Rick Hamilton

I recently completed an appraisal in one of my local neighborhoods for a property that has been on the market for 734 days. Off the bat, I had a feeling that this house was going to be penalized by the market for spending too much time listed. So I dug pretty deep and completed an extensive days on market analysis for the area.

What I found was very interesting and should be important for agents taking on new listings in already saturated markets. Economically speaking, homes that sold under the normal marketing time for this area (93 days, when priced correctly) sold at a higher sale to list price ratio than the norm, concluding they were under priced and may been able to get a little more value out of the home. In contrast, homes that spent over 93 days on the market were also punished by the market by selling at a significantly less sale to list price ratio than the norm, concluding they were over priced. On average, the over priced homes sold for 1.5% lower than the average home price AND had a lower sale to list price ratio by 2%.

In real world numbers, if a $100,000 home was priced correctly in this market it would sell for 94% of that ($94,000) in 93 days. If that same $100,000 home was over priced it would sell for 90% ($90,000). A $4,000 loss in real dollars that didn't need to happen.

A great way to be sure your clients get the most money for their home is to have a state certified appraiser value the property. If you are an agent or loan officer and don't already have a good local appraiser on your team, I recommend you find one. If you are in Southwest Ohio or Northern Kentucky, call me!

I read an interesting article in the Wall Street Journal this morning about the current state of the rental market and the outlook over the next couple of years. Surprising to me, the rental market was down, at an 8% vacancy rate, across the nation. This was largely in part to would be renters moving in with family and young renters who are suffering the most from the high unemployment.

The recession halted credit for new construction in the rental market, therefore forecasters have a positive outlook on the rental demand as supply deceases over the next few years.

With all of this in mind, as a real estate agent, are your sellers open to renting their home versus selling? Single family homes are often the most difficult to determine market rent for due to the lack of public information. A great source for rental data is your local appraiser. If you don't already work with an appraiser in your area, seek him or her out and pick their brain for not only value related information, but rental and market data as well.

Have a great selling week!

Rick Hamilton

As 2010 comes upon us this weekend, many of us will are wishing a not so fond farewell to 2009. Industry changes and the struggling economy left 2009 as one of the most challenging years I have experienced in my short, 6 year tenure, in the real estate field.

Besides the normal resolutions of eating better and habit breaking, I challenge all of those reading to make a conscious effort to "stay local" in 2010. Over the holiday week, I had a chance to do some interesting reading about the struggles of local governments during the economic downturn. As federal money makes it way into the system in the form of stimulus, local governments are sometimes the last to get it.

As individuals we can make a simple effort to try and buy locally in our own communities. Yeah, sometimes you might pay an extra buck buying it at the local store versus the big national chain or online, but remember that money you are spending at your local retailer is being taxed and brought back to you by services of your local government.

As real estate professionals, we can take that one step further. I encourage you to suggest to your clients to use local banks, local home inspectors, and especially local appraisers. If you don't already have a team of local real estate professionals in the communities you work in, I urge you to seek them out.

As 2010 approaches us we can start by securing a strong foundation - buy locally!

Since the inception of the HVCC and the expansion of appraisal management companies (AMC's), a growing concern of geographic competency and its affects on the quality of appraisal reports has emerged.

As AMC's develop, often times they do not immediately register every appraiser in every zip code nationwide. For that reason, many times they ask appraisers to travel great distances to complete appraisal reports for that client.

First and foremost to all non-appraisers reading this post, the appraisal bible (also known as USPAP), requires us to have geographic competency in the market in which we are appraising. In cases in which we are appraising in areas we do not normally cover, we are to disclose this information in our report and state what we did to become competent in that market (ie, worked with a local Realtor, appraiser, etc).

Have any of you had negative experiences in this area? Positive one? I would love to get feedback from you about this.

Moving forward, I urge all real estate agents, loan officers, and other real estate professionals to seek out a LOCAL appraiser and get to know him or her. Real estate appraisers have knowledge about the market that extends far beyond just the value of a home and can be a vital part of your team for not only appraisal work but also as a consultant on valuation and market trends.

Have a great week!