Comp One Blog - Your Local Expert!

May 20th, 2024 12:14 PM
Most of the time, the highest and best use of a property is self evident.  Every now and then however, particularly with 2-4 unit properties, the highest and best use can be a tricky question to figure out.  Add in zoning changes allowing for higher density properties, and the question can get even more thorny.  Every appraisal requires that the appraiser consider the highest and best use of the property, and there are four criteria for determining highest and best use: 

-What is physically possible.
-What is legally permissible.
-What is financially feasible.
-What is maximally productive.  

With a single family home in good repair on a typical residential lot in a subdivision, it's a no brainer, but what if the property is a grandfathered in (legal -nonconforming) triplex on a site where the zoning only allows for single family homes?  What is legally permissible in that case?  What is maximally productive?  Good question! 

If you own a property where there is a highest and best use question, or if you are involved with such a property as a real estate professional, knowledge of Fannie Mae's Selling Guide commentary concerning this issue can be very helpful. 

Please note the following concerning Highest And Best Use analysis per the Fannie Mae Selling Guide B4-1.3-04, Site Section of the Appraisal Report:  

The appraiser determines highest and best use of a site as the reasonable and probable use that supports the highest present value on the effective date of the appraisal. For improvements to represent the highest and best use of a site, they must be legally permitted, financially feasible, and physically possible, and must provide more profit than any other use of the site would generate. All of those criteria must be met if the improvements are to be considered as the highest and best use of a site.

It goes on to say: 

The appraiser’s highest and best use analysis of the subject property should consider the property as it is improved. This treatment recognizes that the existing improvements should continue in use until it is financially feasible to remove the dwelling and build a new one, or to renovate the existing dwelling. If the use of comparable sales demonstrates that the improvements are reasonably typical and compatible with market demand for the neighborhood, and the present improvements contribute to the value of the subject property so that its value is greater than the estimated vacant site value, the appraiser should consider the existing use as reasonable and report it as the highest and best use.

So in most cases, if the value of the property as improved is greater than the value of the property vacant then, per Fannie Mae, the highest and best use is the current use.  

The caveat to this that may be an unknown and something to consider, is whether the municipality will allow the property to be rebuilt if more than 50% destroyed.  You'll have to contact them to figure that out!   

Contact Comp One Appraisal Services today and put our local expertise to work for you.  Based in the Globe Building at Peachtree Dekalb Airport, we are the perfect resource for attorneys, agents, homeowners, and lenders.  Thanks for reading!  

Got an appraisal issue or question?  Call my Appraiser On-Call For You Hotline at 404-245-7577. 



Posted by Cameron Horne on May 20th, 2024 12:14 PMLeave a Comment

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If you're considering selling your home to an investor or house flipper, don't just take their estimate at face value. They are looking to get the best deal possible for themselves, not necessarily pay you a fair market price for your home. The only way to truly know what your home is worth is to get an independent, professional appraisal done before entering negotiations.

An appraisal by a licensed appraiser will give you an objective, unbiased valuation of your home based on comparable recent sales in your area, the condition of your home, any upgrades or renovations you've done, the land your home sits on, and other factors. This appraised value is what lenders use to determine how much they are willing to lend on your home. It gives you leverage when selling, whether to an investor or the open market, because you have an expert, third-party opinion of the true market value.

Real estate investors may try to lowball you with their initial offer, hoping you don't know how much your home could really fetch. Or they may use some less-than-scrupulous techniques to try to talk down the value, like pointing out every single flaw and needed repair. With an appraisal in hand, you can counter those tactics and make sure you get paid every penny your home is worth.

There is a cost for an appraisal, but it's a wise investment to avoid potentially leaving tens of thousands on the table. Don't just go with the first number an investor names. Protect yourself and your equity by insisting on an independent appraisal first. That way you can be certain any offer is truly a fair one based on market value, not just a lowball from somebody trying to maximize their own profits.


Contact Comp One Appraisal Services today and put our local expertise to work for you.  Based in the Globe Building at Peachtree Dekalb Airport, we are the perfect resource for attorneys, agents, homeowners, and lenders.  Thanks for reading! 
 

Got an appraisal issue or question?  Call my Appraiser On-Call For You Hotline at 404-245-7577. 


Posted by Cameron Horne on May 13th, 2024 9:04 AMLeave a Comment

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May 7th, 2024 10:03 AM

This noted from Matt Reynolds in the AJC:  



For Atlantans struggling to get into affordable housing, a new report published Tuesday finding the city’s rental market is softening could spell some relief.

There was a 3.7% decline in rents compared to the same time last year, in the cities of Atlanta, Sandy Springs and Roswell, and the area ranked fourth in 10 markets with the largest yearly rent price declines, according to a March rental report by real estate listings company Realtor.com. The median rent in March was $1,626.

“Rising shelter costs have been a major driver of overall inflation, a top concern for the [Federal Reserve] as it meets this week,” Danielle Hale, the listings site’s chief economist, said in a news release. “There is some good news for renters with prices falling in many parts of the country, especially outside expensive metro markets in the West and Northeast.”

The March rental report comes with provisos, noting that while rents in the United States declined for the eighth month in a row, the median rent nationwide of $1,722 was only $36 less than an August 2022 peak. That’s still $313 more than pre-pandemic prices in March 2019.

Moreover, wages have not kept pace with rising housing costs. And a Zillow report released earlier this month found that rents are still rising in metro Atlanta, though at a slower pace.

According to the Realtor.com report, rents in other parts of the country, including the Midwest, were flat. In the South, the median rent fell 1.5% compared to the same time last year, the report found. Hale said this was evidence that increasing the supply of available housing had curbed costs in the region.

“Unemployment is low and demand for rental housing was strong, but an influx of new units has helped push down rental prices,” said the report, which relied on rental data in March for studio, one-bedroom and two-bedroom units listed on Realtor.



Contact Comp One Appraisal Services today and put our local expertise to work for you.  Based in the Globe Building at Peachtree Dekalb Airport, we are the perfect resource for attorneys, agents, homeowners, and lenders.  Thanks for reading! 
 

Got an appraisal issue or question?  Call my Appraiser On-Call For You Hotline at 404-245-7577. 


Posted in:Rents and tagged: #atlantaappraiser#AJC
Posted by Cameron Horne on May 7th, 2024 10:03 AMLeave a Comment

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October 11th, 2023 12:11 PM
Today's Article In The AJC:  Atlanta's real estate market continues to cool due to high interest rates.  

Interest rates weighing on home sales
Metro Atlanta market ‘has really pulled back,’ real estate service says.
By Michael E. Kanell - michael.kanell@ajc.com
DIGGING DEEPER HOME SALES
The metro Atlanta housing market stumbled in September under the weight of the highest mortgage rates since 2000.
In the 12 counties centered on the city of Atlanta, there were 4,488 homes sold last month, down 16.7% from August and a drop of 21.8% from the same month a year earlier, according to the Georgia Multiple Listing Service.
“There has been a fairly significant drop-off from last year,”
John Ryan, chief marketing officer for Georgia MLS. “And now we are going into the usual seasonal decline.”
The total value of homes sold last month was $2.1 billion, a drop of 18.1% from a year ago. That means much less money for many people whose business depends on sales: brokers, lenders, appraisers, accountants and attorneys.
“We’ve seen a decrease in the number of appraisers,” Ryan said. “I think that is a sign that the market has really pulled back.”
The latest chill came as mortgage rates climbed again, he said. “I think 7% has been a demarcation line.”
Rates had crested above 7% last fall but have been
below that line from last November to mid-August.
The average 30-year mortgage rate last week was nearly 7.5%, the highest it has been since late 2000, according to Freddie Mac, which buys mortgages in the secondary market.
A year ago, the average rate was 6.6%. Two years ago, it was 2.99%.
Higher rates are a problem for homebuyers. As rates rise, they add to the amount due monthly for the same loan, effectively cutting the purchasing power of buyers. Faced with higher rates, some potential buyers lower their sights and search for less costly homes, while others stay put, hoping rates will drop.
But higher rates have also been a sticking point for owners who might sell.
Most current owners bought their homes when rates were much lower and would be trading them for higher rates if they move.
The result has been a small pool of inventory — that is, the listing of homes for sale.
In September, that pool was 10.2% smaller than it was a year ago, when it was already considered inadequate.
In a balanced market, experts say that supply should be roughly equal to six or seven months of sales, but listings now represent a little more than two months of sales.
And that has meant that wannabe buyers still confront a market that is tilted to the advantage of sellers.
“Despite rising mortgage rates, there are still many buyers out there actively looking,” said broker Kristen Jones, owner of Re/Max Around Atlanta. “We continue to see multiple-offer situations on many properties.”
So, while the overall chill in the market means prices aren’t climbing the way they were a year ago, the tilt toward sellers keeps prices from dropping. The median sales price for a home in the core 12-county area last month was $395,000, up 2.3% from a year earlier, according to Georgia MLS.
NUMBERS TO KNOW
16.7% The decrease in number of metro Atlanta home sales from August to September.
7.5% Average 30- year mortgage rate last week, highest since November 2000. Rates have continued to inch up this week.
$395,000 Median sales price for a metro Atlanta resale in September, up 2.3% from a year ago because of limited inventory on the market.

Contact Comp One Appraisal Services today and put our local expertise to work for you.  Based in the Globe Building at Peachtree Dekalb Airport, we're the perfect resource for attorneys, agents, homeowners, and lenders.  Thanks for reading! 

July 8th, 2023 4:04 PM
In my travels recently I came upon a couple notable homes for sale.  On the Cape Fear River in Wilmington NC,  for a cool 1.95 million, you can own 510 Surry St.  

http://www.realtor.com/realestateandhomes-detail/510-Surrey-St_Wilmington_NC_28401_M66668-77519

My favorite view is the one from the river (it impressed all the tourists on the river boat cruise).  It's a historic home built in 1795. 

Then I peeked in the windows of the Oak House in Madison GA.  It comes with a model train room.  

 http://www.compass.com/listing/617-dixie-avenue-madison-ga-30650/939215353019385257/

On the flip side, I heard WSB's Clark Howard praising the benefits of smaller homes yesterday.  He said that in the last fifty years the average size of a home in the US has doubled while, at the same time, the number of people living in a typical home has fallen by half.  He went on to note that smaller homes cost less to maintain.  Food for thought.  Then there is the real estate principle of progression which is the idea that the value of a property increases when more valuable properties are built in the area.  It certainly applies to smaller homes in the midst of larger ones. 

Contact Comp One Appraisal Services today and put our local expertise to work for you.  Based in the Globe Building at Peachtree Dekalb Airport, we're the perfect resource for attorneys, agents, homeowners, and lenders.  Thanks for reading!
 

Posted by Cameron Horne on July 8th, 2023 4:04 PMLeave a Comment

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