Archive for the 'Excellent Agent' Category
A View from the Field- Part 3
Trek #3 out to New Milford for appraisal class. At least I only paid $2.99 a gallon for gas this week.
Today I learned about 2 of the 3 different approaches to appraise different types of properties; the Sales Comparison Approach and the Cost Approach. Next week we’ll learn about the third approach, the Income Approach. Really fascinating stuff to the lay person, I know.
But now I know that if I want to appraise a house, I would use the Sales Comparison Approach and use sales of similar type properties to arrive at a value. Adjustments are made here and there to take into consideration various attributes. It’s really not that different than what I would do for a market analysis for a seller or buyer.
I also know that if I want to appraise some unique building, that the Cost Approach would be the best way to go. For example, if I want to appraise the new Yankee Stadium (boo, hiss!), this would be the correct approach. Essentially you determine the depreciated reproduction cost of the building (how much it would cost to rebuild from the ground up, using the same materials) and add it to the underlying value of the land on which it sits. Fun!
Much of what I’m learning in class isn’t necessarily relevant to my area of practice in real estate, but it does give me an understanding of the bigger picture, which is always helpful.
At the beginning of today’s class, we were given the chance to talk about our local markets and the trends that we’re seeing. Here were some of the revelations…
Litchfield County- Land purchases seem to be moving. Buyers aren’t developers, but “regular” people. For example, someone will buy 18 acres at $20,000/acre with the hopes of eventually building a house on a large tract and then maybe spinning the rest off in the future to a developer. These “regular” people are hedging that land in Litchfield County will continue to be desirable to city folk.
Also, developers like Pulte and Toll Brothers are starting to explore the market again, anticipating that things will rebounding in the next few years, so they will be poised to react.
Greenwich- Houses in the $5-$8 million range are still selling very well. Huh. Must be nice.
Lower Fairfield County- Houses with a first floor bedroom are highly desirable and commanding premiums, as they are in low supply. The baby boomers are looking to downsize, but don’t want to move far, so they’re fighting over homes with a one-floor living option. I believe this will become more prevalent in all areas, particularly if boomers don’t want to live in 55+ communities.
A View from the Field- Part 2
Today was session 2 of my 30 hour appraisal class. Back out to New Milford I went.
One concept we talked about that I found particularly interesting was the highest and best use for a property. In order for an appraiser to determine a final value conclusion for their appraisal report, they must understand the optimum use to which land or improved property can be put. To do this, they’ll look at 4 tests:
1. It must be physically possible.
2. It must be legally permissible.
3. It must be financially feasible.
4. It must be maximally productive.
The most common way to use this would be to determine if a large piece of land with a house on it could potentially have a higher and better use by appraising the property as subdividable land, rather than appraising it for the value of the house plus the lot as it currently exists.
The reason I am fascinated with this is because I think I have a higher and better use for my neighbor’s property. I’d like to annex their lot, move their house to another location, and build a garage for my house. My current lot probably not big enough for a garage, based on Hartford’s zoning laws. My neighbor would most likely disagree with my plans. So let’s put it to the test… 
1. It is physically possible to move their house and build a garage.
2. It is legally permissable to move their house, annex their property, and build a garage.
3. It is financially feasible to move their house, annex their property, and build a garage. (though not reasonable considering resale value)
4. It is not maximally productive to remove their house in order to build a garage. It fails the highest and best use test.
And because I’m a logical person, I don’t want to violate highest and best use. And now my neighbor is going to hate me for publicizing my diabolical scheme.
Funniest part of the day: We were looking at a Killingworth town engineering map in class. There is actually a street called ROAST MEAT HILL ROAD in Killingworth. I am not joking. Who could actually live on Roast Meat Hill Road? Doesn’t that really kill resale value? Does PETA set up daily protests? Talk about politically incorrect…
Spewing Generalities: Is Your Realtor a Politician?
It’s the political season and we’re being inundated from all sides with debates, interviews, and commercials. The recurring theme that I see seems to be politicians speaking in generalities. When they’re asked a direct question about a plan they have to solve an issue, the response is usually some circuitous generalization. Here’s a spoof of what I’m talking about…
UPDATE: Embedded video removed … see it here.
I don’t understand why politicians cannot answer questions clearly and directly. It’s important to me that my representatives are knowledgeable and curious about current events and the world around them. Most importantly, I want to be sure that they have ideas about how to address today’s major issues. How can I feel good about hiring them to represent me if I don’t know what they stand for or what they plan to do to help me and my fellow citizens?
Many times I see real estate agents take the politician approach. The market is doing “fabulously” or is “challenging.” But that’s as far as they go. They don’t back it up with statistics. They don’t know how many days it is taking homes to sell in their market. They don’t know if their town is a buyer’s or seller’s market. They don’t read the local papers or follow the national news to understand how the local economy is being affected by the national economy. The last time they took a class was two years ago and it was because the state board of Realtors required it for relicensing.
Agents with a curiosity and an interest in learning offer a distinct advantage over agents that do the minimum. The MLS offers all the data an agent needs to understand local markets. The agent just has to make the effort to search the data and make sense of it. Local and national newspapers and news programs help us understand the economy and how our market fits into it. The agent just has to take time to do some critical thinking to form an opinion. Independent financial blogs and newspapers are additional resources that help us understand the mortgage market and loan programs available. Classes offered by the local and state board of Realtors help us stay current on new trends such as short sales and internet marketing.
Don’t get caught up in the aura and showmanship of an agent. Make sure that they are curious and knowledgeable about their markets. When you’re interviewing your agents, it’s your opportunity to play “gotcha” journalism. Ask them all the questions you want about the markets you’re interested in. Do they give you facts and figures? Specific examples of recent sales in which they’ve been involved? Recent classes they’ve taken to stay current? After you put them through the paces, you’ll feel much more comfortable about them representing you.