Priscilla's Bronxville Real Estate Blog

            A real estate appraisal is highly specialized and specific. InNew   YorkState, to be official, a home appraisal must be prepared by a qualified appraiser on a Uniform Residential Appraisal Report form and is his or her expert opinion of the property’s current market value based on comparable recent sales.  It is different from a real estate agent’s “Comparative Market Analysis” or another, less formal and less detailed, estimate of value a consumer can get by plugging a location and some other information into a website.

            Buyers, sellers and refinancers each have a goal that the subject house appraises at their “target” price. This could be the contract price in the case of a sale, or the value refinancers need to get the size mortgage they want.  These days, appraisers don’t often give an appraised value higher than that target amount. The concern is that they will come in lower. Lenders will typically lend 80% of the appraised value. Thus, if an appraisal comes in low, a buyer can be faced with the prospect of making up the difference in cash or trying to renegotiate the price with the seller.  For refinancers, the result is getting less financing than they had hoped and planned for.

One factor that makes real estate appraisals challenging is that each home is unique and the number of comparable recent closed sales is comparatively small. That is, in large measure, because since the Fall of 2008 real estate markets generally have been in the doldrums. Some local real estate markets or segments of those markets are beginning to emerge from the slump, but the number of transactions in most segments remains comparatively small.

Other changes made in response to the subprime crisis have affected the way appraisals are conducted today. Lenders no longer talk directly with appraisers. Instead, they hire an appraisal management company who, in turn, assigns an appraiser to the property.  Here are some tips to help your appraiser help you have the best odds of your property “appraising out”:

1—Keep in mind that although you may be the party paying the appraiser, the appraiser works for the appraisal management company who, in turn, works for, and is trying to protect, your lender, not you or any other party involved in your transaction.

2—Involve your real estate agent. Your agent can find comparable recent sales on the Multiple Listing Service database that will have credibility with your appraiser.

3—Make sure to determine at the very first contact your appraiser makes that he or she does a lot of appraisals in your immediate area. Some appraisal management companies are national and wouldn’t have any way of knowing the difference between the Bronxville PO/Yonkers andBronxvilleVillage. Values often differ from one street to another, let alone one jurisdiction to another.

4 – Make sure your research is thorough. To be considered a “comparable recent sale” it must be within a certain time frame, etc. and its size cannot be more that 15% above or below the square footage of your house. Sometimes, it is easy to find three sales that meet the requisite criteria. Often it is not. It would be a shame for a sale to be excluded because the square footage on the Multiple Listing Service database is erroneous – and sometimes it is. Get a copy of the property card from the Assessor’s Office and see whether the size of the comparable home you want to include falls within the requisite square footage parameters. It just might on the Property Card, though it doesn’t on the MLS listing.

5 – Always prepare documentation to support your target value to give to the appraiser. Your real estate agent can help with this, and either your agent or you should be there to welcome the appraiser and hand over the data you have research to support your target value. Appraisers are members of the Multiple Listing Service, and do their own research, too, but when you have well researched data, they appreciate the help.

Achieving an appraisal that accomplishes your goals is not a “given.” But with some groundwork, some homework and the help of your real estate agent, you can significantly increases your chances of helping your appraiser help you reach your goal.

When the time comes to make and negotiate an offer, many home buyers and sellers get nervous. Being anxious about whether your offer will result in a purchase or sale is understandable, but it’s important to focus on the factors you can control.
For example, it is vital to have done your homework beforehand. Make sure you understand as much about the local market as possible, especially what comparable houses have sold for recently and how long homes are staying on the market. Have your financing up to date, whether it’s a pre-approval or verification of funds for a cash offer. An offer consists of price and terms, such as mortgage and any other contingencies, and a proposed closing date. What is included and what is excluded from the sale also needs to be spelled out.
A negotiation is a successful compromise. It helps to focus on points of agreement first (such as the closing date, what the contingencies will be and inclusions and exclusions), then move on to points where agreement still needs to be reached. How an offer is presented and communicated can make a world of difference and, if expressed as a proposal rather than an ultimatum, success is more likely.
Another helpful approach is for each party to try and see the transaction from the point of view of the other. For example, once the house goes on the market it becomes a commodity, but sellers can’t always be so detached. For their part, buyers are likely to respond to their initial emotional reaction to a house, and might need to revisit it a few times before making an offer. It also helps for buyers to know that only part of the transaction is buying the home. The other part is making it their own.

For the first two months of the year, the Bronxville Village market has seen a pick-up in activity versus the same period a year ago. We are now a market that is more balanced between buyers and sellers than any market we have seen since the Fall of 2008. Eight single family homes plus one townhouse sold between January 1, 2012 and March 11, 2012. During the same period last year, three single family homes plus one townhouse sold. Six co-op apartments had sold and closed by March 11, 2012, versus three during the same period last year. Median and average prices have also risen. Let’s hope this trend continues.

As we enter the 2012 Spring Market, it helps to keep in mind that momentum is one of the factors which can make or break a transaction. Once an offer is made, the speed at which one side responds to the other is often taken as an indication of that party’s interest in moving the transaction forward, and vice versa. Sellers and buyers are sometimes not aware of this, are very busy with other things in their lives, and allow communication between the parties to lag.
Days may pass and the other party begins to wonder what is going on. In reality, there are a myriad of possibilities, but often the other side in the transaction perceives this as a lack of commitment. Buyers may start looking in another town, have second thoughts or may be wondering whether they have sufficient cash to complete renovations they see as necessary. Sellers may be entertaining other offers. Neither side communicates what is going on, but as time passes they not only begin to wonder, they become suspicious whether the other party’s level of interest remains high. They may second guess what the other party is up to and begin to second guess, often incorrectly, why their last communication hasn’t received a response. Suspicion and distrust can skew communication and cause parties to back away when more prompt responses would have avoided this. They can also cause the party feeling “neglected” to harden their position and be less willing to make any compromises that are needed for the transaction to come together.
The solution is to be well prepared before you put your house on the market – or before you seriously look for a house to buy. Then, once you decide to move forward, do so decisively, make it your priority, and make sure the responsiveness you demonstrate indicates to the other side that you continue to be motivated to move ahead. It’s fine to negotiate through several rounds of offers and counteroffers, just be mindful to keep the process moving. As in many other forums, good – and prompt – communication is the key to success.

There has been a feeling of recent pick-up in activity in the Bronxville Village real estate market, and the early 2012 data bears this out. There have even been “bidding wars” on a few single family homes in recent weeks. In mid-February were 32 single family homes on the market plus 11 townhouses. At year-end 2011, there were 23 single family homes and 4 townhouses on the market. Five single family homes and 1 townhouse were under conditional contract in mid-February; 4 single family homes and one townhouse under conditional contract at year-end. The sales of 5 single family homes and 2 townhouses were pending in mid-February versus 3 single family homes and 1 townhouse pending at year-end. The sales of 6 single family homes and 1 townhouse have closed since January 1, 2012. No condo apartments were active on the market at the mid-February point and there none were under contract or whose sale was pending. For co-ops in mid-February, there were 30 active on the market, 8 under conditional contract, 2 whose sales were pending and 5 whose sales had closed since the beginning of 2012, a very small increase over the year-end numbers for this category.
Mortgage interest rates have continued to fall fractionally since the beginning of the year. According to BankRate.com, for a 30 year conventional fixed-rate mortgage, they were at 3.85% versus 3.94% in early January. Fifteen year conventional fixed rate mortgages averaged 3.14% versus 3.28% in early January. Five year adjustable rate mortgages averaged 2.84% versus 2.88% in early January.*
The added vigor shown by the data for the first six weeks of 2012 is a positive omen for the Bronxville Village real estate market. We will continue to monitor, and hope, that this trend is sustained.

*Source of mortgage rates: BankRate.com