Wednesday, July 29, 2009
Tevis Cup Brings Horse Property to Mind
Auburn, known as “The Endurance Capitol of the World,” is hosting the world’s best known and most difficult endurance ride, The Tevis Cup. Riders from all over the globe come to participate in the one-day, 100-mile event begun by Wendell Robie in 1955.
With all eyes on this equestrian event, I thought I would put the focus of this week’s article on horse property in the Foothills.
I can’t think of a better way to talk about horse property than through the voice of local Realtors who specialize in the acquisition and sale of horse property. I admire and respect each one of these cowgirls!
Cynthia Clarkson of Clarkson Real Estate has three words: water, water, water.
“Without water you don’t have horse property,” Cynthia explained.
“The type of riding determines the type of horses and therefore the type of topography that is suitable for horse property. For example, horses ridden for endurance don’t require big flat areas. Many horse owners believe that hilly and rugged property actually keeps their endurance horses in better condition.” she continued.
Cynthia further explained that dressage is probably one of the most disciplined of the equestrian sports. The horses used for dressage need larger flatter property with plenty of room for an arena.
“The gold in the Sierra Foothills is not yellow!” exclaimed Cynthia. “It is the experience of riding the most beautiful trails I have ever seen. You can dress up like a cowboy and ride down to the river and just splash around. The experience is very enlightening!”
“Another thing that makes the Foothills so unique is that you can actually afford to have your own backyard horse facility. You don’t have to board your horses. You can save $375 to $400 per month per horse. Backyard horse facilities help to create priceless relationships with you and your horses,” she continued.
“It is a really awesome experience to have a strong relationship with your horse and your sport. If you and your horse have a bond, when you ask them to excel, they will. They truly become your partner.”
Colleen Conley, a twenty-year Realtor with Lyon and Associates just returned from a wonderful week’s ride with fifty women. They rode to Cherry Valley, which is at the bottom of Carson’s Pass. The group is known as the LARKS, or ladies annual riding kaper.
Colleen believes that the three most important things to consider when buying horse property are topography, zoning and availability of water.
The topography needs to be suitable for auxiliary buildings such as round pens, arenas, barns, shelters, etc. The larger the acreage, the less critical useable property becomes. For example, if you have a 40-acre parcel, and ten acres is all you need for your intended use, the other thirty becomes less important.
I recommend that potential buyers of horse property check the county zoning ordinances. Best case is that a new horse facility will be in a compatible neighborhood. You want to be surrounded with like-minded neighbors who won’t complain about odors and flies.
Water is an essential. You want a high producing well, irrigation water or both. Gravity flow is the best because you don’t have to pay for the electricity to pump the water.
Colleen says, “I think that you are born with the love of riding horses. The Foothill area provides the opportunity to have horses in your own backyard. I love the relationship that develops between my horse and me; in fact, I call him ‘My Mane Man.’”
Holly Mraz, also a Realtor with Lyon, has been appraising and selling horse property since 1977. She also teaches real estate at Sierra College.
Holly advises, “You can’t start a horse property search without knowing the needs of the horses. It’s like the horse becomes your client. You have to know what kind of horses they are and how many there are. Knowing this helps to determine how large the property needs to be.”
“Just because you have acreage, doesn’t mean you can have horses. That’s where zoning comes in. I like to accompany my clients to the county planning department. We look over the rules and regulations.”
“I preview every property before showing it. I look for soil conditions, rocks, usability and erosion potential. I want to make sure that there is enough area for dry pasture as well as wet pasture. I check for barns and other out buildings. I make sure there is enough area for an arena and other necessary facilities,” she said.
“Of course water is very important, especially if you want to irrigate.”
“I think that Placer, El Dorado and Nevada Counties have amazing opportunities for the equestrian buyer. As an appraiser, I believe that the ability to ride to the trails adds a great deal of value to the property. If you choose a property that requires trailering to the trails. Make sure the route is easy. It will add to your enjoyment,” Holly opined.
I say choosing a horse property with the right amount of water, topography and zoning is a matter of Good Home $$s and Sense.
Happy Trails!
Visit HomeTown Realtors' website for more real estate information!
http://www.seehometown.com/
With all eyes on this equestrian event, I thought I would put the focus of this week’s article on horse property in the Foothills.
I can’t think of a better way to talk about horse property than through the voice of local Realtors who specialize in the acquisition and sale of horse property. I admire and respect each one of these cowgirls!
Cynthia Clarkson of Clarkson Real Estate has three words: water, water, water.
“Without water you don’t have horse property,” Cynthia explained.
“The type of riding determines the type of horses and therefore the type of topography that is suitable for horse property. For example, horses ridden for endurance don’t require big flat areas. Many horse owners believe that hilly and rugged property actually keeps their endurance horses in better condition.” she continued.
Cynthia further explained that dressage is probably one of the most disciplined of the equestrian sports. The horses used for dressage need larger flatter property with plenty of room for an arena.
“The gold in the Sierra Foothills is not yellow!” exclaimed Cynthia. “It is the experience of riding the most beautiful trails I have ever seen. You can dress up like a cowboy and ride down to the river and just splash around. The experience is very enlightening!”
“Another thing that makes the Foothills so unique is that you can actually afford to have your own backyard horse facility. You don’t have to board your horses. You can save $375 to $400 per month per horse. Backyard horse facilities help to create priceless relationships with you and your horses,” she continued.
“It is a really awesome experience to have a strong relationship with your horse and your sport. If you and your horse have a bond, when you ask them to excel, they will. They truly become your partner.”
Colleen Conley, a twenty-year Realtor with Lyon and Associates just returned from a wonderful week’s ride with fifty women. They rode to Cherry Valley, which is at the bottom of Carson’s Pass. The group is known as the LARKS, or ladies annual riding kaper.
Colleen believes that the three most important things to consider when buying horse property are topography, zoning and availability of water.
The topography needs to be suitable for auxiliary buildings such as round pens, arenas, barns, shelters, etc. The larger the acreage, the less critical useable property becomes. For example, if you have a 40-acre parcel, and ten acres is all you need for your intended use, the other thirty becomes less important.
I recommend that potential buyers of horse property check the county zoning ordinances. Best case is that a new horse facility will be in a compatible neighborhood. You want to be surrounded with like-minded neighbors who won’t complain about odors and flies.
Water is an essential. You want a high producing well, irrigation water or both. Gravity flow is the best because you don’t have to pay for the electricity to pump the water.
Colleen says, “I think that you are born with the love of riding horses. The Foothill area provides the opportunity to have horses in your own backyard. I love the relationship that develops between my horse and me; in fact, I call him ‘My Mane Man.’”
Holly Mraz, also a Realtor with Lyon, has been appraising and selling horse property since 1977. She also teaches real estate at Sierra College.
Holly advises, “You can’t start a horse property search without knowing the needs of the horses. It’s like the horse becomes your client. You have to know what kind of horses they are and how many there are. Knowing this helps to determine how large the property needs to be.”
“Just because you have acreage, doesn’t mean you can have horses. That’s where zoning comes in. I like to accompany my clients to the county planning department. We look over the rules and regulations.”
“I preview every property before showing it. I look for soil conditions, rocks, usability and erosion potential. I want to make sure that there is enough area for dry pasture as well as wet pasture. I check for barns and other out buildings. I make sure there is enough area for an arena and other necessary facilities,” she said.
“Of course water is very important, especially if you want to irrigate.”
“I think that Placer, El Dorado and Nevada Counties have amazing opportunities for the equestrian buyer. As an appraiser, I believe that the ability to ride to the trails adds a great deal of value to the property. If you choose a property that requires trailering to the trails. Make sure the route is easy. It will add to your enjoyment,” Holly opined.
I say choosing a horse property with the right amount of water, topography and zoning is a matter of Good Home $$s and Sense.
Happy Trails!
Visit HomeTown Realtors' website for more real estate information!
http://www.seehometown.com/
Wednesday, July 22, 2009
Lost in Translation!
Dear Sue,
I have been thinking about selling a home that I have owned for over thirty years.
I called a real estate agent that has been working in my neighborhood. I told her that I wanted to know how much my home was worth. She told me that she had to do a CMA.
I didn’t want to appear clueless but what in the heck is a CMA?
Clueless Cal
Dear Cal,
AVID, CMA, SFR, SFD, RPA, BPO, REO, CRS, GRI, are “short cuts” or abbreviations for terms that real estate agents unwittingly throw around AKA “words of the trade.”
When Realtors use abbreviations like these they make others feel like outsiders and clueless. I am in the real estate business and sometimes even I am forced to stop agents and ask them to translate!
In my opinion it’s important to use language that your audience understands when communicating. Otherwise, what is the point?
Back to your question, a CMA is also known as a comparative market analysis. It is the process of determining market value by comparing a property with comparable or similar properties that are currently on the market, pending, sold and expired.
The properties that are used as comparisons should ideally be of similar location, condition, size and age. The comparables should also be of similar quality.
If there are no similar properties with which to compare, it becomes more complicated to give an accurate market analysis. An agent familiar with the market area can extrapolate by making adjustments to compensate for differences. An easy example: your home has a pool with a water- fall and professional landscaping. If there’s a similar home in your market area without a pool or landscaping, an adjustment of X dollars can be added to your home’s value.
The more different the available properties are from each other, the more market knowledge and skill is required.
My first Broker, Bill Bertrando once said that a home in Watts could be compared to a home in Auburn if one could determine the differential.
When your Realtor tells you that she must prepare a CMA she is going to prepare a comparative market analysis. Ask her not to use crazy Realtor speak in future conversations! Tell her it’s a matter of good Home $$’s and Sense.
Please visit HomeTown Realtor's homepage for more up to date real estate information:
http://www.seehometown.com/
I have been thinking about selling a home that I have owned for over thirty years.
I called a real estate agent that has been working in my neighborhood. I told her that I wanted to know how much my home was worth. She told me that she had to do a CMA.
I didn’t want to appear clueless but what in the heck is a CMA?
Clueless Cal
Dear Cal,
AVID, CMA, SFR, SFD, RPA, BPO, REO, CRS, GRI, are “short cuts” or abbreviations for terms that real estate agents unwittingly throw around AKA “words of the trade.”
When Realtors use abbreviations like these they make others feel like outsiders and clueless. I am in the real estate business and sometimes even I am forced to stop agents and ask them to translate!
In my opinion it’s important to use language that your audience understands when communicating. Otherwise, what is the point?
Back to your question, a CMA is also known as a comparative market analysis. It is the process of determining market value by comparing a property with comparable or similar properties that are currently on the market, pending, sold and expired.
The properties that are used as comparisons should ideally be of similar location, condition, size and age. The comparables should also be of similar quality.
If there are no similar properties with which to compare, it becomes more complicated to give an accurate market analysis. An agent familiar with the market area can extrapolate by making adjustments to compensate for differences. An easy example: your home has a pool with a water- fall and professional landscaping. If there’s a similar home in your market area without a pool or landscaping, an adjustment of X dollars can be added to your home’s value.
The more different the available properties are from each other, the more market knowledge and skill is required.
My first Broker, Bill Bertrando once said that a home in Watts could be compared to a home in Auburn if one could determine the differential.
When your Realtor tells you that she must prepare a CMA she is going to prepare a comparative market analysis. Ask her not to use crazy Realtor speak in future conversations! Tell her it’s a matter of good Home $$’s and Sense.
Please visit HomeTown Realtor's homepage for more up to date real estate information:
http://www.seehometown.com/
Thursday, July 16, 2009
Toxic Assets Become “Legacy Assets”
Dear Sue,
Since the health care debate has become front and center in the local and national news I haven’t heard much about the so-called “toxic assets”.
I last heard that the Obama administration was coming up with a way to sell the toxic assets to the public. I was even thinking of getting some like- minded friends and family members together to buy some as investments.
None of us can find any information about when the properties will be available for sale or how to buy them when they do become available.
Sue, can you help us?
Investor Ian
Dear Ian,
I too have been waiting for the “toxic asset” information to be announced. Your letter prompted me to dig a little deeper into the subject.
Toxic assets have a new name. They are now called “legacy assets.”
The plan to sell the bad or so-called “toxic” securitized loans that are attached to real estate was announced on March 23, 2009 by the Treasury Department, the Federal Reserve and the FDIC. I found the following on the www.financialstability.gov website:
“we have been working jointly to put in place the operational structure for these programs, including setting guidelines to ensure that the taxpayer is adequately protected, addressing compensation matters, setting program participation limits, and establishing stringent conflict of interest rules and procedures. Recently released rules are detailed separately in the Summary of Conflicts of Interest Rules and Ethical Guidelines .”
In other words the government is ironing out the details before implementing the plan.
The plan, known as the “Legacy Securities Program,” is being designed to get public and private capital flowing more freely and to determine the market value of the securitized assets. In other words, the government wants to be sure that the price that is paid is equal or higher than the value of the real estate (asset) being purchased.
To qualify, the securities must have been issued prior to 2009 and have originally have been rated AAA or equivalent.
I would personally suggest that you only buy those that are secured directly by the actual mortgage loans, leases or other hard assets!
If the nature of the collateral is not known it would be like buying the contents of a storage unit at auction without being able to look inside and examine what’s inside…….
The Federal Government has selected 10 private investment firms to broker the Legacy assets. Each of the ten “Legacy Securities fund managers” will receive an equal allocation of investment capital from the Treasury to be used as financing capital. The initial investment is expected to be up to 30 billion dollars with more on the horizon if it is found to be necessary. More from the website:
“The Federal Government is prepared to assist the private sector with financing the legacy asset.
The Legacy Loan Program is intended to boost private demand for distressed assets and facilitate market-priced sales of troubled assets. The FDIC would provide oversight for the formation, funding, and operation of a number of vehicles that will purchase these assets from banks or directly from the FDIC. Private investors would invest equity capital and the FDIC will provide a guarantee for debt financing issued by these vehicles to fund asset purchases. The FDIC’s guarantee would be collateralized by the purchased assets. The FDIC would receive a fee in return for its guarantee.”
The Federal Government is working on ways to increase the utilization of this program by banks and investors.
Ian, my recommendation is to go to www.financialstability.gov and find the list of Legacy Securities Fund Managers and contact them for information on how you can personally participate in the purchase of these legacy assets. It could be a matter of good Home $$’s and Sense.
Please visit my company's website for listings, forclosures and real estate news
www.seehometown.com
Since the health care debate has become front and center in the local and national news I haven’t heard much about the so-called “toxic assets”.
I last heard that the Obama administration was coming up with a way to sell the toxic assets to the public. I was even thinking of getting some like- minded friends and family members together to buy some as investments.
None of us can find any information about when the properties will be available for sale or how to buy them when they do become available.
Sue, can you help us?
Investor Ian
Dear Ian,
I too have been waiting for the “toxic asset” information to be announced. Your letter prompted me to dig a little deeper into the subject.
Toxic assets have a new name. They are now called “legacy assets.”
The plan to sell the bad or so-called “toxic” securitized loans that are attached to real estate was announced on March 23, 2009 by the Treasury Department, the Federal Reserve and the FDIC. I found the following on the www.financialstability.gov website:
“we have been working jointly to put in place the operational structure for these programs, including setting guidelines to ensure that the taxpayer is adequately protected, addressing compensation matters, setting program participation limits, and establishing stringent conflict of interest rules and procedures. Recently released rules are detailed separately in the Summary of Conflicts of Interest Rules and Ethical Guidelines .”
In other words the government is ironing out the details before implementing the plan.
The plan, known as the “Legacy Securities Program,” is being designed to get public and private capital flowing more freely and to determine the market value of the securitized assets. In other words, the government wants to be sure that the price that is paid is equal or higher than the value of the real estate (asset) being purchased.
To qualify, the securities must have been issued prior to 2009 and have originally have been rated AAA or equivalent.
I would personally suggest that you only buy those that are secured directly by the actual mortgage loans, leases or other hard assets!
If the nature of the collateral is not known it would be like buying the contents of a storage unit at auction without being able to look inside and examine what’s inside…….
The Federal Government has selected 10 private investment firms to broker the Legacy assets. Each of the ten “Legacy Securities fund managers” will receive an equal allocation of investment capital from the Treasury to be used as financing capital. The initial investment is expected to be up to 30 billion dollars with more on the horizon if it is found to be necessary. More from the website:
“The Federal Government is prepared to assist the private sector with financing the legacy asset.
The Legacy Loan Program is intended to boost private demand for distressed assets and facilitate market-priced sales of troubled assets. The FDIC would provide oversight for the formation, funding, and operation of a number of vehicles that will purchase these assets from banks or directly from the FDIC. Private investors would invest equity capital and the FDIC will provide a guarantee for debt financing issued by these vehicles to fund asset purchases. The FDIC’s guarantee would be collateralized by the purchased assets. The FDIC would receive a fee in return for its guarantee.”
The Federal Government is working on ways to increase the utilization of this program by banks and investors.
Ian, my recommendation is to go to www.financialstability.gov and find the list of Legacy Securities Fund Managers and contact them for information on how you can personally participate in the purchase of these legacy assets. It could be a matter of good Home $$’s and Sense.
Please visit my company's website for listings, forclosures and real estate news
www.seehometown.com
Labels: legacy assets, toxic assets
Wednesday, July 8, 2009
The Offer Giveth; the Appraisal Taketh Away!
Dear Sue
My Realtor has done a great job diligently marketing our home for the last two and a half months. We received an acceptable offer a couple of weeks ago. We were ecstatic!
Unfortunately, a ridiculously low appraisal was just turned in to the lender. I couldn’t believe it when I discovered that my house appraised $30,000 below the offer price!
I am in a total state of shock! I remember reading in one of your articles that market value is the price that buyers offer and that sellers accept. What the hey is going on?
What do I do now?
Shocked Sam
Dear Sam
As if there wasn’t enough confusion and fear in our crazy mixed up world of real estate, the new appraisal guidelines have created a level of uncertainty never before seen in our industry.
Writer Kenneth Harvey of the Washington Post Writers Group, refers to the new appraisal guidelines created to protect the consumer as “by far the hottest controversy in real estate this summer, and the process could directly affect the value of your house—probably negatively-- by tens of thousands of dollars.”
The spotlight is becoming focused on low- ball valuations and the new rules guiding appraisers.
Typical of the problem is your current situation. The appraisers, under the new system, are unfamiliar with the local market, inexperienced, or both, and are using distressed sales as comparables. Many of the distressed properties that are used as comparisons are in poor condition, and in some cases lack appliances, doors, plumbing and lighting fixtures. Some of the so-called comparables are even located in totally different, less desirable areas.
The director of the Federal Finance Agency declared that they are monitoring the situation and considers the view of all market participants important.
Until the new rules are modified, my advice to you is to negotiate. My experience has been that if you have a willing buyer and a willing seller you will ultimately come to terms that are beneficial to both buyer and seller.
First, ask the buyer if he/she is willing to honor the accepted purchase price. The buyer will often times agree to close the sale as negotiated, especially if he/she just had a similar experience in selling their own property.
Some buyers may be nervous about going ahead with the sale. In this case, splitting the difference is a commonly acceptable and agreeable solution. In other words, since the appraisal is $30,000 below the offer price, the buyer agrees to come up $15,000 and the seller agrees to come down $15,000. This solution is usually considered a win-win.
Contesting the appraisal, while usually a last resort, is a viable option. Ask your real estate agent to gather comparable sales that support the offer price and submit them to your lender. If the appraiser won’t budge, I would ask for a second appraisal. If it comes to ordering another appraisal, I would suggest that the buyer be in agreement and you had better be prepared to pay for it. There is no argument that paying an extra $3-500.00 for an appraisal is definitely worth adding an extra $30,000.00 to one’s appraised value.
I find that the risk of a lower appraisal can be minimized by meeting the appraiser upon his/her initial visit to the property and being armed with comparable sales.
Being ready to negotiate is a matter of good home $$’s and Sense!
Please visit www.seehometown.com for listings, to access MLS, to find an agent and to get information about Auburn, California and Placer County.
My Realtor has done a great job diligently marketing our home for the last two and a half months. We received an acceptable offer a couple of weeks ago. We were ecstatic!
Unfortunately, a ridiculously low appraisal was just turned in to the lender. I couldn’t believe it when I discovered that my house appraised $30,000 below the offer price!
I am in a total state of shock! I remember reading in one of your articles that market value is the price that buyers offer and that sellers accept. What the hey is going on?
What do I do now?
Shocked Sam
Dear Sam
As if there wasn’t enough confusion and fear in our crazy mixed up world of real estate, the new appraisal guidelines have created a level of uncertainty never before seen in our industry.
Writer Kenneth Harvey of the Washington Post Writers Group, refers to the new appraisal guidelines created to protect the consumer as “by far the hottest controversy in real estate this summer, and the process could directly affect the value of your house—probably negatively-- by tens of thousands of dollars.”
The spotlight is becoming focused on low- ball valuations and the new rules guiding appraisers.
Typical of the problem is your current situation. The appraisers, under the new system, are unfamiliar with the local market, inexperienced, or both, and are using distressed sales as comparables. Many of the distressed properties that are used as comparisons are in poor condition, and in some cases lack appliances, doors, plumbing and lighting fixtures. Some of the so-called comparables are even located in totally different, less desirable areas.
The director of the Federal Finance Agency declared that they are monitoring the situation and considers the view of all market participants important.
Until the new rules are modified, my advice to you is to negotiate. My experience has been that if you have a willing buyer and a willing seller you will ultimately come to terms that are beneficial to both buyer and seller.
First, ask the buyer if he/she is willing to honor the accepted purchase price. The buyer will often times agree to close the sale as negotiated, especially if he/she just had a similar experience in selling their own property.
Some buyers may be nervous about going ahead with the sale. In this case, splitting the difference is a commonly acceptable and agreeable solution. In other words, since the appraisal is $30,000 below the offer price, the buyer agrees to come up $15,000 and the seller agrees to come down $15,000. This solution is usually considered a win-win.
Contesting the appraisal, while usually a last resort, is a viable option. Ask your real estate agent to gather comparable sales that support the offer price and submit them to your lender. If the appraiser won’t budge, I would ask for a second appraisal. If it comes to ordering another appraisal, I would suggest that the buyer be in agreement and you had better be prepared to pay for it. There is no argument that paying an extra $3-500.00 for an appraisal is definitely worth adding an extra $30,000.00 to one’s appraised value.
I find that the risk of a lower appraisal can be minimized by meeting the appraiser upon his/her initial visit to the property and being armed with comparable sales.
Being ready to negotiate is a matter of good home $$’s and Sense!
Please visit www.seehometown.com for listings, to access MLS, to find an agent and to get information about Auburn, California and Placer County.
Labels: appraisal, appraiser, Auburn home values, low appraisal
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