During this time, we want you to know that we’re here to help…
💕 Our hearts go out to our families with children with schools shut down, our parents, grand-parents & great grand-parents, our seniors in assisted living, our neighbors at the hospitals, our local businesses struggling and anyone impacted by this pandemic.
🍊 TBREG was born here in The OC in 2013 and many of our agents were born and raised here as well. We are fortunate to know people who may be able to help you out for a trip to the grocery store, watching children or just someone to speak with to get the facts.
😊 You’ll be surprised how many good people are here locally who are happy to help you. They WANT TO HELP! Its time for our community to rally for good.
📲 Call or email us if you need anything. We can be reached at 888-917-8267 or info@TheBoutiqueRE.com. We can see if we are able to assist in some way or know someone who can help. To see how our business and team are operating for the time being, please visit our Instagram or Facebook page.
These are crazy, unprecedented times. Together, we will get through it.
In the most extreme example, some clients with private jets have begun asking about buying homes on islands and in other isolated areas that they can flee to in case of disaster
As some uber-wealthy homeowners stock up on hand sanitizer and hire cleaners for every showing, others are giving family members power of attorney to ensure a sale in case of quarantine.
The impacts of the coronavirus, the novel respiratory disease that began in China but has spread into an international pandemic with over 140,000 cases around the world confirmed, are just starting to reverberate across the real estate sector. Brokerages have had to close for deep cleaning after some of their agents became exposed to the virus while people in some of the hardest-hit parts of the country are isolating themselves voluntarily and holding off on all buying for the time being.
According to NAR Chief Economist Lawrence Yun, 11 percent of agents surveyed earlier this month saw less buyer traffic while 7 percent reported lower seller traffic thus far.Luxury real estate, which is generally considered to include homes worth between $5 million and $30 million, follows different rules. In 2018, high-end homes sat on the market for an average of 506 days compared to only 80 for an median-priced home. That said, this segment of the industry has not been immune to the fear and financial impact surrounding the novel disease.
Senada Adzem
Senada Adzem, a Douglas Elliman broker working with homes worth as much as $30 million in Boca Raton and other parts of South Florida, said some of her wealthy clients are especially hesitant to hold showings and require much more detail about who is coming into their home.
“We had to convince the seller to allow us to show and register every person who was coming in,” Adzem, whose eight-agent branch has cancelled all open houses until the outbreak stabilizes, told Inman. “After we were done, they had a cleaning team come in and wipe everything down.”
As a result, Adzem’s team has had to screen whom they show houses to not just by the standard ability to afford the property but also by travel history and whether they are showing any visible signs of illness, such as coughing or a fever. Adzem, who fled the war in Bosnia during the 1990s, said that crises like these cause people of all financial and social classes to panic.
She has been striving not only to reassure her clients but work around their fears. In the most extreme example, some clients with private jets have begun asking her about buying homes on islands and in other isolated areas that they can flee to in case of disaster.
“When people are in a panic mode, they think differently and make a different set of decisions,” she said. “As agents, we have to take it seriously and not just pretend it’s not going to impact our business.”
Raj Qsar
Still, the outbreak is not impacting all parts of the country equally. Raj Qsar, the CEO of the Boutique Real Estate Group in Orange County, California, said members of his team have held 20 open houses last weekend and have seen them packed with people each time. They have another 15 open houses scheduled for this weekend and do not expect a lot of changes in traffic due to the coronavirus.
This could be due to Orange County being a particularly hot market. In the area, median sales prices rose by 7.2 percent year-over-year in December while sales inventory is down 36 percent. According to Qsar, many people are so desperate to invest and tap into the market that a national pandemic hasn’t slowed them down — particularly when the stock market is responding to the cancellation of flights and adjustments to the typical workday.
“If people have funds in a 401K and those funds go down, those funds may not be there anymore,” Qsar said. “This is a 30-year opportunity for a three-month incident.”
The California Association of Realtors expects the virus to have some impact on the luxury market as people hold off on buying second homes and investment properties in the face of uncertainty. Qsar has seen both buyers and sellers who are in the escrow process and need to travel transfer power of attorney to a family member or other trusted person. Rather than the fear of contracting the virus, some fear a quarantine, not having access to WiFi and allowing a sale to fall through their fingers
“They may put their masks on, they may bring hand-sanitizer with them but they’re still going to walk into that open house,” Qsar said, adding that he does not expect serious buyers to be deterred by the coronavirus.
McKenzie Ryan
New York City real estate has been particularly responsive to market effects from the virus — the state has seen more than 200 cases of coronavirus and, subsequently, 13 percent of open houses had no traffic at all last weekend. According to CNBC, average open house attendance fell 27 percent in the last week alone — from an average of 5.6 people to 4.1 peopleper event.
McKenzie Ryan, a Compass agent working on high-end properties in Manhattan, said that the New York real estate market is particularly affected by daily headlines. And while that’s having real-world effects, some wealthy buyers are also capitalizing on the situation. She’s seen billionaire clients who normally spend a large portion of their time traveling get landlocked in New York and, as a result, use the extra time to arrange private showings.
“I think people are going to stay focused on their long-term goals and take precautions to keep themselves safe in the interim,” she said.
Real estate agents are using TikTok to take their business to the next level. Here’s how creating content on this popular video-sharing app can help you build your brand and generate leads
Image by Harry CunninghamBY BERNICE ROSSMarch 04, 2020
Would you be willing to spend a few minutes a day to obtain over 100,000 page views for your new listing video? Better yet, what if it cost you nothing? This is what TikTok can do for your business provided you’re willing to jump in and play.
Agents are finally realizing that if they want to remain competitive in 2020, video is a must. The challenge is that producing video requires time, separate uploading to the various social media sites, plus identifying a way to attract page views.
Next-gen social networking: ‘social entertainment’
Emarketer explains that TikTok is a part of a new type of “social entertainment” where users can watch and create short videos. They can also create profiles and interact publicly with a network of contacts, as they do on other social media sites.
It’s this social entertainment element that differentiates TikTok from other social media channels and has led to the app being installed nearly 1.6 billion times.
An article from Inside Hook explains why this is happening:
“The platform is currently the best way to reach young people, as they’re the age group using the app more than any other (60 percent of its users are ages 16 to 24). If you’re looking to get a message across to the largest (about 1.5 billion) and, arguably, most influential group of consumers, a short 15-second TikTok video is, at the moment, the fastest way to do that.”
7 reasons TikTok matters for your business
When you first visit TikTok, you’ll probably wonder how a site that features Gen-Z users dancing to trendy music — like the viral “Renegade” dance challenge — could be relevant for real estate. Here are seven reasons TikTok should matter to your real estate business.
1. It hits the sweet spot for millennial buyers and sellers
In terms of TikTok’s users, 26 percent are between the ages of 25 and 44, the sweet spot for today’s millennial buyers and sellers. The average user spends 52 minutes a day on the platform and opens the app eight times throughout the day.
2. It generates insane amounts of free organic traffic
Gary Vaynerchuk argues that TikTok and LinkedIn are the two places that give you amazing organic reach that don’t happen on platforms like Facebook, Twitter, Instagram and YouTube. He likens it to buying real estate in Manhattan in 1898, long before it became incredibly valuable. Vaynerchuk recommends posting a minimum of four videos per day.
To illustrate this point, Alisa Glutz, a Scottsdale mortgage broker and author of Color My Credit, decided to “go play in the sandbox” over at TikTok because her two daughters and their friends were all avid users. Her experience illustrates how powerful this app can be for real estate.
In less than 60 days, she generated over 4 million page views, 455,000 likes and 77,000 followers. Today, at the 90-day market mark, she has generated over 8.4 million page views.
TikTok has also generated leads for her mortgage business, in addition to becoming a referral source for her clients who need the services of a real estate agent. What’s more, she sold 800 copies of her book in only one week. Before TikTok, it had taken her three years to sell that many books
3. It’s about the moms
Glutz was surprised by how many adults are embracing TikTok. What’s fascinating is that the teens who have seen Glutz’s “Color My Credit” videos are going to their moms and saying, “Mom, I don’t understand what she’s saying, but I think you should watch this.”
In other words, what teenagers see on TikTok has the potential to influence their parents’ approach to the listing or buying process.
4. It provides genuinely helpful information
Glutz uses text boxes to provide her message. “How to Create a Great Credit Score” has garnered 845,600 views:
A different approach is to explain a topic without the music. “How to Handle Late Payment to Get It Removed” has received about 674,100 page views. (Note that Glutz has two additional videos in this series. The total length of the three videos is only 45 seconds):
5. It’s a syndication hub for other social media platforms
According to Raj Qsar, the CEO and founder of The Boutique Real Estate Group, TikTok allows you to syndicate your TikTok videos to other social media sites with a single click. You can also cut and paste your link to IGTV (Instagram TV) and YouTube.
6. It’s a great tool for brand building
When Qsar first began using TikTok, he was receiving about 200-800 views per post.
Once Qsar figured out that TikTok did not have to be so formal and that you could use trending dances and popular music, his view count climbed into the thousands. Here’s an example of how TikTok provides exposure for his brand.
Jeff Pfitzer heads up a USA Mortgage team in St. Louis and has been training the real estate agents he serves to use TikTok. Pfitzer explains that your goal is to reach the local micro-community that would be interested in buying or selling where you do business.
Both Pfitzer and Qsar agree that your TikTok videos work as tease for your listings. Once viewers see your TikTok video, they can then “swipe up” to your Instagram, Facebook and YouTube pages, where you can share longer videos. Since your buyers and sellers are on these sites, this is where the lead conversion actually occurs.
Because of its global reach, TikTok can also be a powerful resource for generating international real estate leads as well.
Real estate’s most successful TikTok user
Aaron Grushow, a 23-year-old Compass agent, has probably garnered more page views than any other real estate professional on TikTok. His posts typically receive at least 50,000-100,000 views. His goal is to establish his brand and generate leads.
Grushow shoots 15-second videos highlighting lavish multimillion dollar estates in Beverly Hills, Bel Air, and Malibu. The following video has garnered 1.7 million views:
Like Glutz, Grushow has also had great success creating videos where he personally delivered a commentary. This video has received 5.5 million views and 1.7 million likes.
Grushow’s videos illustrate how amazingly powerful coupling unusual content and the right music can be. The following video is set to the theme for Jaws — something that Gen X-ers and Boomers would recognize, but many younger people wouldn’t know. It generated 4.2 million views.
When Grushow created a second video on the same subject and paired it with a trending TikTok song, the page views jumped to a whopping 48.5 million with 6.5 million likes!
Will TikTok become the next big social media site for real estate?
“Social entertainment” is probably here to stay. The question is: Will TikTok emerge as the dominant player over today’s social media sites or will it go the way of Snapchat?
No matter what, jumping on TikTok now can give you a significant edge over your competitors. If you need help figuring out how to use it, find a teenager to help you — renegade anyone?
Bernice Ross, President and CEO of BrokerageUP and RealEstateCoach.com, is a national speaker, author and trainer with over 1,000 published articles. Learn about her broker/manager training programs designed for women, by women, at BrokerageUp.com and her new agent sales training at RealEstateCoach.com/newagent.
Everyone in Hollywood wants to be famous – even the houses. The Boutique Real Estate Group founder Raj Qsar is merging entertainment and real estate to give each home’s story some screen time.
On the set in Hollywood with Cheddar TV Raj Qsar, Max Godnick & Alyssa Julya Smith
As I walked into the lobby of the Cheddar Los Angeles TV building in #hollywood this morning I was hit with a huge neon sign that read, “do what you love.” 💡 My mind travels 100 MPH in a 55 MPH world so it is difficult to pause, reflect and take it all in and realize that I am doing what I love. So I made the most of my 6 minutes on the air today with co-hosts Max Godnick and Alyssa Julya Smith on CheddarTV 📺 chatting about my journey in real estate, video marketing, and social media. When we were done I just wanted more. I was like, “it’s over? Ask me more?” So what’s next? Video clip coming soon… 😉
Catch video pioneer and real estate influencer Raj Qsar on CNBC Squawk Box chatting about the influence of video marketing with his real estate company. Homes selling for more money and faster using highly produced and directed video marketing.
Raj Qsar on CNBC Squawk on The Street
Raj’s story goes a little something like this. Beautiful design evokes emotion. Emotion stirs the soul and creates a connection between client, agent and the home buying or selling process. The Boutique Real Estate Group has invested heavily in bringing all aspects of the real estate experience completely in-house. From custom design, professional staging, architectural photography, award-winning cinematography, and social media to technology, internet optimization, cloud-based transaction management, and global listing syndication. This not only provides The Boutique with complete control of the design, marketing & technology of luxury real estate but also gives them the look & feel of a true boutique marketing agency. This design & tech-forward approach has earned The Boutique Real Estate Group accolades & awards worldwide.
Shooting a music video to showcase, then sell, a home in West Hollywood, Calif. Production budgets for these films can range from $3,500 to $70,000.Credit…Ariana Drehsler for The New York Times
Raj Qsar is eyeing the sky nervously. It’s early afternoon in Corona Del Mar, Calif., and his six-man camera crew is on the clock only until sunset. But clouds are rolling in fast over this wealthy Southern California neighborhood, and the next scene on today’s docket — a glamorous drive down the Pacific Coast Highway followed by a beachfront double date — is now feeling tricky.
On other film sets, the producer and director might huddle and order a break, or call it a wrap until tomorrow. But Mr. Qsar isn’t a director — he’s a real estate agent. And the star of his film is not a good-looking young actor (although there are four of those on set), but rather, a $1.7 million Orange County home. This short and sudsy film, he hopes, in which two young couples drink wine, play board games and wander through sleek, neat rooms, will do the trick to attract a buyer.
“Telling stories and creating connections with people takes more than just photos,” said Mr. Qsar, who heads a luxury brokerage called The Boutique Real Estate Group. “For us now, it’s all about the power of video.”
Video marketing is not new territory for home sales — wide-angle walk-throughs of staged living rooms and sweeping drone footage of leafy neighborhoods have become common tools in real estate agents’ kits. But cinematic mini-films, complete with paid actors, lighting crews and full-fledged story boards, are something new.
Mr. Qsar began dabbling in cinematic videos in 2008, just two years after leaving his job as a pharmaceutical sales representative to jump into the Orange County housing boom. He came across a wedding videographer who was producing emotionally charged, story-driven films for brides and grooms, and, he says, a light bulb went on.
“I had an idea about telling the story the same way, but as the story of a house,” he said. “One of the things I always tell my clients when they walk through is, ‘Can you see yourself having Christmas dinner here or birthdays and bar mitzvahs here?’ I wanted to really pull out the emotional aspect.”
After putting the wedding videographer on his payroll and investing $20,000 of his own money in video equipment, he made a handful of short film promotions for homes in the $1 million to $2 million range in Orange County, including a four-bedroom Mediterranean-style estate in Villa Park.
On set in Corona del Mar, CA USA The Boutique Real Estate Group
In that video, images of a young blond wife sitting at a piano and singing Frank Sinatra’s “Summer Wind” are spliced with images of a Porsche-driving husband arriving home from work. As he showers upstairs, the wife ushers in a flock of eager friends and children with balloons and sets up a surprise party by the pool. The song reaches its crescendo, the husband descends the stairs, and there’s his family, there’s a cake, and there’s a sweet, picture-perfect backyard celebration.
When that home sold, for $1.7 million, it set a record as the most expensive home sale ever in Villa Park.
“Once real estate agents started doing high-end video productions, putting in models and actors was a no-brainer,” said Jimm Fox, president of OMM Video Marketing, a Canadian agency that tracks trends in cinematic storytelling. “You’re not just selling an address, you’re selling a lifestyle. And to do that, you need humans.”
Production budgets for these films can range from $3,500 to $70,000. Often the real estate agent is picking up the tab, but in some cases, agents discuss their plans with sellers and agree to split the bill or have the costs added to their fees.
Mr. Fox said the trend for Hollywood-style videos kicked off around 2007 and was a natural progression from the lush but empty footage of staged homes that preceded it.
“Real estate at the high end is always an aspirational sell,” he said. “You want to showcase a lifestyle. So you start shooting homes, and then you add models to make it more vibrant, and very soon you want to turn it into a story.”
The Australian production studio PlatinumHD claims to have been the first to produce these Hollywood-style real estate films. In 2011, the studio helped the trend spread internationally by producing a video for the Queensland-based property management firm Neo Property.
In it, a young woman clad only in a lacy bra and panties and bound to a chair inside a hyper-modern luxury home, makes an emergency call for help and is asked to describe where she is. As she describes the home’s chef’s kitchen and waterfront views, its in-house movie theater and its private elevator, a SWAT team descends to rescue her, led by none other than Neo Property’s real estate agents themselves.
Photo Credit: The Boutique Real Estate Group 446 Morning Canyon Rd, Corona del Mar, CA USA
The film, of course, is as much about the appeal of the model as the home. But by using sex, helicopters and shots of a gleaming red Corvette to sell the property, Neo made it quite clear: In this sort of marketing, peddling a fantasy can help close a deal.
Ben Bacal began adding actors to his listing videos in 2014. The Los Angeles-based agent, a former film student who also dabbles in internet companies and has more than $2 billion in sales to his name, is a fixture on the high-priced home circuit in Hollywood. He offers his clients a professionally produced video for every home he agrees to represent, and he estimates that in 40 percent of those cases, he includes actors and a story line.
Some are sweet: A home in Bel Air, which he listed in March 2016 for $48.5 million, shows a brother and sister channeling their best Ferris Bueller impressions, faking sickness in their custom bedrooms before dashing out to their backyard infinity pool with skyline views after their parents head off to work. (The home sold for $39 million in December 2016.)
Others are more slapstick, like the film for a home on Rising Glen Road in Los Angeles (the house where the actress Brittany Murphy died), in which an adorable corgi named Sherlock Bones inherits the mansion listed for $18.5 million and heads there to live his best canine life. (That home sold in 2017 for $14.5 million.)
In all of Mr. Bacal’s videos, plots are thin but visuals, and humor, are laid on thick. That’s intentional, he says.
“Instead of telling a long dramatic story, I like to pull characters through the house and do something that makes it voyeuristic, where you can see the property. Focusing too much on story takes away from the home,” he said in a phone call from Mykonos, Greece, where he was on vacation. “I’m not Quentin Tarantino.”
His greatest triumph to date is a home on Hillcrest Road in Beverly Hills. Markus Persson, the Swedish video game programmer behind Minecraft, saw the short film that Mr. Bacal produced for the eight-bedroom, 15-bath home, showing two young women arriving in a Rolls-Royce and enjoying the home’s features, which include a candy room and a 24-seat theater. Beyoncé and Jay-Z were also reportedly interested in the property, which was priced at $85 million. Just seven days after seeing the film, Mr. Persson purchased it for $70 million.
Photo Credit: The Boutique Real Estate Group Kerrigan Ranch, Yorba Linda, CA USA
Mr. Bacal credits his success to his ability to not just create compelling footage, but also to distribute it effectively.
He pours cash into boosting the films on YouTube, advertising them across Facebook, Twitter and LinkedIn and promoting them in the right markets. In Mr. Persson’s case, Mr. Bacal had made the decision to promote the mansion not just in the United States but also in Sweden, a decision that paid off.
“It’s not just about creating a 90-second video. It’s also about knowing how to use video to effectively market that property. And that’s going to mean breaking it up into smaller components and using social media platforms to promote it,” said Mr. Fox, the Canadian marketing executive.
It makes sense that Hollywood-style promotional real estate is hitting a peak in Southern California, said Jonathan Miller, a New York City-based real estate appraiser and consultant. That’s because the high-end market from Los Angeles to San Diego is flush with inventory, creating longer marketing time, reduced foot traffic at open houses and greater competition between agents.
“In a market where there’s escalating supply but still anchored to another time, the sellers are trying to market much more creatively,” Mr. Miller said. In his mind, the sleeker and more expert-looking the video, the more likely it is that the seller is trying to justify a high price tag.
“When I see these videos, or something like a camel at an open house, that’s a clear sign of something that’s overpriced,” he said.
Mr. Qsar, the Orange County real estate agent, produces a video for every home that he represents, spending from $2,500 to the low six figures to produce them. He pays out of his own pocket. While he has had eight-figure listings, most of his sales are in the $1 million to $2 million range.
“Fifteen years ago, I never thought I’d be shooting films,” said Mr. Qsar. “I had a day job and just wanted to sell a couple houses and see what happened. But then I sold 10 and then 15 and 20, and then social media hit, and I thought, ‘O.K., how can I be different?’”
In the hypercompetitive world of Southern California real estate, he said, it’s worth it because his videos give him a definitive edge.
“Our listings are recognizable before they even hit the market, because people see them on social media,” he said. “So now, every time I get together with my team on a house, the first question we ask is, ‘What is the story going to be on this house?’”A version of this article appears in print on Nov. 16, 2019 in The New York Times International Edition. Order Reprints | Today’s Paper | Subscribe
BRING YOUR OWN PUMPKIN Please join us for a Pumpkin Painting & Carving Party! Free event! Fun for the whole family. Art supplies will be provided. Taco Cart & Soft Drinks provided.
The event is located at the Lakeview Field in Yorba Linda! Park in the Foxfield Neighborhood on the Corner of Lakeview Ave & Bastanchury Rd (Churchill Downs Dr or Temhurst Court) and walk towards the end of the cul-de-sac to the dirt path to access field.
Sunday, October 20th from 3-6 pm
Call or text Christina at 714-501-8585 for more info and details.
2. Attend & be present in as many sessions as you can possibly attend! DO NOT MISS ANYTHING. Specifically, look for the sessions that pull you out of your comfort zone and will challenge you on a personal & professional level. See the full schedule here and meet the speakers here. This year catch Molly Bloom on the main stage sharing the story of “the most exclusive high stakes underground poker game in the world.” 😮
Bonus: Please do not miss CAR’s #womanup on Tuesday at 2pm with Sara Sutachan, Leslie Appleton Young & Debra Trappen. See the full lineup here.
3. Have you joined the Inman Coast to Coast Facebook Group? If not join here for all the latest posts, connections and updates. Hashtag is #ICLV
4. The Party after the Party! Do I need to say anymore? This is VEGAS! Text “PARTY” to 415-818-1555 (thanks Jessie) to find out about all the parties, after-parties and events at #ICLV. We all know the real fun starts after midnight! So just ask around, jump in an Uber (download app here) or Lyft (download app here) and find out where the action is. Check your email for last-minute invites to all the happening VIP parties and events. If you still can not find the party make sure to DM Joe Schutt or Laurie Weston Davis (they will steer you in the right direction, I promise). If you are looking for the top-secret karaoke party then there is only one name you should know 👉🏼 Notorious.
5. Lobbycon! You have heard all the rumors and it is true! You will find everyone in The Aria’s Lobby Bar (open until 2am) and this is the spot where you will meet the CEO’s, Founders, Presidents, movers & shakers all just “hanging out.” Bring your selfie stick & business cards and make sure to say hi. BTW, when is the next time you will be in the same hotel with folks like Brad Inman, Sherry Chris, Sharran Shrivatsaa, Rich Barton, Glenn Kellman, Robert Refkin, Glenn Sanford, Ryan Gorman, Eric Wu, James Dwiggins, Joel Singer, Leslie Appleton Young & Josh Team.
6. Get out of the hotel! VEAGS is an amazing city with sights, sounds, history and killer food! Check out this list of The Best Restaurants in Las Vegas via Thrillist. Then catch a show! Or check out some of the worlds best clubs or pool parties. Jump in a helicopter over the grand canyon or do the superman zipline over vegas. Also, everyone loves a good speakeasy and they are all the rage now in Vegas. Here is a great list to tackle.
7. Stay fit and drink a ton of water. It will be over 100 degrees the whole week we are in Vegas and you will be eating, drinking & sitting in a lot of sessions. Please make sure to stay mentally & physically fit at the hotel gym, or find the local SoulCycle, OrangeTheory, CrossFit Gym, TopGolf or 24 hour fitness. If you are still alive midweek there is a group hitting SoulCycle at The Wynn on Wednesday morning at 7am.
8. Ambassadors. These are the ones who will lead us through
the first ICLV. Joe Schutt & Laure Weston Davis have
been “in charge” of this program for years now and if you have a
question about anything ICLV these are the folks to ask. Have you met them? If
not connect with them here.
🔥If you made it this far and are headed to #ICLV please find me in one of the sessions, lobbycon or at one of the after-parties. I would love to connect with you and hear your story.
A real estate appraisal is a report by a certified inspector that determines the value of a property based on its features and condition. Buyers compare this value to the home price to ensure there is not a large discrepancy. Appraisals are also required by lending institutions to secure loans for the purchase of property.
How a Real Estate Appraisal Works
A home appraisal is an independent report about what a property is worth and how much the buyer should pay for it. To secure an appraisal as part of the homebuying process, the buyer or the mortgage lender researches appraisal companies, determines the best fit based on price and reviews, and hires a company. Once a seller accepts an offer letter, the buyer schedules a visit from a real estate appraiser to determine the value of the home.
To find a qualified appraiser, a buyer typically works either with the lender or with their real estate agent to determine best options. These are reviewed and vetted based on price and testimonials from prior clients. Then the appraiser is selected and conducts a full home appraisal after the seller accepts the buyer’s offer.
During the on-site appraisal of the property, the home appraiser looks for any damage and potentially costly repairs. He or she will also consider sales prices of comparably sized homes in the area to help determine the amount that the house should sell for in the current market. After considering these factors, the appraiser determines a home value that the lending institution uses as the basis for its final loan amount. This also serves to validate the initial buyer offer.
The report of the appraiser reinforces that the house is a sound investment for the buyer and the lending company. If the property is valued significantly lower than the initial offer, however, then the buyer can renegotiate the offer price.
Real Estate Appraisal Costs
A residential real estate appraisal costs between $300 and $400, depending on the area and the company. The cost for a real estate appraisal is determined by the size of your home, the location of your property, and the company you pick to do the inspection.
Elements of a Real Estate Appraisal
A real estate appraisal is comprised of four main parts, including the property description, market information, best use, and property valuation. Collectively, these four pieces are used by the lender to determine the home loan amount.
These are the four main sections of a real estate appraisal:
Property description: This is the section where the appraiser details the basic information about the property―sometimes with pictures―like the number of rooms, square footage, attached land size, and other features unique to the property.
Market information: This area of the report focuses on the neighborhood, trends in real estate in this location, how the market is developing, and what other houses with similar features are selling for in the area.
Best/highest use: The best use section talks about how the property can be used to ensure the property retains its value. For a home, the continued occupation by owners is the most likely recommendation because this is the use type that yielded the current property value.
Property valuation: The property valuation section of the real estate appraisal uses one of the property values approaches below to determine a likely sale amount if the buyer defaulted on his or her loan and the property needed to be resold.
Many people confuse a real estate appraisal with other types of home inspections, like termite or sewage inspections. A residential real estate property appraisal, however, only involves examining the property for foundational or structural damage or anything that might negatively affect an investment due to costly repairs. Determining an accurate valuation is the priority for a real estate appraiser because it is the basis for the bank’s approved loan amount.
3 Ways Appraisals Determine Property Values
Property valuation, which is part of a real estate appraisal, is calculated using one of three different approaches: a sales comparison, cost, or income approach. These give both the lender and buyer an idea of the property value. The approach used by an appraiser is dependent on the type and use of a property.
Here are the three property value approaches used in a real estate appraisals:
Sales: This type of real estate appraisal is used for most single-family dwellings. This method determines property value based on what other properties in the area/neighborhood with the same features sold for in the last year.
Cost: The cost approach is commonly used for properties not sold on the open market like schools or hospitals. This judges the cost of rebuilding a property with similar features in the present economy.
Income: The income method is used for properties that generate income for the buyer or represent an investment, such as apartment buildings, rental houses, and commercial spaces. This type of real estate appraisal takes into account how much can be charged to tenants and lessees in the current market.
By using one of these methods for a real estate appraisal, the final valuation report reflects the value of the property and―or does not support―the price of the property set by the seller. The approach is decided upon by the inspector and is dependent on the type of property.
7 Pro Tips for a Successful Residential Real Estate Appraisal
It can be difficult to understand the role of the appraiser in the real estate sales process and how an appraiser protects the buyer during the homebuying process. With this in mind, we asked seven top real estate appraisers and agents to share their best tips for a successful residential real estate appraisal.
Here are the top seven pro tips for making the most of your real estate appraisal:
The first place a potential buyer should look―if they are hiring outside of the loan process―is to ask the following people for names [of appraisers]: real estate agents, attorneys who handle real estate transactions, building inspectors, and other appraisers. Typically, what will happen is that one name will keep resurfacing as someone who really knows their profession and can appropriately handle the buyer’s questions.
Appraisers will check the external factors of your home such as the site, quality of construction, integrity of roof and foundation, issues with gutters and siding, parking, and the neighborhood. Inside, they are most concerned with square footage and functionality of the layout. For a complete list, you can ask for a copy of the 1040 URAR form that appraisers use.
One of the main things an appraiser will look at to value your property is recent sales of comparable properties in the area. Make sure you review the relevant comparables with your real estate agent so that you aren’t caught off-guard by a lower-than-expected appraisal.
4. Trust the Appraiser
Gynell Vestal, Certified Residential Appraiser & Founder, Consumer Home Value
An appraisal is a safeguard, so the buyer doesn’t overpay for a property. Of all the people involved in the homebuying transaction, the appraiser is the only party that is unbiased. They do not have a stake in the game. The appraisal requirement is in place to protect all involved parties by providing an unbiased, independent opinion of value to ensure the property provides adequate collateral for a loan.
5. Prepare to Negotiate Sales Price Based on Appraisals
A property inspection and appraisal report will both need to be completed. The inspection tells you if there are any repairs needed, and the appraisal will give the definitive value. Depending on what they say, you may have some room to negotiate the price.
The most important factor in an accurate appraisal is having someone with local knowledge that knows the nuances of the neighborhood, any pending zoning changes, and local market conditions. An appraiser who lives outside of your county or city is more likely to provide an appraisal that misses the mark. You can ask who is doing the appraisal and ask where she/she is from. If they’re not local, ask for another appraiser.
In the case of a low appraisal, your agent can either assist in disputing the appraisal or negotiate with the seller on your behalf to see if the selling price can be lowered. Lowering the purchase price may cause an issue with your lender, but there are a number of options available in the case of a low appraisal. A good real estate agent will consider all of these options and guide you through the process.
Frequently Asked Questions (FAQs)
Who pays for and picks the real estate appraisal company?
The buyer pays for the real estate appraisal as a part of the closing costs. If you are using a Federal Deposit Insurance Corporation (FDIC)-insured lender like a bank or credit union, then they will pick the appraisal company. If you are not using lending sources for a mortgage, then you can pick your own appraisal company.
Does the seller see the real estate appraisal?
The seller does not get a copy of the real estate appraisal unless you give it to them. In cases where you want to negotiate the price after the appraisal, you might need to supply the seller with a copy of the report to justify your request to lower your offer.
What should you do if your real estate appraisal is inaccurate?
If the real estate appraisal contains inaccuracies like the wrong house area comps or features, then you can report these issues to the appraiser. Your real estate agent can help you review the report and figure out where the problems are if you get an unexpected result.
Can your agent do your real estate appraisal?
Some real estate agents can do appraisals because they are trained and certified for a home inspection. A real estate agent representing the buyer or the seller should not do a home appraisal for your property, however. A home appraisal should be completed by an impartial third party with no ties to either the buyer or the seller.
How do I find a real estate appraiser?
You can ask your agent or a real estate lawyer for a reference for an appraiser. If you would rather research appraisers yourself, then you can use the Appraisal Institute’s advanced search to find an appraiser in your area.
Bottom Line: Residential Real Estate Appraisals
A residential real estate appraisal is a report from an independent, trained inspector hired to determine the value of a property based on home or sales values in the area, damage to the property, and overall property condition. A home appraisal costs between $300 and $400 and is paid for by the homebuyer. A home appraisal makes sure that the seller’s asking price is in line with the value of the home so that a buyer does not overpay.
An appraisal— alongside real estate contacts and sales documentation—can be full of hard-to-understand legal terms and concepts. Rocket Lawyer can look over home appraisals, offer letters, and contracts for a fraction of the price of a lawyer to help you fully understand every part of the homebuying process. Find out more about Rocket Lawyer’s services today.
