Issues Related to Appraisals For Condemnation

When a property is being taken by the state, a local government body, or a statutory body, the property owner is usually sent a letter that says in effect that they will be taking your property and further stating that they have had the property appraised. The condemnor will usually make an offer to the owner for the appraised value. However, the detail from the appraisal itself is typically limited to raw transactional data with limited or no analysis included in the letter. Sometimes the appraised value and subsequent offer will be fair as the appraised value might have been generated giving significant weight to the Fair Market Value detailed above. However, usually, the owner of the property being taken under eminent domain laws has little evidence of the property's value beyond that being stated by the condemning party. This makes it very difficult to determine if the offer is a fair one?

Any discussion of appraisals in the eminent domain arena should be understood with a few definitions in mind. Thus, we direct the reader to the following Definitions:

Eminent Domain: The right of government to take private property for public use upon the payment of just compensation. The Fifth Amendment of the U.S. Constitution, also known as the takings clause, guarantees payment of just compensation upon appropriation of private property. (Source: The Dictionary of Real Estate Appraisal, 4th Edition, Published by the Appraisal Institute)

Condemnation: The act or process of enforcing the right of eminent domain. (Source: The Dictionary of Real Estate Appraisal, 4th Edition, Published by the Appraisal Institute)

Condemnation Blight: A diminution in the market value of a property due to pending condemnation action. (Source: The Dictionary of Real Estate Appraisal, 4th Edition, Published by the Appraisal Institute)

"Fair Market Value" - Used in Eminent Domain Cases: The fair market value of the property taken is the highest price on the date of valuation that would be agreed to by a seller, being willing to sell but under no particular or urgent necessity for so doing, nor obliged to sell, and a buyer, being ready, willing, and able to buy but under no particular necessity for so doing, each dealing with the other with full knowledge of all the uses and purposes for which the property is reasonably adaptable and available. (Source: Code Civ. Proc. § 1263.320(a), State of California)

In California, recent changes to the law require the plaintiff (the body exercising its right to condemn the property under eminent domain laws) to give the defendant (the party who's property is being condemned) $5,000 for appraisal fees. Other changes in the law also make it harder for the condemner to take the property without having first agreed to the value of the property. These two combined changes in the law should make negotiating with the plaintiff an easier process, as the defendant now has the money to pay for an independent appraisal as well as the power of time given by the requirement that a financial settlement much be reached before the property will be handed over to the plaintiff.

But even with these changes, it is our opinion that in most cases the defendant should seek legal representation, avoid negotiating with the condemner directly and avoid hiring the appraiser on their own.

We have three reasons for these opinions:

1) The appraised value provided to the condemner was written by an appraiser who in all likelihood would act as an expert witness for that side in the event of a trial. As such, it is quite possible that they have not taken to heart the definition of fair market value above (I strongly suggest reading it!). I have been involved in situations where the municipality's appraised value was almost one half of the actual value.

2) Even if you use the $5,000 for your own appraisal, you then have to negotiate with the body yourself. This is an arduous process and you would be dealing with skilled negotiators. Moreover, the appraisal you engage will become part of the record, either in the form of the copy you give the other side, or via the process of discovery before trial. This leads to the third reason to hire an attorney.

3) Most importantly, your attorney should hire the appraiser directly. The appraiser can be hired as a consultant and issue the appraisal in a restricted format. If you and/or your attorney do not like the appraisal, the appraiser, or the results, your attorney can hire a new appraiser without the previous appraisal making it into the court record. That is because it is protected by attorney client privilege.

What to Expect From Your Appraiser

Once you hire your attorney they will likely engage an appraiser that they are comfortable with. Once engaged the appraiser will inspect the property and behind their search for the appropriate comparable sales and rental datum. If the highest and best use is an alternate use, the appraiser will likely be searching for land sales, whereas, if the highest and best use is for continued use, sales will be of similar improved properties. If the property is income producing, or has the potential to be income producing, the appraiser will also likely conduct an income approach. Either way, the appraiser should be looking for the "highest price on the date of valuation that would be agreed to" between a buyer and seller (see definition of Fair Market Value above).

By law the appraiser is an independent third party and this does not change in eminent domain cases. Most appraisers guard their independence vigorously, so it would not be a good idea to try and push or sway the appraiser in the direction you are hoping for. Furthermore, your attorney is hopefully experienced in the field of eminent domain and condemnation law, so you would be well suited to let the attorney handle all but the most tertiary discussions with the appraiser. However, in the event that you disagree with the appraiser's results, you can always ask the appraiser, through your attorney, to revisit the analysis with whatever new information you provide.

Your other option is to hire a new appraiser and keep the original appraisal in the attorney's files. This will protect the appraisal in the event that the case goes to court and the appraisal will not be discoverable.

By James A. Stein

Los Angeles; Orange County Appraisal

Article Source: http://EzineArticles.com/?expert=James_A._Stein

Read More..

How to Search Efficient Real Estate Agents

Finding an efficient real estate agent can be a daunting task as they are relatively few in numbers. It is often said that 20% of the real estate agents do 80% of the business. The agent best suited for you must be an experienced professional who will listen to you, carry out the tasks in an ethical manner and knows your requirements.

All Realtors are licensed to sell real estate and function as an agent but not all real estate agents can be called realtors. Only registered realtors can display the Realtor logo. Registered realtors® belong to the National Association of Realtors and are bound by the Code of Ethics, a comprehensive list containing 17 articles and underlying standards of business practice.

It is a fact that most real estate agents remain in business because their satisfied clients refer them to friends, family, neighbors and colleagues. You can therefore ask the people known to you who they hired and ask them to describe their experiences various real estate agents. Successful agents make customer satisfaction their number one priority. Try to find agents who go above and beyond their responsibilities. You can even ask other real estate agents for referrals. Agents are happy to refer buyers and sellers to associates, especially if the service you need is not a specialty of the agent who is referring you.

There are plenty of Web sites that will refer agents to you though there is no assurance they will be competent. It is likely that the agents they refer are those who have paid the Web site owners a fee to be listed in their directory. Instead it is better to Google the top real estate companies in your area, visit those Web sites and look up profiles of individual agents and their customer testimonials.

Attending open houses will enable you to meet real estate agents in a friendly working environment. Collect their business cards and make notes on them. Pay attention to the listing signs in your neighborhood. Make note of the day they go up and when the sold sign appears. The agent who sells listings the fastest might be the one you should engage. If an agent is result-oriented, he is understandably the more efficient and better organized agent.

Get a copy of the agent's production record. From the agent's production record, you can find out how many homes the agent has sold per year, how much they were sold for and where they were located.

Knowledgeable consumers interview potential real estate agents before finally deciding on whom to hire. A few of the questions you can ask him to assess his worth are:
-How long have you been in the business?
-What is your average list-price-to-sales-price ratio?
-What is your best strategy to meet my needs?
-Will you provide references?
-What are the few things that separate you from the other agents?

A good agent will not hesitate to answer these questions.
-May I see copies of the forms that I will be asked to sign?
-How much do you charge?
-What kind of guarantee do you offer?

By Sarah Jose

Sarah Jose is a Copywriter of Wilden.She has written many articles in various topics related to Kelowna real estate. For more information on Okanagan real estate and any other queries visit real estate Kelowna.

Article Source: http://EzineArticles.com/?expert=Sarah_Jose

Read More..

Real Estate Agents - Choosing a Broker That's Right For You!

In an industry like real estate, where being an agent is an unsalaried position and the business experiences so much turnover, which broker you choose to hang your license with becomes an important consideration for your career.

A vital part of your success will depend on your broker and your broker has a responsibility to support your growth and profitability, so that you will do well. Choosing the right broker involves more than supplying leads, or offering the best commission splits and lowest desk fees!

We encourage you to speak to our agents and see that our environment enables you to make real money! Realizing you made the best decision gives you peace of mind. It is important that a broker understands that it's comforting to know you'll have support when you need it, in addition to technology, and a market presence with a broker that the public wants to do business with!

For new agents, the industry poses many challenges. Almost 85 percent of new real estate agents "drop out" after less than one year in the business, and 15 percent of the remaining don't renew their licenses. We want to make sure you're not one of these statistics. Successful real estate agents are self-starters and go-getters. The beginning of a real estate career often involves lots of rejection. But it's only temporary. As a real estate agent, you are more than a person who shows properties, you become a trusted advisor and your clients look to you for your knowledge and expertise. Buying a home is the most expensive (for most people) transaction of their lives.

By Mitra Karimi-Paydar

Mitra Karimi, President
Crestico Realty
http://www.cresticorealty.com

Article Source: http://EzineArticles.com/?expert=Mitra_Karimi-Paydar

Read More..

Price-To-Rent Ratios As a Measure of Residential Real Estate Value

Price-to-rent ratios represent the cost of a dwelling unit relative to the cost of a comparable dwelling unit. This ratio is also subject to the same variability exhibited by the price-to-income ratio. This is not surprising considering rent is generally paid out of current income, so incomes and rents tend to track one another fairly closely.

The ratio of rent to income has stayed within a range from 13.6% to 16.5% from 1988 to 2006. This demonstrates renters have been putting roughly the same percentage of their incomes toward housing for the 18 years period of data examined. The evidence from the sudden and dramatic changes in the price-to-income ratio and the price-to-rent ratio points to a housing bubble. If these two measures of value had been supported by a rise in the rent-to-income ratio, the increase in prices might have been explainable by a shortage in dwelling units causing all consumers of housing to see an increase in the percentage of their income going toward housing. Evidence from the rent-to-income ratio is to the contrary.

Buyers were never forced to buy; it was always a choice. During the market rally, greedy buyers motivated by rising prices and fueled by loose lending standards were able to bid prices up to ridiculous levels. The exotic financing was not a result of high prices; it was the cause of high prices. Lenders were keen to offer these products because they were not taking the risk, and it allowed them to keep transaction volumes high which is how they were making money.

By late 2007, the market balance had shifted from favoring sellers to favoring buyers. The once greedy buyers were becoming desperate sellers: their dreams of riches from perpetual appreciation were in tatters. Many were forced to sell due to their inability to make their mortgage payments. Those that hung on were homeowners with 50% or more of their income going toward paying off an asset which was declining in value. It was not a set of circumstances to be envied. The crushing debt service burdens when combined with falling prices prompted many of these borrowers to voluntarily default. This predatory borrowing exacerbated lender losses as the bubble deflated.

The Great Housing Bubble saw an unprecedented rise in the price-to-rent ratio. This was strong evidence of the housing bubble. When the bubble began to deflate this ratio dropped down to near its historic norm.

By Lawrence D Roberts

Lawrence Roberts is the author of The Great Housing Bubble: Why Did House Prices Fall?

Learn more and get FREE eBooks at: http://www.thegreathousingbubble.com/

Read the author's daily dispatches at The Irvine Housing Blog: http://www.irvinehousingblog.com/

Article Source: http://EzineArticles.com/?expert=Lawrence_D_Roberts

Read More..

Do You Know the Ten Elements Realtors Constantly Do to Keep Their Clients Reassured?

Seeing the current state in which the real estate market is currently in, realtors need to do all they can to maintain their buyers and sellers confidence levels. If you're unable to maintain a level of confidence in your buyers and sellers, you'll not only be abandoned by them, but you risk getting a poor reputation with their family and friends. In understanding this, here are ten options you have to establish and maintain satisfaction in your buyers and sellers:

1.) Open up: Aside from just discussing business, add a personal touch to things to help your clientele feel calmer and at ease around you.

2.) Speak the truth: While you are interested in keeping things as encouraging as possible, never be afraid to be truthful with your clients. Clients see honestly as a characteristic in a respectable realtor.

3.) Express yourself: Nothing frustrates buyers and sellers more than having to work with a real estate agent that seems like they have better things to do. Having enthusiasm makes buyers and sellers feel appreciated and that you enjoy your job.

4.) Be a giver: One thing that will make clients feel appreciated and confident is if you can offer them some kind of bonus. Examples would be like getting them exclusive discounts from furniture stores or painters.

5.) Keep yourself in the loop: Devote some time every day to find out about what is happening in the real estate news and any alterations in your local market.

6.) Stay in touch: Preserve a level of communication with your buyers and sellers and keep them informed on new homes that fulfill their criteria. This will tell them that you are making their interests a top priority.

7.) Use different mediums: Change things up by contacting your clientele in multiple ways (i.e. phone, email, direct mail, etc). This change will usually be refreshing to your clients and thus gives you their complete attention.

8.) Follow up promptly: If a seller or buyer asks you about something, make it a top priority to get back to them as fast as possible. This will make your clients feel important.

9.) Be obtainable: Provide as many different contacting methods as possible. By doing this, sellers and buyers can contact you in a way that they prefer.

10.) Use change as an advantage: There's no question that the real estate market will change. Instead of shying away from the future, tell your clients that you are willing to try new mediums.

By Josh G.

Josh helps realtors better themselves by showing them realtor news and assets like EstateAnalytics.com. Email him at josh@synadigm.com for help.

Article Source: http://EzineArticles.com/?expert=Josh_G.

Read More..

Real Estate Agents - Useful But Beware

Are you thinking about purchasing real estate? Surely purchasing a house can be an exciting time especially if you're a first time homebuyer but there is also a lot of work involved. There are many services and tools available to help you in your search. Using the assistance of a real estate agent can be very beneficial and an agent may help you find the home of your dreams. There are some things to be aware of before you put your home hunting in the hands of a professional.

Real estate agents are professionals but keep in mind that they are basically salespeople out to make money. They are offering a service and no matter how friendly and personable they are, their job is to sell you a property so they can make a commission. While most are not blatant liars, many will try to downplay negatives and stress positives about a property. They will convince you that you need an agent which is not necessarily the case.

A real estate agent may not explain all of the problems with a property such as pest control problems. Other things they may not be straightforward with are other unseen repairs such as plumbing and electrical problems. You are ultimately responsible to find the problems and then decide how to handle them in the negotiation of the sale. An agent can help advise you but remember that they are eager for a sale so some may tell you a repair is not necessary.

A real estate agent will give you a list of inspectors to use but since they work with the agent they may be eager to let things slide in hopes of future business. It is safer to find a reliable and reputable inspector on your own.

Since real estate agents are out to make money most will not advise you of properties that they will not receive a commission on. A property might be just right for you but they will keep close lipped about a property since they don't want to lose your business. For this reason you shouldn't leave your search entirely in the hands of an agent. Do some searching yourself. Not only will you find potential homes but you can check to see if your agent is looking at all possible properties or they are only looking at ones that will benefit them. You are paying for their services so you have the right to question their work.

Remember that you don't have to use a real estate agent no matter how agents will try to convince you of the contrary. Also remember that real estate agents provide a professional service that can be useful in buying real estate. Only a small percentage are dishonest but beware and find an agent who is reputable.

By Eric J. Slarkowski

The essayist Eric Slarkowski is especially passionate about things associated to cost Calida. You might find out more about his writings on property for sale in Costa Calida, Spain at http://www.alicante-spain.com

Article Source: http://EzineArticles.com/?expert=Eric_J._Slarkowski

Read More..

The Real Estate Outlook For 2009

To say that real estate took a beating in 2008 is a kin to saying a great white shark has some interesting teeth - it is a minor understatement. For many people, the question is whether 2009 will be any better for the real estate market?

If you lined up all the gurus in the world, you would have a line and not much more. In the world of real estate, the relevant gurus are predicting everything from a continued down turn in housing to an absolute turn around come the first quarter...no, second quarter...no, third quarter...well, you get the idea. Every guru has a different opinion, which means one will eventually be right and the others will have to ignore the fact they gave the wrong advice! In short, don't believe them.

So, what can we realistically expect in the real estate market in 2009? Nobody really knows, but there are two potential scenarios that seem the most likely. The first is not so good - the market continues to correct after the real estate bubble. The second predicts a bit rosier outlook in which the market turns around near the end of 2009. Let's take a closer look.

The "El Doom and Gloom" prediction is, unfortunately, supported by a number of basic truths. The first is it is not going to be easier to borrow money. At best, the banks are going back to closely scrutinizing borrowers. At worst, they will only give loans to the best of the best. Either way, this cuts down on the borrowing populace and, in turn, the number of buyers active in the market. Fewer buyers means less demand, which means prices continue to drop.

The second problem arises when we look at the current mortgage portfolios on the market. Everyone knows the nightmares spawned by the subprime and no doc loan failures. Well, guess what. There are a bevy of loans coming due in 2009 and 2010 that have to be refinanced or homeowners will be unable to pay them. This partial ARM loans are the monster in the closet nobody really wants to talk about. If a large percentage of them go into default in mass, it is going to be just as ugly as the subprime mess and would mean that 2011 would probably be the first time we would see the housing market recover in mass.

The second common prediction that 2009 will be the beginning of the turn around is rooted a bit in fact and a bit in politics. The fact element has to do with the Federal Reserve. The Fed, led by Chairman Bernanke, has gone all out fighting the current market problems. The recent lowering of the short term borrowing rate to essentially zero percent is a sign of a Fed that is ready to do whatever it takes. We can count on that attitude continuing into 2009.

Politics is the second element of the positive outlook. We have a pro-government President coming in with a Democratic Congress. Whatever your politics, this portends action by the government. Look for "New Deal" types of proposals to bolster the housing and banking industry. This is a President who clearly intends to hit the ground running, so you can expect action that will help in the short term. Whether it is good for us in the long term is, of course, another question. The overall debt of the country is huge, but it is generally agreed that action must be taken now to overcome the current crisis.

So, what do I believe 2009 will actually end up looking like for real estate? Unfortunately, I think it is going to be rough. That being said, I do believe certain parts of the country will see their markets stabilize a bit. Then again, my prediction is hardly any more accurate at this moment than any other real estate guru! Check back in a year to see who was right!

By Stephan Teak

Stephen Teak is with CommercialLoanStop.com - your resource for commercial hard money loans for creative projects.

Article Source: http://EzineArticles.com/?expert=Stephan_Teak

Read More..