I will say, to their benefit however, that getting an appraisal does seem to be the most reliable way to look at home values, by far.
It is helpful to sit with an appraiser and go over the details of what they value or at least how they come to the conclusions they do. The appraisers have many guidelines to adhere to and as of late have been scrutinized on practices because of the unscrupulous few who have abused the system.
There are several online sources for home values, but none of them take into account certain features of the home, landscaping, upgrades, etc. that could increase or, in some cases, decrease the actual value of the home. The appraiser can see, walk through and get a good feel for the property and its condition, surrounding neighborhood, etc.
So, what's my investment property worth?
Well, I plugged in the property address and walah! out come property values...like they should be written in stone. As if to say, "your property is worth this amount and you can take that to the bank." Not so fast.
Try some of these on for size. It is fun is to compare the same exact property with the same exact information on each site. Chances are that you will find some differences, in fact, wild variances in price.
Lets take a look at what I found.
Zillow.com My Investment Property Valued at $ 602,282. Domania.com Value Ranged from $ 537,000 to $ 684,000. Ask a buyer to accept that range, or a lender for that matter. RealEstateABC.com Valued @ $ 541,000.
Add to the mix a buyer offering $500,000.
Well, it has been on the market for months and no bites. So is the property worth what that someone is willing to pay? Or what I'm willing to sell it for, or what the online sources say it's worth?
Well, the appraiser, of course, will have the final say in the matter, but the premise rings true. These online sites while they are very interesting and may at least get you in the ballpark, going from the lowest to highest variance spanned over $184,000.00
That’s a B I G Ballpark. Before spending the money for an appraiser, another helpful report that I use often is a CMA Report from your local and trusted Realtor.
Comparative Market Analysis (CMA) gives a listing of homes in the area, similar to yours.
Keep in mind that it does not take into account FSBO (For Sale By Owner) Sales so the numbers may be inherently skewed. For full record on FSBO's refer to the official tax records.
The CMA compares your "subject property" against the other similar homes and can be broken down into "Active", "Pending" and "Sold" Listings in the area. The pending, while interesting is not as helpful because will not list the amount of the agreed upon contract price. Pending will only offer the listing price of the home.
Note also, that appraisers will usually only consider "sold" properties as true comps for your subject property. They will take into account current "active" or "pending" listings but the sold properties are the ones that will pull the most weight.
Just make sure you get your realtor to select the appropriate parameters per your request. This sounds like a simple request but I can't tell you how many times this has not been followed per my request.
Know what you want before you ask for it and you will have more success.
For those of us who have enjoyed income from investment property over the last few years, the ground is looking a little shaky to say the least. Houses prices have slumped, interest rates have risen, the cost of living has gone through the roof and people are extremely wary of buying, selling or even renting property due to the current economic situation.
However, while home owners may complain about losing several thousand pounds on the value of their investment property, spare a thought for the owners of Canary Wharf. The value of their portfolio of property has dropped by 500 pounds million in just over a month, according to their latest release of figures.
Much of this has been due to the collapse of some major businesses that were leasing office space in Canary Wharf. Lehman Brothers were renting office space from Songbird's portfolio of investment property at a rate of 41 pounds per square foot that was due to rise later this year to 53. pounds Lehman Brothers lease was due to run for another 25 years and this will lead to a vast hole in the rental income for landlords, Songbird.
It is hoped that this will be largely turned around after Asian financiers Nomura implement their proposed takeover and will be looking to employ much of Lehman's ex staff. Though it is unlikely that they will take on all of Lehman's staff, a good proportion will be back in paid work very soon and they will be needing office space - so hope Canary Wharf landlords.
All office space across London has dropped by up to thirty per cent in the last year due to economic difficulties but Songbird still have over 99 per cent of their investment property on Canary Wharf let, which means that they, at least, have hope of riding out the storm.
Of course, these bigger companies will lose a lot more money than the average man in the street because of the fact that they have more invested more money in the first place but losing a little can have a much more devastating effect on the average person who cannot afford to lose a penny. The majority of properties are not investment property but have been purchased as a family's main home and when the credit crunch bites so hard that mortgages can no longer be afforded, repossessions happen and families are homeless.
This then puts the onus on local authorities to re-house people but they are already under enormous strain trying to house immigrants and the poor or homeless. Because of this, local authorities often turn to housing associations and even private landlords to re-house the people on their lists. This is all very well while private landlords can still afford to keep property that they rent out but this isn't looking promising either.
This is a dilemma that many people have seen coming for ages and it is frustrating to see the executives of the big financial institutions raking in ever higher bonuses. What most of us would like to know is what these bonuses are for, how the banks can afford them when they are all struggling, where this money is coming from and why isn't it being ploughed back into the system to ease the situation?
At the end of the day, the average man is pretty much helpless in the face of these financial difficulties and we are left using our own judgement on how to keep our heads above water but we do have the option of how we vote when it comes to how the government deal with this crisis.
Both Michelle Garcia & Shaun Parker are contributors for EditorialToday. The above articles have been edited for relevancy and timeliness. All write-ups, reviews, tips and guides published by EditorialToday.com and its partners or affiliates are for informational purposes only. They should not be used for any legal or any other type of advice. We do not endorse any author, contributor, writer or article posted by our team.
Michelle Garcia has sinced written about articles on various topics from Real Estate, Health and Sell Home. Michelle Rene Garcia is the Founder of www.AvoidRealEstateNightmares.com, an investment training company that provides monthly resources for real estate investors looking to protect their wealth and make wise investment decisions to build their fortune. P. Michelle Garcia's top article generates over 12100 views. to your Favourites.
Shaun Parker has sinced written about articles on various topics from Online Marketing, Auto Insurance and Wedding Bells. Shaun Parker is a leading financial expert with many years of experience in the property markets. Find out more about at. Shaun Parker's top article generates over 246000 views. to your Favourites.