Wednesday, October 26, 2011

Big Changes in Real Estate

The sub-prime loan lending collapse has had fallout in all areas of real estate. Recent changes in the guidelines for appraisals are a perfect example. New rules that took effect as of September 1, 2011, are:

  • Days on the market - The appraiser must account for all of the days the property has been listed for sale. No longer can agents take a property off the market for thirty days and have that escape the appraiser's attention. The more the days on the market, the more likely the days on the market will effect the property's appraisal negatively.

  • Offering price - The appraiser must report the offering price history and price changes.

  • Sale type - The appraiser must report the type of sale from a list of choices.

  • Financial assistance - All financial assistance including monetary and non-monetary assistance must be reported including gifts, payment of property taxes, and HOA dues for a period of time, etc.

  • Property view - A view rating must be assigned. The appraiser has the choice of neutral, beneficial or adverse. In the past, unless a view was exceptionally good or bad, it went unnoticed, this change will require that each property be assigned a number value for review.

  • Property style - Much more detail is required. One story and two story will not describe a property.

  • Condition - Much more detail is required. This is a boon to sellers who have updated their properties. The work done to a house must be described as "not updated", "updated" or "renovated." Specific definitions are applied for these terms. This change gives a clear advantage to sellers who have updated their properties.

  • Quality of construction - This change is also a plus for sellers who have purchased higher quality construction in a subdivision. Many times agents see subdivisions that are begun with one level of construction, but finished with a lower quality. This change is more accurate and saves the seller attempting to explain the change in construction or builders.

All change creates tension and apprehension. These changes are positive for the most part because they allow an appraiser to explain a property's value which might exceed the norm for the neighborhood . The downside is that appraisals may cost more. The upside may well exceed the downside for most sellers'.

Are you or someone you know looking to list your home for sale? Call on the experts at the Grove Team, Keller Williams to schedule a personalize appointment to meet with a listing specialist today, (817) 337-0000 or find us online,

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