Birmingham Appraisal Blog

How Shelby County, AL homeowners can find useful property information online

Tom Horn — Mon, 06 Feb 2012 14:46:32 +0000

I would like to share with homeowners in Shelby County, Alabama how they can find useful property information online. Have you ever wanted to find out exactly how big your lot is? Ever wondered where your house sits on your lot? How about finding out what school system the house you want to buy is in? These are all questions you can find the answers to by going to the Shelby County, Alabama website here- www.shelbyal.com. Take a look at the video below and see what type of information you can get.

Were you able to find any useful information? Do you know of any other websites where homeowners can get helpful information for free?

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on Facebook., Twitter, or Youtube.

Can I use the tax assessment on my house to set a list price?

Tom Horn — Fri, 03 Feb 2012 03:09:30 +0000

I was asked this question the other day by a reader of my blog and I thought I would share it with you in case you had the same question. This person was going to list their home for sale and they wanted to know if they could use their tax assessment to come up with an asking price.

Tax assessments are not a good source of information to use when you are trying to come up with a list price. County tax assessors use different methodology when they assess your property because of the shear number of appraisals that they have to do. They use mass appraisal methods which does not take into consideration special features and updates of your home. In addition, the county sometimes have incorrect information regarding your homes square footage. If this is the case then the price per square foot that the county uses will be multiplied by the wrong living area, and this will cause the value of your home to be incorrect.

Something else that may cause the value to be off is the exclusion of recent improvements to your home. If the county information does not reflect recent improvements, for example if you finish off your basement into a recreation room or something similar, then the assessed value will be lower than it should. The only reliable way to get the correct square footage, and eventually the correct value, is to have it measured by an appraiser. The appraiser takes into consideration recent renovations and updates and considers the quality of construction of the home as well. Only by considering all of the features of the home, it’s correct square footage, and condition can you get a true estimate of its value. Have you compared the information the county has on your home with a recent appraisal? Was it correct? Leave me a comment below, I would like to hear from you.

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on Facebook., Twitter, or Youtube.

Appraising In The Aftermath Of A Tornado-Birmingham, Alabama

Tom Horn — Tue, 31 Jan 2012 03:35:57 +0000

How do you appraise a home that has been destroyed in a tornado? That is the question I got from a friend recently after I told him I had gotten some assignments in the storm devastated areas of Birmingham, Alabama. I thought that since he was curious about this that others may be also. I hope this post can provide some helpful information to those with questions about how an appraiser might value a home after it is destroyed.

This past week the Birmingham, Alabama area experienced its second major tornado in less than 12 months. The first storm occurred last year on April 27, 2011, and on Monday of last week another major tornado hit in the Pinson, Clay, and Trussville areas of metro Birmingham. When disasters like this occur, insurance companies must determine the property losses suffered by their customers. Appraisers are often hired to estimate the market value of the home just prior to the loss. Because the effective date of the appraisal is made before the day the appraiser actually looked at the property this is called a “retrospective appraisal”. The appraisal is based on the condition the home was in before the storm occurred.

The appraisers major task is collecting information about the house from an on site inspection as well as from speaking with the owner to determine the condition of the property. Recent updates or renovations are taken into consideration and sometimes pictures are provided that shows what features the home had as well as showing the quality and materials of construction.

After all of the physical characteristics of the home have been determined the appraiser can then go about finding comparable sales that match the property as close as possible. Sometimes a long period of time may have passed between the loss and the day the appraiser looks at the property, but comparables must have sold before the date of value (or loss). Other than recreating the physical characteristics and condition of the home the assignment is rather straight forward and similar to a normal appraisal. If I can help answer any other questions you may have, please let me know. Have you ever experienced the loss of your home in disaster? Tell me about your experience.

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on Facebook., Twitter, or Youtube.

The Chelsea Park Clock Tower

Tom Horn — Wed, 25 Jan 2012 22:43:37 +0000

I like to see landmarks. They help me locate places that I’m going to and help me know that I’m on the right track in getting to my destination. I was in the Chelsea Park neighborhood recently on an appraisal inspection and thought I would snap a picture of the clock tower that sits at the subdivision entrance.

If you think about it, landmarks like the clock tower can add character to a neighborhood and create a sense of cohesiveness within a subdivision, neighborhood, or community. Nice landmarks can make you proud to live in an area while landmarks that are run down or not well taken care of might produce a negative connotation, which could also effect property values in a harmful way. There really is no “adjustment” that an appraiser would make on their appraisal for such a thing, but I think that having something like this can bolster an areas desirability which could help increase property values. How do you feel about landmarks? Do you have any in your area? Do they create a positive or negative influence? Leave me a comment below and tell me your thoughts.

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on Facebook., Twitter, or Youtube.

Six years of sales activity in the Brook Highland subdivision, Shelby County, Alabama

Tom Horn — Mon, 23 Jan 2012 14:23:02 +0000

I like to share market data I get when I do appraisals in different areas. I’ve included sales from the Brook Highland subdivision in the Inverness area of north Shelby County. The sales are from January 2005 to December 2011. The graph charts the median sales price for each quarter for all seven years. The first graph shows a scatter diagram of all sales in this time period.

Sales prices range from $135,950 to $791,536. As you can see in 2005 and 2006 there was a higher concentration of sales, which I have seen in other areas and is expected as this was before we started seeing the effects of the current housing crisis. In the later years there is definitely more sparse sales. In the next graph I have plotted the median sales prices for each quarter of the year.

The lowest median price is at $221,450 and the highest is at $450,000. You can see that there were some drastic variations around the 4th quarter of 2008 (low), 2nd quarter of 2009 (high), and the 4th quarter of 2010 (low). This could be caused by some foreclosure activity or some sales activity within homes in the lower price brackets. Brook Highland has a variety of homes ranging from small garden homes to larger custom built homes with city and mountain views. At the end of December 2011 there were approximately 17 homes for sales, translating to roughly 5 months worth of inventory. This is the absorption rate and I explained how it is calculated in a previous post. Click here to read about it. Do you see any other trends in these graphs? Let me know in the comments below and if you like this post please share it with your friends.

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on Facebook., Twitter, or Youtube.

Are these FHA required repairs?

Tom Horn — Fri, 20 Jan 2012 21:57:03 +0000

I was doing some work recently for a novice property investor and he was asking me some questions about FHA required repairs. He wanted to prepare the house he just purchased so that if the buyers were going to use FHA financing there wouldn’t be any issues at the last minute to hold up the closing. I told him that was very insightful, especially since I’ve seen seasoned investors not even consider this and then at the last minute need to make changes or additions to the property before it would close. By planning ahead this can save time and allow the loan to close without a hitch as well as save the buyer money in unnecessary final inspections from the appraiser.

The two items we were talking about involved vapor barrier in the crawl space and deck stair railings. It’sunderstandable that he was confused because these are two issues that HUD changed several years back. Vapor barrier, or the black plastic sheets that you sometimes see in the crawlspace of homes, was once an FHA requirement. The vapor barrier provides protection against ground moisture and the possible build up of mildew in the house. It is now not necessary to have this. Some people still use it, but they don’t have to, and it will not be a repair requirement in the appraisal.

The next item was stair railings. As was the case with the vapor barrier this was a required repair. It does not require automatic repair now unless it poses a safety hazard. If you have stairs that are 3 or 4 risers high then it should not be an issue, however something 8-9 high is another story. The appraiser will report it and then lender discretion and prudent underwriting will determine if the repair is advisable. I think FHA took a look at their requirements several years back and compared it to the requirements of other forms of financing and decided to ease the requirements a little. They are still concerned about the three S’s: Safety, Soundness, and Security but have backed off of their very strict repair requirements. If you’re not sure what these are and how they relate to MPR’s you can read another blog post I wrote here.

Are you an investor that has an FHA question? Are you a seller and want to know what has to be done to a house for it to qualify for FHA financing? Please give me a call and I would be glad to talk with you about this.

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on Facebook., Twitter, or Youtube.

Birmingham, AL Realtors, are you a socially savvy agent?

Tom Horn — Tue, 17 Jan 2012 14:28:46 +0000

Do you consider yourself a socially savvy agent? Do you tweet, blog, or post videos on Youtube? Are you on LinkedIn, Facebook, or some other social network? If you are not you may want to think about it. In our ever changing business environment being knowledgeable and participating in the online social scene is becoming a necessity instead of an option.

In my own journey of becoming a “socially savvy” appraiser I have ready many books and attended a couple of Wordcamps (the name given to gatherings of users of the popular WordPress blogging platform) to help me hone my skills (they’re not totally honed but I’m having fun working on it). I wanted to share with you a couple of things today. The first has to do with some books I have read and the other an interview I had with local social networking and blogging expert Wade Kwon at the most recent Wordcamp, which you can see below.

The first book I read, and highly recommend, is Chris Brogan’s book “Trust Agents”. One of the biggest things I took away from this book was that you have to set yourself apart from your competition by becoming a “Trust Agent”, one whom everybody trusts and thinks of when they need someone in your field of work. You do this by establishing yourself online through blogging and other social media outlets. That is why blogging is so important. You communicate you expertise by writing about what you do and how you can solve peoples problems. The second book is one I am currently reading. It is “Get Seen” by Steve Garfield and it discusses how businesses can establish a presence online through video. I have just begun reading this book and hopefully will be able to pass on some more tips in the future, but so far he mentioned one thing that really makes sense. By posting online videos about what you do, and how you can help others, people get to know you so that when you finally meet them in person they feel like you are an old friend and they want to do business with you. The online video can be a catalyst to new business relationships.

Lastly I would like to share with you a video of a short interview I had with Birmingham social media expert Wade Kwon. Wade runs the Birmingham Blogging Academy and has a lot of expertise in social media. He shares advice on how real estate professionals such as Realtors and mortgage professionals can use social media to enhance their marketing efforts. Let me know if you have any questions regarding social media and how you can get started. If I can’t help you I know Wade can.

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on Facebook., Twitter, or Youtube.

Sales activity in Montevallo, Alabama for 2011

Tom Horn — Fri, 13 Jan 2012 13:24:14 +0000

I was in Montevallo, Alabama last week on an appraisal assignment and thought I would share with you the sales data I came up with. Montevallo is in southern Shelby County and is the home of the University Of Montevallo, The American Village, and the new Alabama National Cemetery for Veterans.

The majority of sales activity in 2011 was the sale of existing homes, however there was some new construction. The Birmingham Multiple Listing Service records indicates that only 9 new homes were sold last year. There are currently only 6 new homes for sale. Overall sales activity may seem minimal but it seems to be in line with annual sales over the past 3-4 years.

Take a look at my slideshow of scenes around Montevallo, along with the sales statistics contained it it, and let me know if you have any questions, I would love to help you.

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on Facebook., Twitter, or Youtube.

Birmingham, Alabama Cash Buyers: Don’t Make This Mistake

Tom Horn — Wed, 11 Jan 2012 14:31:11 +0000

After seeing an article about how cash buyers have made a strong showing in residential real estate transactions I started wondering how many of them got appraisals on their purchases. Most of the time people think the only reason to get an appraisal is so you can borrow money from the bank. This is only part of the story though. The other reason is that you want to make sure that the property you are buying is truly worth what you are paying, and that it is a good investment. You may be paying less because of the market we are currently in, but you still need to make sure that it is worth what you are paying. You want to increase the chances that if you had to sell later that you could get your money back.

In the Birmingham, Alabama market cash sales made up about 10-13% of total sales from 2001-2007. Residential sales peaked in volume around November of 2006 when 1485 homes sold, according to the Alabama Center For Real Estate. Sales then started taking a nose dive. Right after that, the percentage of cash sales increased dramatically to around 17% in 2007-2008 and has steadily climbed to around 32% between November 2010-2011. This is very close to the national average of 38% for the nation as reported by Housing IntelligencePro. A lot of these are probably investors, but I am sure there are a good number of owner occupants as well. Banks will tell you they are still lending but the numbers contradict this. What I do not want to happen is for people to forgo the appraisal just because they are using their own money.

I will give you a real world example. Several weeks ago I got a call from an older lady who was interested in buying a home with inheritance money. She was looking at down sizing into a smaller garden home, but did not want to take out a mortgage. This was an older lady who was in her retirement years, and for whom every dollar she had counted. Her idea was that she wanted to be sure she was paying the right price because if she was paying more then it would take away from money she could be saving and/or investing since she was no longer working. It turned out that the home was over priced. She used the appraisal to make a counter offer to the sellers and they accepted it. This situation turned out well, however in the past I have seen the seller refuse the offer. In the short term this may be an inconvenience to the buyer but by looking long term it can help you make smart money decisions and make good investments. Are you considering a cash sale? Let me know if I can help answer any questions you may have.

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on Facebook., Twitter, or Youtube.

I Can Help Birmingham, AL Realtors With Their Sales Meetings

Tom Horn — Mon, 09 Jan 2012 15:46:38 +0000

If you are a Realtor in the Birmingham, AL area I would like to help you with your sales meetings by providing appraisal education to your agents. I have spoken in the past at local real estate offices about how to read an appraisal, how we come up with comparables, why we sometimes must use foreclosures as comparables and various other issues. These topics are good for new agents to know as well as those that have been in the business a long time but may still have questions. Contrary to what some believe, agents and appraisers can speak together about certain things.

I can also speak about FHA appraisals and how we look at those properties differently than a conventional purchase. By knowing what appraisers look for the agent can prepare the listing so that follow up trips can be avoided, thereby saving the buyer money and helping the loan close more quickly. HUD has certain guidelines we must follow and I can give you a heads up regarding common problems I have found doing FHA appraisals.

If you think I can help you educate your agents on various aspects of the appraisal process please give me a call, email me or text me. I look forward to connecting with you.

If you have any real estate appraisal related questions you can call me at 205.243.9304, email me, or connect with me on Facebook., Twitter, or Youtube.