A La Mode’s MLS Importing Tool – Par with Datamaster?

This is not to endorse Alamode, but their constant ability to solve appraiser quagmires is simply amazing. The MLS importing tool is a tool to benefit from when using TOTAL. On the surface, the idea of taking everything from MLS and importing it would appear to be a mistake, but that doesn't have to be how its utilized. Of course you will review the data entered always but this tool allows for instant importing to the sales grid. No need to worry about mistyping an MLS number or an address because its taken directly from the file.  Once you have selected a file, you will need to create a template. Importing everything isnt necessary and really not recommended. There are certain fields that require specific formatting. Whether that be personal preference or client specific, these "personalizations" are a reflection of our product or just a necessity. What's impressive is A la mode has considered that and they offer what they call a "clean up data during import" feature. This tool really allows you to be in charge of how you want the data being imported to appear on the grid. Lets be clear that properly setting this up does take some time, but in the long term, it will yield a return of your time investment. Your local MLS formatting is fixed. They have certain abbreviations for fields and certain formatting options that may not work for your sales grid, but being clever in setting up certain "clean up" rules, you can get around some of those obstacles. You even have the ability to merge two columns into one field, which is helpful at times when MLS splits address into two columns (address number, address line 1).         Is this a replacement to datamaster? The answer is no. For what datamaster provides… Continue Reading

Why Do Appraisers use Comparables To Value My Home?

So why do appraisers use comps to arrive to a certain value for a property? There are three approaches to valuing real estate and the Sales Approach is what lenders typically require and is typically the most sensible approach to valuing residential property. The whole premise of the sales approach is that the subject home is compared to other homes that would possibly be an adequate substitution for that property. Meaning, would that buyer consider these comparable (comps) as a suitable alternative? An an ideal situation (this can happen in certain subdivisions, tract homes, condos, etc), an appraiser may find an identical match. They then would compare what that sold for and use that as a reference for valuing your property. If the market has changed since the property has sold, an adjustment may be warranted. Essentially, an appraiser has only certain sales to utilize (preferably recent sales) and comparables will have to be chosen from that. Location adjustments may also be considered if that identical property was in another area that may be superior or inferior to the subject home. Really what the sales approach is based on is the principle of substitution. What this principle states is that a home's value tends to be set by the cost of acquiring an equally desirable and valuable substitute property, and assuming no costly delay is encountered in making the substitution. Also, the principle of substitution says that a buyer will not pay more for a property than the cost of an equally desirable alternative (substitute) property. Ex. Home A on Example St is being appraised. An identical home sold last week across the street from House A with identical condition & characteristics for $400,000. Another property sold on a similar road with identical characteristics for $400,000. With these two comparable sales, it is reasonable to… Continue Reading

FHA Property

FHA Approved Loans under FHA require a certified residential real estate appraiser in the state of Massachusetts. We are trained and understand the rules and procedures in FHA's guidance and policy documents. FHA loans are essentially insured by the Federal Housing Administration. This is a federal agency within HUD (U.S. Department of Housing and Urban Development. FHA does not lend money however its a safeguard to protect lenders with mortgage insurance. FHA was created to provide low-income to moderate income families that do not qualify for conventional lending. Order an FHA Appraisal .
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Help! The Appraiser Gave Insufficient Adjustments For My Improvements

"Help! The appraiser didn't give sufficient value to the improvements to my home." This is quite often a homeowner's retort to a lower-than expected appraised value of their home. Homeowners are very proud of their home as well as the improvements made. An appraisers job (per the scope of work usually provided by the lender) is to find comparable homes to the subject. Because in reality, no two homes are identical, the appraiser will bracket items such as condition, quality, etc. So how does this allow for an appraiser to adjust X dollars for my improvements?  Well an over simplification is that the appraiser's goal is to find what the market is yielding for such an improvement. The cost of an improvement isn't necessarily what prospective buyers are willing to pay for such improvement. Its quite rare for cost and value to be the same. Appraisers quite often utilize techniques such as matched-paired, extraction, or regression analysis to get an idea of what a certain feature would be worth in your market. It may be better to approach this as, 'what would a potential buyer be willing to pay for these improvements considering the availability of those improvements in my market?' If such improvements are fairly common and expected, the value to the improvement would be different if the improvement is rare. Its important to remember that although we take great pride in our homes, we need to remind ourselves that if we are looking for an increase in value, we have to think what potential buyers would pay in comparison to homes in your area. Albeit that this is a very general guideline, but it can certain shift our thinking away from the cost equals value notion.

How to Calculate Absorption Rate

Calculating Absorption Rate is part of the market analysis that many appraisers will research. Absorption Rate is a crucial concept that is used in attempts to forecast home prices and sales activity. How to calculate absorption rate: Gather sales (sold homes) over a period of time. Lets use 12 months (1 year). Divide the number of homes by the number of months in the interval.  This calculation will yield a per-month absorption rate. Finally, divide the rate into the number of current listings. This yields the months’ supply of homes in that given market. Its widely used that six months is considered to be balanced. when the number of listings is approximately equal to the number of buyers. Anything over would go further into a buyers market and visa versa for below 6 months.