3 Myths vs Realities in the Home Valuation Code of Conduct
July 2nd, 2009
Categories:Real Estate News
The Home Valuation Code of Conduct (HVCC) took affect on May 1st, 2009. Since its implementation lenders, Realtors and appraisers have been making a lot of noise over the new rules and are starting to petition its reversal.
The Appraisal Institute recently published an article attempting to clear up the misunderstandings surrounding the HVCC. They do this by listing the myth they are attempting to bust and then the “Reality” as they see it.
Lets look at some of their explanations in closer detail. Here is the link to download the Myths and Realities pdf.
Here are 3 of the myths they chose to “bust”:
- HVCC Requires Lenders to Use Appraisal Management Companies
- Loan Officers are Prohibited from Communicating with Appraisers
- Licensing of an Appraiser Ensures His or Her Competency
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Market Value vs Market Price
June 23rd, 2009
Categories:Home Buyer Education
Appraising a home is a very detailed and methodical way to reach an opinion of value. While an appraiser is skilled at acquiring the most relevant amount of information possible and using that information to determine the value of a home, there is always a human factor involved with the market price.
To put it simply, a home may be valued at a certain, number but it will always be the home buyer that determines the price it will sell for.
Market Value
The goal of an appraiser is to estimate the most probable price a home will sell for in the current market, this is referred to as the market value. The market value has three assumptions about the transaction.
- The sale occurs in an open and competitive market
- The buyer and seller both act prudently and with knowledge
- The market value depends on the price not being affect by unusual circumstances
These additional factors are essential to determining Read the rest of this entry »
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Appraisal Resources
June 23rd, 2009
Categories:Home Buyer Education
Here are a list of website with information regarding the appraisal industry.
Websites
- American Society of Appraisers
- American Society of Farm Managers and Rural Appraisers
- Appraisal Foundation
- Appraisal Institute
- International Right of Way Association
- National Association of Independent Fee Appraisers
- National Association of Master Appraisers
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Three Approaches to Real Estate Value
June 23rd, 2009
Categories:Home Buyer Education
Appraisers use three methods to determine the value of a property. Depending on the property, each approach will be more relevant or less relevant to the value of the property. Appraisers will often use a process called Reconciliation which takes into consideration how well each approach applies to the property being appraised.
Here are the three approaches to value:
- Sales Comparison Approach
- Cost Approach
- Income Approach
Method 1: Sales Comparison Approach
This is also known as the market data approach and is Read the rest of this entry »
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The 9 Principals of Value
June 23rd, 2009
Categories:Home Buyer Education
Numerous economic principles can affect the value of real estate. These are great principles to keep in mind when purchasing and remodeling a home. Where you invest your money can have a large impact on the amount it increases the value of your home. The most important principles are listed below.
9 Principals of Value
- Anticipation
- Change
- Competition
- Conformity
- Contribution
- Increasing and Diminishing Returns
- Regression and Progression
- Substitution
- Supply and Demand
Anticipation
According to the principle of anticipation Read the rest of this entry »
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