, which includes the square footage of the home. Any “value” conclusion based on faulty data can only provide unreliable results. Use of these inexpensive value services are gaining momentum among lenders, often due to the quality of the profits, not the quality of the product. Many consumers are now being forced to pay for an Internet based report as well as a traditional appraisal.

The Realtor® organization was founded (and grew to prominence), being the providers of real estate data. Known as providers of “the most trusted source of real estate information in the world,” agents have fallen prey to the easily accessible, free, and without personal liability, public record system. So, does this mean that public records are now the providers of the most trusted source of real estate information? Over the past five years, the use of public records within the real estate industry has skyrocketed. During the same time period a real estate crisis continues to grow.

After years of investigation, I believe there are two things which must happen to get the real estate industry back on tract. First, Realtors® must measure houses. This seemingly simple number, controls real estate loans and values across the country. Public records were never meant to be used for this purpose and cannot accurately provide this vital data. The second step is one that real estate professionals have been unable to agree on for over a century . . .

Click here to continue reading . . .

Video: Lighthearted look at "misleading" property descriptions

Need a little break on a Friday?  Take a couple of minutes to watch this short video of a property inspection and how it MIGHT be described in a sale flyer or inflated appraisal report.  Thanks to Steve Smith, MAI for sending me this video!   Download FixerUpperVideo.wmv

NPR Radio Takes Us On An REO Walk-Through With Appraiser Mike Timoni

NPR's All Things Considered, radio interviewer says Mike Timoni has an almost recession-proof job. He appraises home prices in New Jersey — and in today's volatile market, his assessments are very important. He gets a lot of calls these days to appraise foreclosures before they are auctioned.  Timoni says that despite the market downturn, his job is as busy as ever.

Listen as he warns his interviewer: "Careful kiddo . . .Just stay close to me".  "Can you see?"  NO!  "This is the scariest part for me . . .in the Wintertime . . because the squatters get in these buildings". 

Click here to here the complete interview

Click here to here the complete interview

Thanks to Ann O'Rourke, MAI, SRA, Appraiser and Publisher of Appraisal Today newsletter, 2015 Clement Ave., Alameda, CA 94501 - mailto:ann@appraisaltoday.com  - http://www.appraisaltoday.com -  Subscribe to her free newsletter:   Send a blank message to:

mailto:join-appraisal_today_enews@titan.sparklist.com

Humor - Why would I want a Home Inspection?!

As appraisers, we run into a LOT of funny stuff, but can anything compare to what our "brothers" the Home Inspectors run into?   An appraiser friend of mine sent me a Powerpoint show that was compiled from a series of Home Inspection Nightmares on the This Old House web site : Download ThisOldHouse.pps (1167.5K)   

Below are just a couple  of examples! (click image to enlarge)

Details, details
Photo: Lon Grossman, Technihouse Inspections, Inc.

Flashing—who needs flashing?!

Another automotive heating system - Photo: Scott Sharp, Guardian Home Inspections LLC   You're looking at some fine Ozark engineering. Yes, that is an automotive radiator attached to floor joists with hot water piped to it. All the pipes and the wood-burning boiler were constructed of recycled components from who knows what. And this is only what I could see. The system never did function to their satisfaction. I wonder why?

Download ThisOldHouse.pps (1167.5K)

• Home Inspection Nightmares I
• Home Inspection Nightmares II
• Home Inspection Nightmares III

Swimming Pool Maintenance Takes Time & Money

Scott Hubbard of Homewerx, Inc, a family-owned Home Inspection firm, recently posted some great information about swimming pools to their company blog.  With Scott's permission I'm re-blogging his complete article here.  To read the article from his site - click here.

Also Read: Swimming Pools: Do They Increase or Decrease a Home's Value?

Even in Arizona, you may not use a swimming pool very much in the winter time.  But if you're considering adding a pool to your home, winter is the slow season for Arizona swimming pool companies and therefore, you may be able to negotiate a better price on a new pool.  Whether you add a pool to your existing home or buy a house that already has a pool, below is some information to consider about swimming pool maintenance.

Maintaining a swimming pool takes time and money.  Pools consist of many systems; the structure itself, as well as electrical, plumbing & mechanical systems.  So there's alot to maintain including pumps, filters, lights, valves, sometimes a heater and other features.  Each pool is different, therefore the exact cost of maintaining your pool will depend on many factors such as the pool's age, surface area, type of finish, water capacity, type of pump & cleaning system, etc.

STRUCTURE & FINISH: The pool's structure will usually last many years provided that it's built right and the finish is properly maintained.  The pool's finish may be plaster, pebble-tec or fiberglass.  All three types will require regular brushing, cleaning and chemicals.  Algae is a bigger concern with a plaster finish.  This is because algae can actually etch the plaster finish, or pit the surface and make it rough.  Also, the type of pool matters...a diving pool usually holds a lot more water than a play pool, and therefore it will probably cost more to maintain.

COST OF CHEMICALS, ETC. : Properly maintaining the chemical balance of the water is important.  If you aren't sure what to add, you can take a sample of your pool water to the local swimming pool supply store for help.  They will test it and tell you what chemicals you need and how much to add.  Pool water generally requires more chemical maintenance when the weather gets hotter and the pool is used more frequently.

For a pool that does NOT have a chlorinating or soft water system, you'll have to buy chlorine, acid and other chemicals.  The chlorine is by far the most expensive of these chemicals, which will probably cost $200 or more per year (depending on the size of the pool, the amount of water it holds, etc.).

If the pool does have a chlorinating or soft water system, you won't need to buy the chlorine but you'll need to buy salt and other chemicals.  Also, this type of system is more complex and requires more maintenance.

Click below to continue reading . . .

NAHB Study Sheds New Light on Life Expectancy of Home Components

By any reckoning, a home is expected to last many years and serve several successive generations. But what about the individual components that comprise the house? How many years of service can a home owner reasonably expect from a roof or a door, a window or a whirlpool tub? 

A new NAHB study sponsored by Bank of America Home Equity takes some of the mystery out of the subject with the caveat that numerous factors, including use, maintenance, climate, advances in technology and simple consumer preferences can have a dramatic effect on product longevity.  Go to the study (pdf format).

Click below for a few of the highlights of the survey . . .

Take The ASHI Home Inspection Virtual Tour

Before a home inspector gives your home the once over, a virtual home inspection tour will give you a good idea where he'll go, what she'll look for and what you hope he or she doesn't find.

On the ASHI Virtual Tour you can click around the house to get inside the inspectors head. Click the little blue dots to poke into the components inspected, learn common problems found in each area and read the standards of practice employed in each area.

Click here for the full Realty News story: Take The ASHI Home Inspection Virtual Tour 

IL Carbon Monoxide Alarm Detector Act - Effective 1/1/2007

Beginning January 1, 2007, a new Illinois state law entitled "Carbon Monoxide Alarm Detector Act" goes into effect. The new law requires single family and multiple family residences, with few exceptions, to have at least one approved and operating carbon monoxide alarm within 15 feet of each bedroom.

Carbon monoxide is an odorless, colorless gas produced during incomplete combustion of fuels – for example, natural gas, LP gas, kerosene, oil, wood, and charcoal. The gas is lethal to humans if it builds up in the home.

The law states it is the responsibility of the owner of the structure to supply and install all required alarms, along with written instructions for alarm testing and maintenance. In the case of rental property, it is the responsibility of the tenant to test and to provide general maintenance of the alarm(s), including battery replacement, and to notify the owner of any defects in writing that the tenant cannot correct. 

Click below for additional information . . .

New Leica DISTO A8 with Digital Viewfinder and Tilt Sensor

LaserMeters.com has just announced the newest member to Leica's line of laser distance measuring devices.  According to their web site:

The digital viewfinder and the integrated tilt sensor make the Leica DISTO™ A8 an innovation worldwide and open up completely new possibilities. Comfortably find your target with the three-fold digital zoom made even easier with the blended in crosshairs. The brightness of the greyscales display can be manually adjusted; ideal for poorly contrasting targets! The tilt sensor does not only indicate angles, but also real horizontal distances and various indirect height measurements.

Click here to learn more.