Dallas Appraiser L.L.C. wants your help and commentary on our Real Estate Blog

Title: 

When Will It be the Buyer's Turn

Word Count:

599

Summary:

There has been a lot of talk about the market cooling. Does this mean it is now the buyer's turn at benefiting from market conditions?

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Article Body:

There has been a lot of talk about the market cooling. Does this mean it is now the buyer's turn at benefiting from market conditions?

A buyer's market occurs when sellers have little or no power in the negotiating of the sale of a home. The buyer has an advantage in that there are more homes to choose from. Housing prices may also be down due to the negotiations of wise buyers.

Are we heading for a buyer's market? Some areas have shown indications that we are. In many areas, home sales have slowed down. Homes are staying on the market much longer. The longer a home is on the market, the sellers should be more willing to negotiate.

Not only is the inventory of homes for sale going up, but the housing prices in some areas have stopped increasing. A few areas are actually experiencing decreases in housing values.

You may be saying that interest rates are working against buyers, but that isn't necessarily the case. Interest rates still remain at a reasonably low level. What this means is that the average person can still afford to buy the average home.

In fact, interest rates help create a buyer's market. With interest rates on the rise, many homeowners are experiencing monthly payments on their adjustable-rate mortgages. Some homeowners who purchased at the peak of the market are just now having their mortgages adjust. There are reports of payments doubling in size for some borrowers who took out risky loans.

Foreclosures are on the rise. People just can't afford their homes any more. They have to sell and they have to sell quickly, before they are foreclosed on. With more and more homes popping up for sale, buyers will have plenty to choose from.

All of these conditions give buyers an edge in the real estate transaction process. Buyers don't have to jump on the first home that they see because homes are no longer few and far between. In many cases, bidding wars won't be an issue. Multiple offers may still occur, but buyers are likely to be a little more relaxed. Of course, this is in general -- there will still be areas and neighborhoods that are experiencing a lot of buyer demand.

If you are looking at buying a home in an area that is experiencing a slow down or buyer's market, you can use things to your advantage. Find out your seller's reason for selling. It could be that time is of the essence, giving you an edge. If there are any contingencies that you need to include in the contract, now is the time. Sellers that are having a hard time selling their homes are more willing to do what is necessary.

Don't forget to have the property appraised -- and make sure that there is an appraisal contingency in your contract. If you are in an area that is experiencing quickly dropping home values and your closing is several months away, I would go ahead and have the property appraised for a second time close to closing.

You should also have the property inspected by a professional. This should happen in both buyer's and seller's markets. You wouldn't buy a car without a test drive, so make sure that you at least look under the hood of the home.

Buyer's markets are great for buyers. If you are in the market to buy a home, pay attention to the home sales in your area. But don't worry too much about the market, what counts the most is buying a nice house that you can afford.

Title: 

Warranty Deed vs. Quit Claim Deed

Word Count:

381

Summary:

When you are in the process of selling (or purchasing) a house, you will most likely, encounter several kinds of documents: all with different names and with different uses and functions. Two of the most misunderstood documents are the warranty deed and the quit claim deed. Many think that these two forms are alike, but they are not.

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Article Body:

When you are in the process of selling (or purchasing) a house, you will most likely, encounter several kinds of documents: all with different names and with different uses and functions. Two of the most misunderstood documents are the warranty deed and the quit claim deed. Many think that these two forms are alike, but they are not.

A warranty deed is a document which the seller presents to you and is used in majority of all sales transactions. The warranty deed simply states that the seller owns the property being sold and that it is free from any sort of liens. By presenting a warranty deed, the buyer is assured that the holder of the title has the legal right to transfer ownership of the unit and is assured that no one (financial institution or other creditors) would come after him to make a claim on the property. In the eventuality that someone does lays claim to the property that has just been purchased (or that the claims stated in the warranty is erroneous), the buyer is further protected by law, and would be entitled to receive a form of compensation. Warranty deeds seldom stand alone as these documents are usually backed up by a title insurance policy.

A quitclaim deed, on the other hand, is presented to a buyer by someone who does not necessarily own the property being sold, but holds responsibility for it. This occurs due to several reasons such as when the owner dies and bequeaths the property to one of his heirs, or when there is a marriage and the owner wants to include the name of his/her spouse to the title (among others). A quitclaim deed offers a lower level of protection to buyers. This kind of document is used primarily when the property in question will just stay within a family.

Incidentally, there are times when both a warranty deed and a quitclaim deed are presented to a potential buyer. An example is when the property lies on the border of rivers and or lakes; where ownership of the underwater land on which his property stands on remains unclear.

If you are unsure which kind of deed works best for your property, consult a real estate agent or a real estate lawyer.

Title: 

Warning to Beginning Real Estate Investors

Word Count:

326

Summary:

Beware of outdated seminars, books, and promotions. These real estate investing method worked last century.

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Article Body:

Real Estate Investing: Beware of "Subject To" Promises

A real estate investing mini-course, full of promises and fluff, ended with a "lesson" on why you need to buy a real estate ebook so you can finance multiple properties "subject to." The reason, the email said, "Because banks won't let you finance more than ten mortgages."

This simply isn't true.

First, banks let you finance as many mortgages as you can pay for. Some banks limit the number of loans made to one person. Experienced real estate investors just move on to another lending institution.

I know one investor who owns more than one hundred single family homes. All have mortgages. He constantly refinances one rental for the down payment to buy the next. Besides living off the cash flow from his rentals, he also refinances a rental occasionally to take his family on a first-class vacation.

Another investor, my friend who owns the carpet company we use for our fixers, owns more than fifty rentals. None were purchased "subject to" the existing loan. Many were purchased "all cash" for quick closings, with mortgages added later.

For beginning real estate investors, looking for an owner willing to sell their property "subject to" the existing loan adds a frustrating component to the search for a profitable property. Today's savvy home sellers just won't sell to a buyer who can't cash them out.

Of course, some investors offer "subject to" and lease-option purchases. But, properties with most of the equity stripped out come with payments too high for rental income to support. These properties make better candidates for owner-occupant home buyers with poor credit who don't mind paying more for a house.

Beware of "subject to" seminars, books, and promotions. This real estate investing method worked last century.

Copyright � 2005 Jeanette J. Fisher. All rights reserved.

Title: 

Was that House a Good Investment? The Answer may not be so obvious

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477

Summary:

I get asked all the time about housing as an investment, and as I talk with people it is amazing how differently people look at it.  Forget investment property for the moment and consider how we should evaluate the investment performance of our own homes.

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Article Body:

I am surprised how many people do not know the difference between ‘enterprise value’, which is the sales price of a home (debt plus equity), and ‘equity value’, which is what is left at the end of the day when you sell your home and pay off the mortgage.  In determining whether this was a good investment for you, it is only the latter calculation that matters.

Most people simply look at how much the value of their home has appreciated since they bought it, and compare it to what they paid.  Let us say someone bought a home for $500,000 a year earlier and their neighbor’s identical home just sold for $550,000.  Simple math would suggest a potential 10% return in one year (a $50,000 profit on a $500,000 purchase).  This, while straightforward, is not an accurate calculation for several reasons.

First, it is critical to factor in transaction costs on the sale of your home and deduct them from the gross sales price to see how much of the sales price you have left.  These include what it might cost you to prepare the house for sale (painting, landscaping, staging in some cases, etc.), as well as real estate commissions and other transaction related costs.  Let us say in our hypothetical example our seller would invest $10,000 in sprucing the place up for sale, and the real estate commission plus other closing costs on the hypothetical $550,000 sale might be another $33,000 (say 6% of the sales price).  Thus that $550,000 sales price results in only $507,000 after these transaction-related costs, implying a mere 1.4% return ($7,000 profit on a $500,000 purchase price), right?  Wrong again.  

To calculate your investment return you need to compare your profit (or loss) to the equity you have invested, not the entire home price.  Let us say you put 5% down to buy the home, which equated to $25,000.  Your $7,000 profit in this case actually represents a very attractive 28% return on your investment in only one year.  One way smart homeowners can increase their returns is to appreciate how much the return on their invested equity can be enhanced by saving say 1% in the agent’s listing commission.  In the example above, a 5% sales commission vs. 6% would have increased our hypothetical seller’s return on their $25,000 of equity investment from the 28% we just calculated to an astonishing 50% ($12,500 profit on the $25,000 investment).  

A couple of basic takeaways from this:  First, make sure to factor in all costs of a transaction.  Second, understand the difference between the aggregate home value and the equity you have invested in the home, which is what impacts your true economic return.  Third, appreciate the impact sales-related costs can have on your return.  While a $5,000 commission difference seems relatively insignificant in the context of a $550,000 home sale, it is VERY significant in relation to the equity investment in your home, which is the basis of determining your return on your investment.

Title: 

Want To Sell Your Home Faster? Try Home Staging!

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626

Summary:

Do you need to sell your home fast for a great price?  Try home staging! This article tells you how to use home staging to decrease your home's days on the market and increase the sales price!

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Article Body:

Home staging tells homeowners how to prepare and market their home for sales in the real estate market. Professional home stagers are professionals that help you in preparing your home for sale. They help you create a very good first impression on potential homebuyers by taking care of your house and its appeal. 

Professional home stagers rearrange your home’s furniture, making it more organized. They help you redesign your house so that it appeals to potential homebuyers in the market. They can also suggest and in some cases, purchase furniture or fixtures to make your home show it is absolute best!

To put it differently, they make your house sellable with their design experience and expertise. Home staging is particularly useful where prices appreciate slowly and finding a buyer takes a lot of time.

The Home Staging Process

The first impression is the key to a good offer (read: high price) and quick sale. Most buyers make up their mind even before entering the house! That is why it becomes so vital to create a winning first impression. A real estate agent may be good at marketing your house, he/she may know what makes it sell but in all probability he may not be able to help you do it. This is where professional home stagers come in. They help you prepare your house for the best first impact.

Zeroing in on a professional home stager is not difficult. You can ask your friends and acquaintances who have recently sold a house for reference. Your real estate agent or company can also help you in this regard. In all probability they might have already utilized the services of the professional home stagers in your area.

Once you have zeroed in on a few home stagers, the next step is to find out the cost. It is always good to get an estimate from a few home stagers. Mostly it is a quick and accurate process. You should then make calculations and comparisons. It is always a good idea to discuss estimates with them before making a final decision. 

It is also important to take into account others factors like the state of your home, asking price and average time the houses are on sale before a deal is clinched. Asking price is the most important factor. If the asking price is low, it may not be feasible to hire professional home stager, more so when the higher price is not in tandem with the cost involved. All these factors go a long way in helping you make an informed decision of hiring a professional home stager. 

On occasion your real estate agent may also contribute to the charges of your professional home stager. This is done when your real estate agent is convinced that the charges are reasonable and the investment is worthwhile.

Doing It On Your Own

If you do not want to spend money and hire professionals you can do home staging on your own. Here are few tips on do-it-yourself home staging:

1) Clean your house, yard, kitchen bathrooms, drapes, and carpets. Wash the windows. 

2) Make your home organized and less cluttered. This will make your home look neat and spacious. Remove all the unnecessary objects.

3) Get your home repainted.

4) Check the floor. It might need refinishing.

5) Change furniture and fixtures to make your house more appealing. You can buy try borrowing or renting.

6) Remove unnecessary pictures. Rearrange others.

Home staging can help your house sell faster and at a better price than you probably would be able to without any preparation.  The thing to remember is that your home should appeal to a wide variety of buyers.  The best way to do this is to use neutral colors and rich fabrics.

Title: 

Virtual Real Estate

Word Count:

439

Summary:

Your web site IS virtual real estate

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Article Body:

Virtual Real Estate - just what am I talking about here?  If I look up ‘virtual’ in the dictionary, it gives me words like near, practical, fundamental, or essential.  It also lists actual as an antonym.  Remember in school how we were required to use the new word in a sentence to show that we understood the meaning?   So many times we have heard sayings like, ‘Oh, that is a virtual impossibility,’ ‘Virtual Reality’, or ‘he is virtually unstoppable.’   As you can see in these phases, virtual is being used as an adjective or an adverb.  Here we are using it as a descriptive meaning practically, fundamentally, or essentially.  The word virtual can also be used as a noun as in this example:  virtual focus.  Here, the meaning of virtual focus is a ‘point’ from which rays of light seem to emanate but do not actually do so (such as in the image in a plane mirror.)  Now we are going back to another word we learned in grade school, antonym.  Antonym mean opposite.  The thesaurus tells us that ‘actual’ is the antonym of virtual.  To look at this closer, consider ‘actual real estate’ compared to ‘virtual real estate.’  You can go out and see, touch, and feel actual real estate.  Virtual real estate requires that you use a computer to ‘see’ it.  Virtual real estate has no physical borders.  Anyone (with a computer) from anywhere can visit the virtual real estate site anytime. 

  When you create a web site, you are creating virtual real estate.  It can be just as valuable as actual real estate.  In fact, a profitable web site can be more valuable than you ever imagined.  Another advantage of virtual real estate is that almost anyone can afford it.  In fact it is so inexpensive to create a virtual real estate site that many entrepreneurs have several of them.  Each site can promote a different product, value, or information because what appeals to one person may not appeal to another.  When you want to purchase actual real estate, a real estate agent helps locate the type of property desired.  However, with virtual real estate, you only need to find the training on how to develop a web site (lots of courses out there) and then the product you will promote.  Can’t you see it now, new classes creeping up: Virtual Real Estate Agents or Virtual Real Estate Development?  

Good luck in this new virtual reality,

Karen Kelley

This and many more topics on the creation of profitable web site techniques are taught at: 

http://www.bestonlinesuccess.com. 

Also included is a FREE 12 hour video course.

What Pitfalls to Avoid and How to Avoid Them in Real Estate

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The last experience that anyone wants to add to their list is being involved in a real estate deal and having everything go wrong.  It is hard enough to simply find a place to move and to have everything from the contract to the loan be put in place properly.  If you don't want to have extra hassles when you are packing your boxes, then preventing some pitfalls along the way can help.  

One of the major problems that several homeowners run into is having the wrong information or not finding the information that they need for their home.  You don't want to get caught with the wrong loan, the wrong type of financing or payments that you have to make every month that you can't afford.  There is nothing that drives a family out of a home faster than a bad financial deal.  Understanding terms and investigating possibilities will help to prevent this.  

A second pitfall to avoid happens when you are looking at the property.  You want to make sure to not get too attached to an area or to approach the property with specific intentions.  Eventually, you will end up getting a bad deal and won't be able to benefit the most out of a property that may have been better.  Making sure that you examine every part of the property and are certain that it is right for you can help you to feel like you have invested in something more worth while.  

With every part of real estate investments, you want to make sure that you do several things.  The first is to investigate the terms and possibilities to you.  The second is to move logically into a real estate investment.  The third is to double check your information, your investment and the other options available.  

As long as you keep your mind, eyes and ears open, you will have the possibility to find the best piece of real estate available to you.  This will help you to get the most out of your investment.  This isn't something that will just last days or one year, but for several years to come.  It is best to do things right the first time.  

Title: 

Valuation of Business Personal Property (BPP)

Word Count:

956

Summary:

The huge range of assessed value for business personal property (BPP) makes obtaining substantial property tax reductions highly probable.  It is not unusual for the range of assessed value for BPP accounts for similar properties to vary by 5,000%!

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Article Body:

The huge range of assessed value for business personal property (BPP) makes obtaining substantial property tax reductions highly probable.  It is not unusual for the range of assessed value for BPP accounts for similar properties to vary by 5,000%!  For example, furniture and computers for companies within the same office building sometimes vary from $1 to $50 per square foot.  Market value and unequal appraisal are two options for appealing BPP assessments.  Given the inequity in BPP assessments and the subjectivity of valuing BPP, property owners have a high probability of success when properly prepared for a BPP assessment appeal.  Protest both market value and unequal appraisal.

Market Value, Book Value & Comptroller Schedule

Three popular options for describing value for BPP are: market value, book value, and the Comptroller's schedule.  Market value is defined in section 1.04(7) of the Texas Property Tax Code that reads as follows: 

"Market value" means the price at which a property would transfer for cash or its equivalent under prevailing market conditions if: (a) exposed for sale in the open market with a reasonable time for the seller to find a purchaser, 

(b) Both the seller and the purchaser know of all the uses and purposes to which the property is adapted and for which it is capable of being used and of the enforceable restrictions on its use, and

(c) Both the seller and the purchaser seek to maximize their gains and neither is in a position to take advantage of the exigencies of the other.

Let's compare the differences in value resulting from using market value, book value and the Comptroller’s schedule. The BPP for a typical motel room includes items such as bedding, linens, window air-conditioning unit, towels, and a television. Based on market value, after one year, these types of items could probably only be sold for 10% to 30% of the original cost.  Book value, based on federal depreciation schedules, indicates a value of 80% of the purchase price after one year.  The Texas Comptroller's schedule for BPP for motels has an eight-year life with 10% depreciation for the first seven years.  Hence, the Comptroller schedule indicates one-year old hotel furnishings are worth 90% of their original purchase price.  This is clearly inconsistent with market value for these items.

Inventory

There are a number of controversial issues related to how inventory is assessed.  These include shrinkage, damage, functional obsolescence and economic obsolescence.  For example, what is the market value of merchandise returned during the week after Christmas on January 1st (the effective date for valuation)?  Since returned merchandise has usually been opened, damaged, missing parts or may be an unpopular item, it is worth less than cost in many cases. Market value is relevant in determining the assessed value for inventory for Texas BPP taxes. 

Unequal appraisal

Assessed values for BPP accounts often range from ten-times to fifty-times on a per square foot basis for companies in the same industry.  For example, real estate brokerage offices, which have 10,000 square feet of office space, may have assessments ranging from $10,000-$500,000.  It seems unlikely that the computers and furniture in one brokerage office are 50 times as valuable as those in a competitor's firm on a per square foot basis.

Appraisal districts tend to accept the assessed value rendered by property owners.  Many large companies render using fixed asset listings.  Appraisal districts use the cost basis information and the Comptroller’s schedule to calculate the "market value" for property.  The valuations for these rendered accounts tend to grossly distort the actual value of these properties.  Property owners who do not render have values on the lower end of the range of value.  While it seems intuitive that appraisal districts would penalize owners who do not render by sharply increasing their assessed values, the practice is the opposite.  Appraisal districts tend to reward property owners who do not render by leaving their assessed values at modest levels.  This creates a disincentive to render.  It also unequally taxes property owners who render with a fixed asset listing.  These factors have caused a high degree of dispersion in BPP assessed values. 

How To Appeal On Unequal Appraisal

Contrary to popular belief, it is possible to appeal BPP utilizing unequal appraisal, a concept that is fairly new.  Most property tax consultants and large property owners have not considered or utilized unequal appraisal regarding BPP.  Appraisal districts are resistant to the concept of appealing BPP based on unequal appraisal.  (It is inappropriate to tax property owners who render using a fixed asset listing at the highest level, based on utilizing the Comptroller schedule, when allowing property owners who do not render very lean levels of assessment.)

Preparing an appeal based on unequal appraisal for BPP is simple and straightforward. Start by obtaining information on the assessed value, and amount of office space/manufacturing or warehouse space for property owners similar to the subject property owner.  This is typically done by using companies with the same Standard Industrial Code (SIC) as the subject property owner.  You can obtain this information by sending an open records request to the appraisal district.  When appealing, research the assessed value for your competitors. Compile data regarding the assessed value and building area for the subject and comparable accounts into a summary.

When should you appeal?

Appeal annually on market value and unequal appraisal.  To effectively appeal on these two options, research unequal appraisal based on assessment of comparables on the appraisal district’s web site and evaluate the market value of your BPP.  After reviewing both the unequal appraisal and market value options, determine your primary focus for appealing your BPP account.  If neither market value nor unequal appraisal provides a basis for appealing your property taxes, you can withdraw the notice of protest or just skip the hearing.

Title: 

The Benefits of Using a Real Estate Website Design Service

Word Count:

582

Summary:

There are a large number of real estate agencies or individual agents throughout the world.  With the proper training it is possible for just about anyone with the ambition to make a profit selling real estate.

keywords: #Real_estate_appraiser, #DFW, #Tarrant, #Johnson, #Dallas, #home_appraiser, #home_appraisal, #Property_appraiser, #home_value, #real_estate_appraisal, #Appraisal, #Appraiser, #Home_size, #Arlington_Tx, #Mansfield_Tx, #foreclosure, #property, #Home, #House, #Real_Estate, #Measure, #house_size, #House_square, #square_footage #hard_money, #Loan, #Mortgage, #Refinance, #subdivide, #For_sale_By_Owner

Article Body:

There are a large number of real estate agencies or individual agents throughout the world.  With the proper training it is possible for just about anyone with the ambition to make a profit selling real estate.  

If you have or are interested in obtaining a real estate license there are a number of ways to help maximize your potential profits.  The majority of successful real estate agencies have a company website.  A real estate website will help you get your business name out into the public.  There are also a number of individuals who use real estate websites to search for a home that is in another state.  Websites are extremely helpful to these people because it allows them to search for and purchase a home without having to make multiple long-distance trips.  

To have a real estate website you do not have to be experienced in web design.  There are a number of other professionals who can do it for you.  Acquiring the services of a real estate website design company will cost money; however, it is money that will be well spent.  Even if you can develop a standard website you may still wish to use the services of a real estate website design company.  Individuals or companies who operate a real estate website design service are often fully trained and experienced in producing quality work.  Depending on who you use to build your website, a website developed by a professional will generally turn out a lot better than one developed by an everyday individual.  

Once you make the decision to acquire outside help from a real estate website design company you will need to find one.  There are a large number of web designers that are looking for work; however, you should carefully examine each individual or business before officially obtaining their services.  

Each designer will likely charge a different rate for their services.  You should compare the fees of a wide variety of different real estate website design companies before selecting one.  When pricing comparing you should also keep in mind that each individual or company will have different levels of experiences.  To find a quality website design company you should also examine the quality of their work.  A reputable and experienced real estate website design company will be more than willing to show you examples of their past work.  Viewing completed projects is a great way to determine if you will be getting your moneys worth when selecting a person to do business with.  

The best way to learn about the different real estate website design companies is by doing an internet search.  Almost all website designers will advertise their business online; therefore, this may be your best way to develop a list of multiple website designers.  When you visit the website of a design company you should fully examine their own website.  This will give you a good idea on the quality of work that they will be likely to produce.  

There are a large number of website designers; however, there are limited number who have experience designing real estate websites.  If you are interested in producing a quality real estate website you should hire the services of an individual or company that acts as a real estate website designer or at least has some experience in real estate design.

Title: 

Fractional Ownership - Exit Strategies

Word Count:

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Summary:

Fractional ownership schemes are marketed using the advantage  that fraction valuations are underpinned by the value of real estate. However as soon as real estate is put into a fractional ownership scheme it will no longer be valued in the same way as it would have been as a complete unit.

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Article Body:

Fractional ownership schemes are marketed using the advantage that fraction valuations are underpinned by the value of real estate. However as soon as real estate is put into a fractional ownership scheme it will no longer be valued in the same way as it would have been as a complete unit.

When is Real Estate Not Valued as Real Estate?

Answer: When it is part of a fractional ownership scheme!

This is not always a bad thing, because resale fractions could (and sometimes have) been valued at more than their fraction of the original real estate value. However a proper exit strategy is required to cope with the possibility that the fractional valuation may be less than the value suggested by the underlying real estate.

Why is Real Estate a Good Long-Term Investment?

Real estate has proved such a reliable investment over the long term (ignoring the last year or so) because:

1. It is "produced" using a scarce/finite resource - land. This has a greater effect in crowded countries like the UK but is true to a greater or lesser extent with all locations.

2. It has an enduring utility value. Everyone needs a place to live. Even properties in typical vacation locations have this utility value, since they can be used by the support staff that are needed to run a resort.

3. Unlike most investments, you can borrow to buy it. This gives the potential benefits (and losses) of investment "gearing".

Why Are Fractional Valuations Different?

If you compare a fractional ownership unit with the above you can see that point 1 is still true, 2 is not (or is much reduced) and 3 is difficult to achieve (perhaps more so with the recent credit problems). The fractional ownership unit will be owned with other people and probably looked after by a management company. Part of the valuation of the fraction will be based on the perceived quality of these external factors. In some circumstances these external factors could push the valuation of the fraction below that suggested by the underlying real estate value. In this case an exit strategy/contract clause is required to safeguard the fraction owners investment.

The Exit Strategy

I would personally advocate a winding-up clause in fractional ownership schemes, to enable re-alignment with the underlying real estate value after a specified number of years(if advantageous). In this case the fractional ownership scheme could only continue if all fraction owners agreed to another period of ownership.

Alternatively it would be possible to specify a clause in the fractional contract that would permit termination of the scheme with the agreement of a specified number of fraction owners.

Either of the two approaches above make sure that the investment interests of fractional owners are protected by the underlying asset value.