The Lee County Property Appraiser will be mailing out the results of the final ad valorem property values this Friday, Aug. 22nd. While most of you won't be suprised at your taxes, some of you might not believe your eyes. You might be one of the "lucky" ones whose letter says that despite this market, your property value has increased and your taxes are going up. Care to appeal the valuation? You have less than 30 days.
Often, you can resolve matters like this with a phone call. But if you exhaust that option and decide to file an offical appeal on paper, a professional, independent, third-party appraiser is probably your best bet in proving your case.
We are here to assist you. We offer three levels of service, from a $49 Property Analysis to a $495 Full Representation Fee. Check out our website (www.capitalappraisals.com) for further details. I am just a phone call away, (239) 437-6545 if you have any questions. Thanks!
Jay Cabai, Capital Appraisal Services
Over the past few months we have been hearing the same five complaints time and time again. I thought today, I would share the complaints and our responses.
1) "I couldn't build the house for the amount it appraised for!" A: Yep, you are right. As a matter of fact, current market conditions in both Lehigh Acres and Cape Coral, indicate a 20% difference in the cost to build versus never lived in existing homes that have recently sold.
2) The County assessed value of my home is more than what is is currently worth? A: Yep, assessed values that are currently found on the property appraiser website are values assigned to the property as of January 1st, 2007! That's a year and half ago. Unfortunately property values in SWFL have decreased in since then. So, unless you have made major additions/improvements to your property since Jan. 2007, it is very possible that your home is worth less than the County Assessed Value.
3) The appraised value came in less than my last appraisal which was done just six months ago! A: Yep, values in all of SWFL have further decreased in the past six months. Unless your home is valued over $2 millon, we have seen further price declines in the past six months. Those with values in the $2million plus range have seen limited activity which may be indicating stabilization.
4) My neighbor's house, which is smaller, older and inferior to mine, is on the market with an asking price of $10,000 more than what you appraised my house for! A: What someone's asking price is can be completely different than what the market will actually pay. List prices are nothing but a starting point for negotiation in today's market. In a declining market such as this, very few properties sell for the actual list price.
5) The sale comparables that you compared my house with were bank owned sales, short sales or motivated sellers. That's not fair to compare my home with those. A: Unfortunately in many areas Bank Owned, short sales and/or motivated sales are the only sales occurring. Thus, those types of sales currently represent the market and in fact are a good representation of current market values.
If you have any other complaints, comments or questions I would love to hear them! Drop me an email at: email@example.com
I know you’ve heard me and others talking about the Home Valuation Protection Code to be adopted by Fannie Mae and Freddie Mac January 1, 2009. They’ve invited comments from any interested parties, and I’ve been mulling this over for weeks. For today’s blog, I’m simply going to review the Code as I read it and point out the major shortcomings. In my next blog I will tell you how I would solve them.
The purpose of the code is to make appraisers truly independent. It lays out a very specific plan for keeping the party ordering the appraisal at arms’ length from the appraiser himself. It also makes sure than anyone with any stake in the outcome of the appraisal has no say in who does it.
As proposed, these guidelines (though with honorable intent) will hurt the entire system, from appraisers, to mortgage professionals and ultimately home borrowers. First, it derails the entire existing system. While solving some of the transparency and independence issues, it does not eliminate them. Influencing an appraiser can still happen under the HVPC as it is currently written. As it stands now, the majority of appraisal orders will have to go through one of several AMC’s very similar to those accused of fraud in the past. Eliminating the good will and business relationships between honest appraisers and honest mortgage brokers/lenders does not eliminate the independence issues that the HVPC attempts to solve.
Secondly, dissolving the relationships between appraisers and lenders may help keep appraisers independent, but fewer quality appraisers will be available. The proposed system where appraisers take orders only through AMCs, will lead to the financial collapse of most current appraisers, who will find their fees cannibalized by the management companies (sometimes by as much as 60% of the fee goes to the AMC.) Utilizing less experienced, price cutting appraisers will lead to poor quality appraisal reports.
We all agree something needs to be done. Appraisals should be requested without coercion or threats and they should be performed by well trained, skilled and fairly compensated appraisers.
Here is my suggestion. Enforce the Existing Laws!
Next week—how to do it.
Taking a break from musing over the Valuation Code, I thought I’d address a question I’m asked frequently once people find out I’m an appraiser. Now I’ve been asked some rather strange ones, such as “can I count the mural of my wife in the nude as an improvement?” (that would depend on the buyer...and wife).
Here is a question some of you may have had during the course of business:
Q: “Does a room need to have a window and closet to be considered a bedroom? What does the Florida Law say on this?”
A: There isn't a law or concrete definition for a bedroom. A bedroom is typically defined as a room designated for sleeping. In today's modern market, a bedroom typically has a closet and window. The window is present as a second exit in case of fire. However, the prevailing local market tradition and conditions will be the final determining factor that defines a bedroom. For example, in the early 1900s most homes had very few closets. Bedrooms were typically small and allowed for a bed and an armoire or chest where clothes were stored. Those homes still exist today and most buyers recognize those rooms as bedrooms, even without a closet. Thus, if the market in your area recognizes a space without a window or closet as a bedroom, that would hold precedence over any text book definition. If you have any questions or comments feel free to email me at: firstname.lastname@example.org
Thanks for reading! ~J.
As much as the current mortgage crisis put a fire under Fannie Mae and Freddie Mac to tighten standards, it’s put stress on everyone involved with valuing homes and structuring loans. Cuomo’s Home Valuation Code of Conduct attempts to solve the problem of independent appraisals, but the fine tuning still needs serious attention. Appraisal Scoop, a blog on appraising, addresses some of the issues, if you’re interested in our side of the issue. But the 90-day comment period has been cut to 45 days! Our deadline for comments is now April 30.
Next week I’ll discuss my thoughts on this code and will encourage everyone to respond. Between now and then, if you have any ideas or comments, email me or fire your ideas directly to the review board. Until next week…
A story I’ve been following finally came to a close last week, and it’s got me thinking. Our industry is in store for an overhaul. No one is quite sure what it’s going to look like this time next year.
As some of you may know, New York Attorney General Andrew M. Cuomo laid out a plan last week to keep the current mortgage crisis from recurring. It is an agreement between his office and Fannie Mae and Freddie Mac; beginning January 1, 2009, the two largest purchasers of home loans will buy home mortgages only from those lenders who meet new standards. These standards are set in the Home Valuation Protection Code.
Under the new code, mortgage brokers will be prohibited from selecting appraisers and lenders prohibited from using "in-house" staff appraisers to conduct initial appraisals. In addition, a new Independent Valuation Protection Institute will be formed to insure these standards are followed.
Over the next 90 days, Cuomo’s office is accepting comments in an attempt to tweak this code so that its main purpose of insuring appraisal independence will not cause undue hardship or chaos. If you have a chance, I encourage you to read the new code and think about its implications, and send your comments to Cuomo if anything strikes you.
You can download it from the bottom of our website’s home page, or simply click on the following link:
With the movement and fluctuations in today's market, Capital Appraisal Services is working to keep our clients informed and connected to the latest in real estate information. As part of our efforts, we are launching a new blog on appraisal and real estate news. Our blog will offer a relaxed, personable view of real estate appraising and current market conditions. About once a week, we'll answer questions, discuss the latest trends and occasionally pass along a funny anecdote.
Check out our website, www.capitalappraisals.com, or give us a call if you have any questions. We are the appraisers you can depend on with great service, solid reports and competitive rates. We look forward to hearing from you!
J.R. (Jay) Cabai