Appraisal House Blog

I've been reading the articles in the paper and watching the news for the past few days, and I just can't seem to come to terms with this.  My inner conspiracy theorist doesn't have a lot of faith that Hank Paulson is working in the best interests of the common man vs. his Wall Street friends.  This program came out of nowhere, and deliberately intrudes into (and saves) the arena that constantly calls out for less government intervention. 

Additionally, I would rather see how the market works itself out and see how things are in another month or two before adding this kind of debt to our already outrageous deficit.  A typical recession is 17 months, and this bailout could take decades to pay off.  I think that people in Washington have the mindset that "worst case, this breaks this down to only $3,500 per person, and we will sell it in the future and make a profit on it, so it really won't cost anything".  When does the government ever turn a profit?  Additionally, more government employees will be required to oversee and administer this mess, adding to the cost.

I love the provision for "steep taxes" against compensation over $500,000 to top executives of participating firms.   have great faith that the folks that managed to magically tranch risky sub-prime mortgages into AAA paper can come up with a workaround for that one. 

I'm fortunate to be in an area of the country that has not been as hard-hit from the economy as others, and also fortunate that I make a decent living and have some money in the bank.  But while I understand that if the government had not stepped in things could have gotten worse, I also wonder what would have happened if they had never even suggested this bailout.  Now everyone is counting on the government to bail them out instead of finding a solution.  95% of the banks in the country are in no danger of failing, so would they have stopped lending altogether?  Or would they have just stopped lending to those that were poor credit risks, bringing some reason and sanity back to the equation of lending? 

I've done a lot of cold-calling for business in the past 5 years in several different cities, and I've met people in the mortgage industry that should be selling used cars while wearing loud polyester suits or hawking junk on late-night infomercials, but not providing mortgage services.  There have been a lot of "band-waggoners" in the past few years trying to ride the real estate wave, and many of them need to scurry back down their holes, so I don't know that a mild recession is necessarily a bad thing from a long-term perspective.  For the record, there are a lot of appraisers out there as well who made a lot of money inflating values for sub-prime mortgages, and it would not hurt our profession much to lose those people. 

Anyway, it looks like it is going to happen, so it will be interesting to see whether the government just saved a lot of wealthy people from selling their ski lodges by using our money, or if things really open up again and people start buying houses.   I'm expecting the former, but ever hopeful for the latter.

First of all, understand that our job is to determine what the value of the house is "as empty", meaning that we don't particularly care how your furniture is arranged, or the quality of your artwork.  However, that being said, we are human and likely prone to making some subconscious interpretations about how well the house has been maintained.  I will see a neat and tidy house and on some level automatically assume that the owners care about the property and have done the necessary work to maintain it.  (This is not what I assume with a "flip" property, but more on that in another post.)  Conversely, when I see a house with an overgrown yard, or with trash in the yard, rooms and garages piled high with decades of misc "stuff", I have to assume that if it is too much trouble to trim the bushes annually it is probably too much trouble to deal with a dripping noise in a wall somewhere.  So the bottom line is, a cleaner, neater house will never hurt you. 

At the same time, don't go overboard getting ready for an appraisal inspection.  You don't need to put on a new roof, or paint the house, spend $10k on landscaping, or even steam the carpet because the appraiser is coming.

We will usually take photos of the front and back of the house, the kitchen, living areas, baths, and a representative bedroom or two.  So make the bed, put your more personal items away (the things people leave on bathroom counters and headboards when strangers are visiting never ceases to amaze me), shove misc clothes and boxes into the closet, and put the dishes and food away in the kitchen. 

Other things to do? 

• Make your attic accessible if at all possible.  Sometimes they are easy to get to (a pull-down staircase), and other times it is a scuttle hole in a tiny bedroom closet.  For many appraisals, we are required to at least get our head and shoulders into the attic to view it. 
• If you are on a pier & beam foundation, please remove the access panel (if there is one).  Similar to the attic, we need to get at least a peek under the house.
• Make sure that we can see ALL of the house while we are there.  If a door is shut and locked and your teenager/relative/guest is sleeping or has the key, we will have to come back, which means someone is going to incur an additional trip charge and delay the process.  We know it sounds stupid and it's just like all the other rooms, but occasionally it isn't, and we are not going to risk getting sued because we didn't take 10 seconds to look in the room.  As I mentioned above, if you have fashioned a Domination" room or have a stripper pole, all those items are considered "personal property" and don't count towards your value, so we don't care.  Most of us have already seen plenty of strange stuff, so unless you are doing something illegal, it is not going to phase us.
• Let us know if there are any easements or encroachments on your property.  Do you share a driveway?  Is the neighbors fence a foot onto your land?  We will find out eventually, so it speeds up the process to know in advance.
• Make a list of any improvements you have done in the past 2-3 years.  (See my other post concerning "Maintenance vs. Improvements"). 
• For large homes, a set of blueprints is always nice to have.  And it might get us out of your house a little faster!