Vicky Chrisner

There is a difference between "appraisals" and "assessments" although the words are commonly used interchangeably. A educated consumer knows the differences:

Assessments

• Completed using an automated valuation program.
• Generally done once per year.
• Used to determine real estate taxes.
• Should be within a margin of error of +/- 10%.

Appraisals

• Done by licensed appraiser who looks at the home, and comps.
• Values property "real time" (as of the date of the report).
• Used to support sales prices or loan amounts.
• Should be as close to Fair Market Value as possible.

Fair Market Value is what a willing buyer will pay for a property of a willing seller in an arms length transaction. Fair Market Value is determined SOLELY by the buyer and seller, and will be reflective of the market conditions. If a seller is stuck on obtaining an unrealistic price for their property, it will not sell. If a buyer is stuck on purchasing below reasonable values for the market conditions, then he will not buy. When these two parties meet in the middle they will find Fair Market Value, and each will accomplish his goals.

Appraisals are often part of the sales process, but usually after a price has been agreed to between buyer and seller... appraisals attempt to support the price of the purchase so that financing can be obtained. Assessments are not part of the equation, except when the purchaser attempts to estimate his costs to own the home, and he is determining the taxes due for the property.

Attention: Buyers and Borrowers There IS A DIFFERENCE!

A lender is a specific lending institution, often times a bank, that lends their OWN money. When they pre-qualify you they are using the actual, real time standards that institution has in place. A pre-qualification means something. An approval means something. It means the person that has the money has agreed to give it to you.

A mortgage BROKER does not have any money to lend. A pre-qualification means that they THINK they can get a loan for you SOMEWHERE. The approval from the actual lender will generally come at the very last moment, and when it does the loan program may look very different than what you originally discussed.

When getting loans was easy, using a mortgage broker offered an advantage because they could look at all the products available on the market, and (theoretically) find you the best loan available - no matter who was offering it.

But, today, with loans being harder and harder to obtain, and guidelines and programs changing by the minute, you need to be talking to someone as close to the source of money as possible. When lenders change guidelines or discontinue a loan program, it is their own people who learn of the changes first; and their own people who have opportunities to close loans in progress under those programs. Any broker planning to use the same exact loan program runs a higher risk of not being told as changes are taking place, and of the programs vanishing before the loan can be securely placed and approved. Plus, many banks are considering brokered loans higher risk, since they do not know if that broker operates under the same standards that their employees do.

In my opinion, with our current climate, I do not recommend attempting to get a loan through any mortgage broker for any transaction that is critical or time sensitive (like a home purchase). For refinancing, it is less risky to consider a mortgage broker.

You also want to use only reputable lenders. I recommend you speak to your real estate agent to get a referral... even if you're not buying, but just refinancing - ask your favorite real estate agent for a referral to their most trusted lenders. Remember, without a good lender, a real estate agent may never close a deal. They need to keep lenders who are trustworthy and knowledgeable very, very close to them. Conversely, those loan originators work hard for those agents that are sending them business....they know that messing up ONE loan could cost them the potential of a lot of future business from that agent. As the consumer, you can benefit from that relationship.

Did you know?

• Approximately 25% of properties that are listed for auction are sold PRE-auction.
• Approximately 30% of properties that are listed for auction are sold AT the auction.
• Approximately 30% of properties that are listed for auction are sold POST auction.

If you are considering purchasing a home or investment property through a real estate auction, read these posts... they will demystify most of the process for you.

• Introduction to our "What Buyers Should Know About Auctions" series
• Part 1: Where is the Auction Held?
• Part 2: Types of Auctions?
• Part 3: What happens at a Foreclosure Auction?
• Part 4: "Retail" Real Estate Auctions
• Part 5: What Agent Should I Hire?

There are many variables, but hopefully after reading through these posts you are able to understand the processes most commonly in use right now... please don't hesitate to contact me with questions; or for referrals to local auctioneers or REALTOR/auction specialist buyer agents in your area.

Since May, the number of home sales in Loudoun have been up considerably when compared to the same month in the prior year. Check out this chart, showing the number of sales (month by month) for 2007 compared to 2008 (courtesy of the Dulles Area Association of REALTORS):

As of October 31st, for homes priced under $500,000; the inventory level rose to a 5.5 month supply. For homes priced between $500,000 and $700,000, the supply level is holding steady at approximately 9 months. For homes priced above $700,000; the market continues to remain stagnant; rising to an 18 month supply. And for homes with prices of seven digits or more, there is an overwhelming 36 month supply of homes.

Post Election Comments....

The last couple of weeks of October, it certainly felt to me like our local activity level slowed a bit as neighbors were drawn to the television wondering what bank would fail next, what the stock market would do and which Presidential Candidate would solve the economic problems of the world.

Now that the election is over, I heard agents across the country breathing a sigh of relief, almost immediately, as they reported an increase in buyer traffic to their listings. I am getting more calls from buyers, and suspect that the year will finish strong, although I still feel hesitancy in many sectors of the market.

Here in Loudoun and neighboring areas, we expect to be hit with a large activity level as the "changing of the guards" takes place over the next few months. Northern Virginia always has high activity levels following elections, especially when there is a change in party. At the same time, I expect buyers to focus on buying homes that suit their needs, foregoing unnecessary luxuries. Families making over $250,000 have seen much of their perceived wealth disappear with the changes in the economy, and many fear coming tax changes promised by President Elect Obama. This will keep them from spending more than necessary on homes; and further delay recovery in the top sector of the market.

MORE RESOURCES...........

See comments on previous months' stats in Loudoun County:

• September 2008 Market Statistics for Loudoun
• August 2008 Market Statistics for Loudoun
• July 2008 Market Statistics for Loudoun
• June 2008 Market Statistics for Loudoun
• May 2008 Market Statistics for Loudoun

Click HERE to view the reports as published by MRIS. Click on News and then on Market Statistics.

To see the graph and other historical reports as published by the Dulles Area Association of Realtors, simply click HERE. Reports are available starting from 1997.

Order a personalized Market Snapshot to give you specific information about the sales activity in your Loudoun County neighborhood! Just Click HERE! This report links to the MLS and reports live data in a personalized format. It takes only about 10 minutes for the report to be calculated and emailed to you once it's ordered.

Auctions are just one more tool, which can be good for both buyers and seller in today's market. As they are being used with increasing frequency, I get more and more questions... and I hear potential buyers saying things that they assume to be true.....but which are completely wrong. Sadly, I also hear inaccuracies about auctions and intimidation with the auction process from real estate agents.

So, as a Certified Auction Specialist, and an agent who works with both buyers and sellers, I thought I should make an effort to educate the public on the process. As it is a large topic, I will attempt to share what I know through a series of posts...which are intended to educate buyers, sellers and the general public.

Learn more - read these posts:

http://therealestatewhisperer.blogspot.com/2008/11/auctions-part-1-where-is-auction-being.html

http://therealestatewhisperer.blogspot.com/2008/11/auctions-part-2-types-of-auctions.html