Is Listing Your Home During the COVID Outbreak A Good Idea?

Normally, spring in Southern California is an excellent time to list your home for sale.

It’s the time of year when people are ready for a new beginning and planning big life changes. 

Normally.

Right now, the COVID-19 pandemic has led to government orders that range from social distancing to sheltering in place, which has changed life as we know it. When the streets are empty and you haven’t even seen your neighbors in weeks, a big question for would-be sellers remains: Should I even bother to list my house for sale? Here are the pros and cons to consider in these unusual times.

Pro: Right now, homes are STILL ACTUALLY SELLING in all parts of Southern California.

And…they are still selling near, at, or above asking price for many price ranges. Even with showing restrictions in place and virtual open houses flooding the internet, buyers are making legitimate offers and moving forward. We are still poised to help sellers navigate these interesting times.

Pro: Right now, homes are mortgage rates are very low.

In an effort to stimulate the economy, mortgage rates have dropped to new lows — and they could fall even more in the coming weeks. This is good news for potential buyers who were on the hunt before the pandemic hit and might help them continue to feel confident about a home purchase. For sellers, this also could mean that the buyers who do make offers are the most serious about making a purchase. Looking for an amazing lender to assist you? Click Here

Pro: There’s more certainty now than there is about the future.

Economic reports are enough to make anyone feel anxious. However, what we know right now is that there’s a stimulus package coming, many are still working (albeit remotely) and that social distancing measures will be in place for at least the next month or so. Things could get better, or they could get worse and lead to further restrictions. Delaying your home sale runs the risk of potentially missing the window and ending up having to list when the market is down.

22750 Hidden Hills Rd, Yorba Linda, Ca 92887

Pro: Open Houses Are Available Virtually.

Virtual showings may be a great option for sellers and buyers who are serious about social distancing. An excellent agent will be able to make your home’s virtual presence as compelling as it is in-person. Whether it’s via FaceTime, a 3D virtual tour, or a Facebook Watch Party, a virtual open house may just be the perfect answer to showing off your home during the COVID19 crisis. Not only is it a safer option during this time, but it can also be more convenient for those not being able to make the short window that traditional open houses typically offer.

78731 & 78741 Deacon Drive East, La Quinta, CA 92253

Con: You’ll have to find a new place to live.

You’ll have the same issues facing your potential buyer, because you’ll be a potential buyer, too. Even if you do line up a new home, there are possible delays that might necessitate temporary housing (renting an Airbnb, seasonal home, or a short-term rental if you’re even able to) which was much easier to find pre-COVID than it will be right now. Then, there are the actual practical considerations of moving: Will there be movers available to help you out? Will you be able to easily shop for moving supplies (especially if there are travel curfews in place, or if home improvement stores experience delivery delays)? However, there is a silver lining: Some rental owners may be inclined to offer significant rental discounts as their short and long term incomes have also been affected.

Potential Con: Mortgage guidelines are changing more than ever right now 

With some of the potential uncertainty in the market, banks and mortgage brokers and their institutions are possibly changing approval guidelines for purchasers. What does this mean for you? This means you’ll need to be sure to vet the buyer and the lender on your transaction to ensure that no delays occur for your transaction.

The bottom line is that putting your home on the market right now is a calculated risk where the need to sell outweighs any anxiety you may feel about how COVID is affecting the market. With an experienced agent, you can find creative ways to keep your home sale running smoothly (and safely, observing all precautions). 

While we tried to cover the big pros and cons of listing your home during the COVID-19 pandemic… There might be info relevant to our market that can further affect your potential sale. Whether you need a sounding board or advice on how the market is adapting in real-time, we are here to listen to any and all of your concerns.

Give us a call at 714-482-6362 or email us at Info@TheBoutiqueRE.com

Yorba Linda mansion of race car driver Graham Rahal asks $8 million

The modern hilltop estate of IndyCar driver Graham Rahal has listed for $8 million in Yorba Linda. (Composite by Sandra Barrera, Southern California News Group; Inset: Getty Images file photo; House: The Boutique Real Estate Group)

IndyCar driver Graham Rahal has put his modern hilltop estate in Yorba Linda on the market for $8 million.

Perched atop one of Orange County’s highest peaks on a 3-acre lot with canyon, city and distant ocean views, the home — built in 2011 for Carlito Jocson, the corporate executive chef and vice president for Yard House restaurants — offers 8,320 square feet of living space with floor-to-ceiling windows, a restaurant-caliber kitchen and an open-concept floor plan.

A flush-mount fireplace warms the living room, which opens to the formal dining area with its multiple Edison bulb chandelier.

There’s also a breakfast room.

Other interior features include a billiards room, a 13-person home theater and a 1,200-bottle wine room.

The spacious master suite boasts his and hers walk-in closets and a spa-like bathroom with a large shower and a separate sunken tub. Floor-to-ceiling windows slide away and pocket into the walls to offer access to the zero-edge infinity swimming pool flanked by two glass-tiled fire pits in the backyard.

According to the design firm DKY Architects, the house was designed to promote “a true indoor-outdoor living and entertaining experience.”

In addition to the pool, there’s a full-size kitchen with ample bar-seating and a wood-fired pizza oven, a basketball court and a meditation garden lined with olive trees.

The drought-tolerant grounds offer plenty of room for a helipad.

A four-car garage, expansive car park and whole-home Crestron system complete the offerings.

Raj Qsar and Christina Boladian of The Boutique Real Estate Group hold the listing.

Rahal, 31, is the son of former racing champ-turned-team owner Bobby Rahal. He’s been driving since 2007. The six-time NTT IndyCar Series winner is married to former drag racing star Courtney Force.

The Rahals are asking 31.3% more than the $6.095 million they paid for the five-bedroom mansion in November 2017, the escrow statement shows.

When they bought their hilltop estate, it was the most expensive home ever sold in the city.

That title now belongs to a hilltop mansion dubbed Satsang, once the location for a shampoo commercial starring Jennifer Lopez. It sold for $9.8 million in February 2019.

By SANDRA BARRERA | sbarrera@scng.com | Los Angeles Daily News

Original link to article: https://www.ocregister.com/2020/04/14/yorba-linda-mansion-of-racecar-driver-graham-rahal-asks-8-million/

Top 9 Things to do for New Year’s 2019 in The OC with kids

By: Raj Qsar

1. “Noon” Year’s Eve

Local children’s museums KidspaceThe Children’s Museum at La Habra, and Pretend City all celebrate with balloon drops, live music, sparkling cider, and a countdown to 2020 at 12:00 noon instead of 12 midnight. It’s the best of both worlds for little ones: a New Year’s Eve bash and an early bedtime…for everyone… LOLOL.

Make your own noise at Pretend City

2. Family Festival

Shoreline Village in Long Beach offers a free, early evening, family-friendly celebration featuring all manner of entertainment for kids. The ball drops and the fireworks fly at 9pm, timed to coincide with the east coast, and sensible bedtime. Make even more of a Long Beach day of it by adding a stop at Queen Mary Christmas in the afternoon (open 12n-6pm on New Year’s Eve).

3. Knott’s New Year’s Eve

Is it Knott New Year’s Eve already? Apparently it is—and happily, the Knott’s New Year’s Eve party definitely is a party, with family entertainment everywhere you look, all day and way into the night. We had some friends do this last year and had a ball; and by the time it started getting really crowded, the kids were ready to call it a year anyway.

Knotts Berry Farm New Years Eve

4. Arcade Night

Dave & Busters invites the whole family to play video games and count down to 2020 at the Irvine location. Bubbly drinks for parents and soda for kids are all-you-can-drink at the open bar, and food is included in the ticket price, too. 

5. Jousting

How about some good old-fashioned fighting? No, really, old-fashioned—as in knights in full armor jousting and clashing broadswords. Medieval Times Dinner Theater has a family-friendly New Year’s Eve bash planned (with the emphasis on bash). Could be kinda fun?

6. Disneyland

If you want the closest you can get to that Times Square crowd energy, the Happiest Place on Earth is also one of the most popular places on Earth. Disneyland fireworks are grander (and happen twice) on New Year’s Eve, and the party is all around, as you ring in the new year with every Disney character your kids normally dream of at this time of night.

7. Winter Fest

Orange County has another family-friendly, large-scale celebration option if the theme parks are not your thing. The holiday festival at the OC Fair & Event Center rings in the new year at 6pm for the early-to-bed set, then stays open late to do it all again at midnight, with snow, fireworks, a parade, and a ball drop.

8. First Night Fullerton

This family-friendly, alcohol-free event will be celebrating its 28th year from 7pm to midnight. The free event features live musical performances, food vendors, games, activities, and a fireworks show at midnight.

9. Torchlight Parade (Not in The OC)

And now for something totally different: Two of Orange County’s nearby ski resorts have an annual tradition of a Torchlight Parade, in which hundreds of skiers head down the mountain after dark in a row bearing torches. It costs nothing to watch the spectacle at either Mountain High or Snow Summit, or to participate in the accompanying festivities. Of course, once you’re there, why not go skiing? Especially if you have a 5th grader who can ski for free?

Torchlight Parade

Raj Qsar on Cheddar TV Los Angeles

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… 😉

http://www.instagram.com/theboutiquere

Catch Raj Qsar on CNBC Squawk Box

November 15th, 2019

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.

How to Sell a House in Southern Calfornia: Make a Movie

The New York Times

By Debra Kamin // Nov. 12, 2019, 1:53 a.m. ET

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 party

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.

FACEBOOK EVENT INVITE

Top 8 Tips for ICLV 2019

Inman Connect Las Vegas.

Bigger. Better. Bolder.

Author: Raj Qsar, The Boutique Real Estate Group

1. Make a list of the people you want to meet “in real life.” Connect is an amazing time to solidify some of those online relationships and connect with people who you admire and respect and make that true emotional connection. Some of the connections I have made at Connect have become lifelong friends of mine. They are the ones I call when I need advice, encouragement or just a plain old kick in the tush! Remember this quote from Brene Brown “What we know matters, but who we know matters more.”  Some of my favorite folks include who can show you the ropes at Inman include: Vanessa Jones Bergmark, Sara Sutachan, Seth Price, Andrew Flachner, Alyssa Hellman, Lynn Johnson, Rob Hahn, Laura BradyChris Smith, Jimmy Mackin, Leigh Brown, Bill Lublin, Celeste Starchild, Katie Lance, Debra Trappen, Valerie Garcia, Joe Schutt, Jay Thompson, Heather Elias, Laura Monroe, Teri Conrad, Audie Chamberlain, Joe Rand, Wendy Forsythe, Sam DeBord, Seth O’Bryne, Jason Cassity, Caroline Pinal, Troy Palmquist & Veronica Figueroa, and so many others….

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.

Raj Qsar, The Boutique Real Estate Group, www.TheBoutiqueRE.com

@rajqsar

@TheBoutiqueRE

@SeriouslyOC

@CounterclockwiseSwirl

Real Estate Appraisal: Definition, Cost & How It Works

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:


1. Ask the Right People for Referrals

Rachel Massey, USPAP Instructor & Certified Residential Appraiser, Massey & Associates

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.


2. Know What the Appraiser Is Seeking

Jennifer Harder, Founder & CEO, Jennifer Harder Mortgage Brokers

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.


3. Review Comps With Your Agent

Mike Giamou, Co-founder, Medallion Capital Group & Licensed Mortgage Agent

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

Ralph DiBugnara, President, Home Qualified

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.


6. Find a Local Appraiser

Julie Upton, Realtor, Compass San Francisco Bay Area

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.


7. Let Your Real Estate Agent Help You

Terry Jamnik, Vice President of Business Development, VA Home Loan Centers

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.

Link to original article: https://fitsmallbusiness.com/real-estate-appraisal/