Dear Appraiser, My Seller is not your enemy….

AN OPEN LETTER TO THE 2 APPRAISERS WHO SHOULD HAVE THEIR LICENSE REVOKED

First, I want to say to all the competent and professional appraisers I have had the pleasure of meeting and chatting with: You are a complement to your profession and we, as realtors, appreciate the hard work you put into your occupation.

Now, to the 2 appraisers who sent in mistake-riddled appraisals on a recent deal and NEARLY prevented my seller from selling, SHAME ON YOU! It’s not about you, it’s not about me, or the other realtor, or the mortgage co, etc. It’s about the Seller and the Buyer. Period. Their dreams, their goals, their aspirations…and yet you trample them without a moment’s thought (or so your appraisal made it seem).

I know you have taken a lot of heat over the market taking a dive. But that’s water under the bridge. It’s up to us to bring this market back and that’s only going to happen when good buyers and good sellers can complete a transaction.

When we met at the property, I brought both of you a brief synopsis of comparable properties and a quick opinion of value. Obviously, I knew (and expected) you would both do your own research but thought you would come close to my opinion. What happened??? Having lived in the neighborhood for 6 years and sold numerous homes in here, I am well aware of current values. In fact, 4 of the 6 comps you used in your appraisal were MY LISTINGS, yet you never called me for additional details on the homes. Ultimately, you made quite a few mistakes on the appraisal that required me to write a written appeal asking for corrections – but it was too late at that point.

Putting your incompetence aside, you wouldn't know that my seller lost his wife of 30 years about 18 months ago. He is battling cancer himself and his house was just too big and filled with too many memories of his soul mate. Not that you knew (but maybe deduced from public records), he was also bringing $50,000+ to the closing table to get the deal done. Ultimately, the home appraised as it should have – on the THIRD APPRAISAL - after 2 wildly inaccurate appraisals blew apart 2 different contracts. When you fail to complete your due diligence and sign off on that error-riddled appraisal, you are affecting people’s lives immeasureably.

If you are from across the Bay and unfamiliar with our area, why wouldn’t you take assistance from a “neighborhood expert”? Your terse response to my comps, “I’m not allowed to speak with you” is not quite accurate. Other appraisers have told me the law does allow you to consult with experts in the area to arrive at a reasonable fair market value. Just because a bank orders the appraisal from you doesn’t mean you automatically know our area…

In the end, it all worked out. The Buyer and Seller closed the deal for quite a bit more than your appraisals came in at. When you’re doing future appraisals, please consider speaking with the listing agent and enlisting their knowledge to help you accurately produce an appraisal. If you aren’t sure of a home’s features or have questions about the comps, PLEASE ASK…we are on your team and will get you whatever information you need.

To those 2 appraisers (I use that label loosely), please re-assign the appraisal if you see me listed as contact for the appraisal. I don’t want to work with you in the future. I want to work with professionals who show a willingness to understand our market and will complete an accurate appraisal of fair market value.

By now you have heard...January home sales were waaaayyyy down. By my calculations, sales in ALL sectors - homes, condos, beach, mainland, etc - were down 40%-50%.

What does this portend?? Well, that "V"-shaped recovery is an extended "U". I think is was a typical post-holiday lull complicated by record low temps (man, was it cold showing houses) coupled w/ a slowly declining market. I think we'll see more "normal" (a term I use very loosely) numbers in Feb and beyond.

The bugger in the covers are now the appraisals. Arms length sellers and buyers are watching their dreams evaporate thanks to new mortgage rules that require ZERO communication between sellers, buyers, realtors, mortgage brokers, etc. This rule would have been great 4-5 years ago but there are few who believe they can get away with mortgage fraud these days...which is what these rules aim to eliminate. Now, it's the regular joes like you and me who can't move on with their lives because some appraisers are UNWILLING to correctly value our homes.

I wanted to take a moment and speak to buyer, sellers, and homeowners in general about a subject that makes us cringe…no, not our 401k’s….

…termites. Yes, those creatures that are almost invisible until you find out you have them, and then you think you see them anywhere. Let’s start with some basics…

There are 3 kinds of termites specific to our area:

Subterranean (aka Formosa)
Drywood
Dampwood

For our purposes, we’ll stick to subs and drywoods because they are most relevant to property owners (and those soon to be).

Subterraneans are the most aggressive form of termites in that they can demolish a home in months, thanks in large part to their voracious appetites and large colonies. Subs attack a home from the ground – foundation cracks, wall fissures, pipes, and untreated wood touching the ground are common avenues for subs. They have even been known to build “mud tubes” to protect them from the elements as they travel across non-wood materials.

Drywoods are a very common termite in Florida and if you were to have any infestation, you would want these guys. They come uninvited, eat very slowly, and sometimes move on to greener pastures (read: your neighbor’s home). Drywoods travel via flying…when they swarm Jan-May (depending on temp and rain), pairs travel to new areas to start colonies. With block homes, drywoods typically fly up into the eaves and will get in the attic, which is all wood.

That info is nice to know, but how does that help YOU??? Good question. The first thing I have learned is NOT to fear these little buggers (excuse the pun). Once you understand them and how they exist, they are more of a slightly expensive nuisance than anything else (caught early enough, that is).

The 2nd thing to know is that their presence does not signify the end of the world, or your transaction, for that matter. Real Estate contracts have Wood-Destroying Organism (WDO) clauses in them that provide for treatment should termites or wood decay be discovered. Educated Buyers and Sellers know that tenting your average 1500 – 2000 sf Florida ranch will run about $1000 - $1500, normally comes with a multiyear warranty, and can be done before a new buyer moves in. Buyers of SFH should always get a termite inspection – they cost $50 - $75 and can be done concurrent with a regular home inspection. Please know that Florida law has changed with respect to inspectors – inspection reports are considered valid for that day ONLY, as termites can appear as the inspector pulls away in his car.

3rd, ALL homeowners and homebuyers need to know what to look for when viewing a home, in addition to having an inspection completed. Mud tubes on the exterior, “galleries” of eaten-through wood, mustard-colored round pellets (drywood), wings, and debris around windows and doors are all indication of current or past termite infestation. One of the biggest problems with termites is that they eat wood JUST BELOW the surface, sometimes keeping the problem hidden for months and years.

With it being a Buyers Market (Take note, Sellers) I wanted to touch on some aspects of home-buying that may be "Less-Mentioned" or thought about. Although your primary focus is buying right now, statistics show the average home owner will only stay in the home appr 7 years! With such a mobile society and fluid job market, expect to be uprooted (your choice or not) within 7 years and PLAN YOUR PURCHASE ACCORDINGLY...or better said, plan on choosing a home with good RESALE VALUE!

Here a few areas to consider when purchasing knowing this is not you final home:

1. Schools - this point can be belabored, but when it comes to children, parents want their kids in the best schools possible. If choosing between 2 homes, even if you don't have (or expect to have) children, take into consideration school quality before you make your decision. Florida school grades can be found at http://schoolgrades.fldoe.org/
2. Neighboring properties - this can help OR hurt you. I have a friend who bought a home 10+ years ago and now he finds himself surrounded by light manufacturing/industrial properties. If you don't mind bumps and noises in the night, cool. However, this will present an issue when selling. Do your due diligence on surrounding properties before pulling that trigger. The flip side: if my friend decides to sell, he would be well served by investigating a possible zoning change to similar zoning for his area...homes zoned for commercial enterprises are sometimes more valuable than homes left for residential purposes.
3. External Obsolecences - this term refers to external variables the de-value a property. In a local city, a developer built an exclusive gated enclave that just happened to be next to a very small dog kennel. Years later, owners of these McMansions were upset to learn that the kennel, which is hugely popular, asked the municipality for permission to expand their kennels. Suddenly, neighbors were up in arms about the noise and smell from the pre-existing kennel. The issue is not about the kennel or the multi-million dollar homes...the kennel, whether big or small, externally affects the value of that subdivision.
4. To pool or not to pool - this is a completely subjective feature. I have had buyers who absolutely needed a pool, didn't want to see any homes with pools, and didn't care whether it had a pool or not. In general, a pool will only add about $5000 - $10,000 of additional value to the property. Think long and hard before you have a $45,000 pool installed because you will NOT get your investment back when you sell.
5. Roads - this is something very savvy buyers will look into. Throughout the Tampa Bay area, we have seen a HUGE population boom which corresponds with an increase in traffic. Home sitting on a quiet 2 lane, scenic road in 1990 now find themselves watching 1000's of cars drive by on a bustling 4 lane artery in 2008! Sometimes, there is even a road there, but traffic needs dictate one be constructed. So how does a buyer find out if a road will be widened in the near future??? In Pinellas County, we have a Metropolitan Planning Organization (MPO) that issues 20 year forecasts for traffic/road construction: http://www.pinellascounty.org/MPO/LRTP/CFP.pdf