Month: March 2014

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Appraisal Myths and Realities consumers should be aware of

Appraisal Myths and Realities

The following are Appraisal Myths and Realities consumers should be aware of.

Myth #1:  The homeowner pays for the appraisal and therefore, owns the appraisal.

Reality:  If federal money is involved in the transaction – Fannie Mae, Freddie Mac, HUD, VA, or other programs, – then by federal banking regulations, the lender must be the client of the appraiser.  The entity that orders the appraisal is the client, not the person delivering the appraisal fee for the client.

Myth #2:  If a homeowner has an appraisal done with one lender, they should be able to use the same appraisal report with a different lender.

Reality:  Other lenders cannot use the report for lending purposes until they establish the client/appraiser relationship.  The appraiser will need to get permission (a release) from the original client and any/all subsequent clients before reappraising the property for the new lender.  In addition, if the effective date of the appraisal has changed, the appraiser must research any new market conditions and update the existing appraisal report, which could mean drafting an entirely new appraisal.

Myth #3:  The homeowner put $10,000 in improvements into the home so the appraisal should be at least $10,000 higher.

Reality:  Example: If you could buy a box of Tide for $100 or buy a box of Tide for $10, which would you buy?  This is the same logic that can be applied in the marketplace.  When two homes in the same neighborhood are for sale and one under duress is selling for considerably less, the home that is listed higher is now overpriced for the market.  Once the house under duress sells at the lower price, the now becomes the market value for competing homes in the area.  Remember, appraisers use the principle of substitution by determining what other homes in the market area can be purchased for the same price.

Myth #4:  The licensing of an appraiser ensures his or her competency.

Reality:  Licensing does not necessarily ensure the competency of an appraiser.  The Fannie Mar and Freddie Mac Selling Guides require lenders to review the appraiser’s education and experience.

Myth #5:  Communication between an appraiser and a real estate agent is prohibited.

Realty:  Absolutely not.  The appraiser cannot talk about value of the property.  However, they can obtain factual information about the property from the real estate agent.

 

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Are we heading toward an era of small brokerages in San Antonio?

are we heading toward an era of small brokeragesAre we heading toward an era of small brokerages in San Antonio?  Just recently the 2014 Swanepoel TRENDS Report noted that there is a trend moving away from the small mom and pop real estate brokerages and more agents are working for the large real estate firms across the country.  However, the New York Times posted an article on “The Ascent of the Little Guys” stating that the credibility of the smaller firms are growing in popularity due to the attention to agent training, customer service, and low agent-to-manager ratios.

While large real estate brokerages with thousands of agents still dominate the market, I can’t help but wonder whether the clout of the smaller firms is a question buyers and sellers should consider when choosing a real estate agent.  As consumers decide between a highly visible company with lots of agents and resources, they should also consider the idea of a smaller firm that caters to a niche market and to the client’s needs.  For example, downtown living, condo specialists, luxury lifestyles, etc.  In addition, smaller brokerages in San Antonio are more creative and nimble.  They can be more responsive and customer service oriented in a changing market.

“One of the main things that any small business — whether an independent bookstore, a corner toy store or a neighborhood hardware store — would have customers believe is that service is better and personal attention greater at a little firm. Whether that is true in real estate depends — because the company name may be ubiquitous, but the client’s relationship is usually with a single person.” –HILARY STOUT, New York Times

The owners of Texas Dream REALTORS do not hire any agent looking for a place to hang their license.  We have a small professional team that services our clients for sales, staging, photography, contract to close, listing management, marketing, quality control, make ready services, and technology.  We know that you are busy, work hard, fight traffic, and have a life.  Therefore, we come to you and proudly have a paperless company that makes our agents accessible and your transaction smooth and successful.