THE VIRGINIAN-PILOT
Copyright (c) 1995, Landmark Communications, Inc.
DATE: Saturday, January 28, 1995 TAG: 9501260279
SECTION: REAL ESTATE WEEKLY PAGE: 02 EDITION: FINAL
COLUMN: WHAT IT'S WORTH?
SOURCE: Thomas Tye
LENGTH: Medium: 72 lines
Q. I frequently read Robert Bruss' real estate column, he paints many appraisers as being incompetent. I need to get a loan and I am concerned one of the people he refers to in his column will show up!
A. No. Mr. Bruss, a highly respected attorney and writer, has apparently had a bad experience with an appraiser. Like lawyers, or any other profession, there are good appraisers and ones that may not be so good. However, lending institutions have minimum standards, and the one you referred to is a highly reputable company. They will insure that the appraiser who values your home is competent.
Apparently, Mr. Bruss had a situation in which he was unable to finance the purchase of real estate because the appraised value was less than needed to have the loan approved. This seems to be a repeated theme in his column when he discusses real estate appraisers.
Yet, it is not known whether the property was as valuable as Mr. Bruss anticipated and the appraiser did a proper job or if the appraiser actually valued the property at less than what it was worth.
It is unusual that there have not been situations in Mr. Bruss' column when the appraised value was higher than it should have been. This too can happen. When properties are valued higher than they are actually worth, and a loan is made, the lender has a much greater level of risk.
You should know that if your property is appraised for an amount different from what you think is correct, you can do something about it. You should find properties that have sold recently and are similar to yours to support the estimate of value that you have in mind. This information needs to be presented to the lender.
You must remember that the appraised value is a supported estimate. Support is in the form of data, which usually is market data of sales of similar properties. If you have information that supports an estimate different from the appraiser's, then present this information to the lender and have them give it to the appraiser.
Appraisers, like anyone else, make mistakes from time to time. If you have adequate information to support a change in value then the person who valued your home should readily change the report. However, please keep in mind that ``your home is your castle,'' and some times this cannot be quantified. Is better access valuable?
Q. I live in Virginia Beach and a new roadway has opened that makes it very easy to get to my subdivision. Will this increase the value since I now have a better location?
A. There are several components to a property's location. Accessibility and distance to major traffic arteries are certainly part of the locational attributes. If the location that you have is now much easier for a typical purchaser to arrive at, and if in the past your location was difficult to get to and therefore not considered by some buyers, there could be increased demand for your subdivision.
If in fact there is increased demand for the subdivision, with time, the prices will increase. However, to put a dollar amount on how much your property will likely increase due to being more convenient to this roadway, is very difficult.
A method to make this determination is to find another subdivision that has similar access as yours and determine whether the housing prices for this feature are in fact higher. If they are higher and the only difference is that they have enjoyed better roadway access, then a dollar or percentage amount could be applied to your property to estimate the amount of increase in value that you will enjoy.
Short of doing this, with time you will be able to tell whether the roadway has enhanced your property value. by CNB