Three traditional approaches to property valuation

Depending on the type of property to be appraised and the type of appraisal report to be delivered, real estate appraisers employ three different techniques for property valuation. They are the sales comparison approach or the market data approach, the cost approach and the income approach or the income capitalization approach.

The sales comparison approach or the market data approach compares the property to be valued to similar properties with similar features that have been recently sold in similar transactions, considering all such factors that affect the valuation of such property. The value of the property is usually the sum of the values of all the components of the property that affect utility.

The cost approach is based on the assumption that no prudent buyer or investor would pay more than the cost that would be incurred to build a similar or equivalent property. The method includes determination of the cost of the site, estimation of the cost of improvements and making adjustments for depreciation. The depreciation can be due to time, wear and tear, and obsolescence.

The income approach or the income capitalization approach is usually used for estimating the market value of properties that generate income such as office buildings, apartment buildings, shopping centers and warehouses. The approach is based on anticipation of income or expectation of income from the property in future. This method considers mainly two factors. One is the market rent that can be expected to be earned by the property and secondly, the resale value of the property.

Although it is not required that an appraisal process uses all the three approaches to determining the value of a property, the most reliable appraisal would be one that uses all the three techniques.

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Matt Moore Appraiser, Newtown amc / matt moore, Matt Moore AMC, Maverick amc / matt moore, Nationwide amc / matt moore,

What should you look for in an appraisal report?

A professional, accurate, unbiased appraisal helps the seller get a fair price for his property and the buyer a fair value for his money. A good appraisal is important to help ensure the offer is competitive while it is also able to fetch a reasonable price. A good appraisal also helps in closing a quick sale at an appropriate price. Staying in the market for too long may reduce the chances of a property being sold at a good price, or worse, it may not be sold at all.

Liberty One AMC, LLC, Newtown, PA is an appraisal management company owned and operated by full-time real estate appraisers and the company has its presence in all 50 states. The company has a team of skilled, professional appraisers who are fully accredited, and have a reputation of delivering quality reports within scheduled time. Steered by Matt Moore, President, the company is known for delivering high-quality, accurate reports thus ensuring fair value to all concerned. The following are the essential points that a home appraisal should include:

·         The report should include all details about the home - both factors that would help push up the price of the house and those that may cause to lower its value. This would also give the seller a chance to address any such issues that are amenable or restorable before putting the property up in the market.

·         The report should contain a comparison of similar properties with similar features in the same neighborhood or locality.

·         The report should have a description of the neighborhood and all its features that could affect the price of the property.

·         The report should study the real estate market of the region.

·         A thorough report will also give an estimated period within which a sale should happen.

Having said all of the above, it is advisable to get the appraisal of a property done just before it is put up for sale. This would ensure that all of the details mentioned above are relevant to the time of sale of the property. If the appraisal had been done much before the time of sale, it is possible that the actual value of the property may have increased or decreased from what it was at the time of appraisal.

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Matt Moore Appraiser, Newtown amc / matt moore, Matt Moore AMC, Maverick amc / matt moore, Nationwide amc / matt moore,

Modular, manufactured and site-built homes

Modular and manufactured homes – technically defined, they are different. So are site-built homes. This difference is an important factor that affects the value of a home – both its price and resale price. So in case you are planning to buy a house or build one, it would be worthwhile to know the difference. There are different restrictions set on building these kinds of homes. If you are planning to acquire a house, a professional appraiser or a good appraisal company may be able to give you relevant advice on the value of the house. If you are planning to sell a house, an appraisal would still help you sell it for a good price. In the event of purchasing a new property, it is essential that you buy a house with good resale value. This will ensure good returns on your investment at a future time.

Modular homes, oftentimes confused with manufactured homes, have the following characteristics.

• They comply with all building codes specific to the state, region or locality where the house is or would be located.
• They are built in sections at a factory, transported to the site where they are put together by contractors.
• The houses undergo inspection by local building inspectors who make sure they are built to requirements and appropriately. A good modular home would be as good as a site-built home both in durability and as an investment.
• In comparison to site-built homes, modular homes can be less expensive though this depends entirely on the plan and structure of the house.

Manufactured homes are similar to modular homes in construction though not in utility.

• They need to comply with the Federal building code or the HUD code and not just the local building codes.
• Manufactured homes are also known as mobile homes or trailers. However, the term ‘mobile homes’ are referred to those homes built before the 1976 HUD Code.
• Manufactured homes are prefabricated on non-removable steel chassis, sections are transported on their own wheels and assembled at their destination.
• They undergo inspection by local building inspectors.
• As they do not stand on a permanent foundation, refinancing is difficult and complicated. They depreciate in value.
• They are less expensive than modular and site-built homes.

Site-built homes are traditional homes and have the following characteristics.

• They comply with all state and local building codes.
• They are constructed at the building site.
• They generally appreciate in value with only factors such as location, utility, quality, type and size of construction affecting their value.

Housing developments allow site-built homes though they stipulate certain minimum requirements. Some housing developments allow modular homes while some don’t. So it is absolutely essential that deed restrictions are investigated and interpreted thoroughly not just before the planning stage of the structure but before buying the land where the house would be located.

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Matt Moore Appraiser,  Maverick amc / matt moore, Nationwide amc / matt moore, Newtown amc / matt moore, Matt Moore AMC

Condominiums versus townhomes

Condominiums and townhomes – the general public seem to be always confused as to what the terms mean and how they are different if they are different at all. Well, in technical terms, they are different, though the building structures sometimes appear more or less similar.

Condominiums and townhomes are individually owned houses attached to one another.

Townhomes are attached in a row, and together they form one whole building complex. In a condominium, houses may be adjacent or stacked upon one another. The houses may be single story, or 2 or 3 story units or they can be units in a high-rise building. There is also a type of condo more recently developed where houses are built in a cluster as detached or freestanding houses.

A townhome owner owns the house and the land. He or she also owns the garage, the yard and the roof of the dwelling unit. But a condo owner does not own the land on which his or her home stands. They only own the dwelling unit, that is, the inside of the dwelling unit in structures where the houses are attached. All the common areas including the yard, stairs, walkways, amenities, etc. are owned, shared and maintained by all the owners of the condominium.

Both condos and townhomes have homeowners’ associations which take care of the maintenance of the common areas and the amenities and structures within the common areas. For this, each owner or resident pays a fee to the association usually on a monthly basis.

As the owners of both condos and townhomes own the space inside their respective dwelling units, they can do maintenance and improvements within that space as and when they wish. Walls inside the living space can be painted as, when and how they wish. However, it should be noted that they do not own the walls of their homes, so the owners have the privilege of painting, repairing and improving only in the space within the walls of their homes.

Each association may have its own set of rules and system of functioning. They are generally similar though there are slight variations among associations. Residents or owners will have to follow the guidelines set by their associations as regards ownership and sharing of costs and responsibility of maintenance of common areas and amenities. All of these factors are closely scrutinized by the appraisal company while valuing a condo or a townhouse.  

 

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Matt Moore Appraiser,  Maverick amc / matt moore, Nationwide amc / matt moore, Newtown amc / matt moore  

 

Types of residential property

Liberty One AMC is a national appraisal management company, which under the helmsman ship of Matt Moore, the CEO and President of the company, provides appraisals of all types of real estate, both residential and commercial.

There are different types of residential properties. Mainly they are categorized as single family housing and multi-family housing. The difference is that in the former a property is not attached to another, while in the latter a property may be a part of a complex, small or big.

Single family homes are buildings that stand individually, not attached to another, typically with a courtyard surrounding it. Single family homes can also be part of condominiums, in which case the land is co-owned by the owners of the rest of the residences in the condominium. Patio homes, courtyard homes, villas, cottages, cabins, etc. fall under the category of single family housing.

Multi-family housing refers to those homes that do not stand alone but form complexes that can be of different configurations. Duplexes, triplexes, quadraplexes, large high-rise complexes with plenty of apartments            or flats, etc. are examples of multi-family housing.

Around the world, the single family homes are known by different names. A ‘single family home,’ as it is referred to in the U. S., may be referred to as a ‘detached house’ in the U. K., a ‘single detached dwelling’ in Canada, and a ‘separate house’ in New Zealand. These are just a few variants of the same term which has several other versions to it too.

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Matt Moore Appraiser,  Maverick amc / matt moore, Nationwide amc / matt moore, Newtown amc / matt moore  

What an appraiser can look forward to at Liberty One AMC

Liberty One has a very clear, transparent and professional system of doing their business. From the time an appraisal order is placed by a client until the completion and delivery of the appraisal report, the process is set. The appraisers are personally screened by Matt Moore, the President of the company. Once selected, the appraiser can look forward to building an excellent career with this national real estate appraisal management company. The Liberty One system has a lot of built-in validation measures which ensure that the appraiser provides quality service to the client.

 

The company has a 24-hour online system for receiving orders. Once an order is booked, whether online or otherwise, a liaison is assigned to the client at the earliest.  The liaison keeps the client connected to the appraiser, and constantly informed about the progress of the work.

Compliance with all regulations pertaining to the state and the locality that the property is located in is assured by the company. So it is the duty of the appraiser to be always updated on all regulations and guidelines. However, the appraiser gets full and consistent support by the company throughout the process of an appraisal on all matters and issues related to the order.

The appraiser’s report is thoroughly reviewed by an experienced professional appraiser of the company or by a leading nationally accredited appraiser prior to submission. This assures the quality of the report submitted. The appraiser is expected to incorporate all revisions as requested by the client, and the reports are to be delivered on the same day.

An appraiser, over and above, does not have to bear any fees or costs while working with Liberty One AMC. 


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Matt Moore Appraiser, Nationwide amc / matt moore, Maverick amc / matt moore, Newtown amc / matt moore 

Six important things to consider while purchasing commercial real estate

Location is the main factor that decides the value of a property, whether commercial or residential. There are a few other major factors too that raise or lower the value of a property. These factors should be given a close scrutiny before finalising the purchase of commercial real estate. One cannot afford to realise too late in the day that taking the property on lease would have been more sensible than purchasing it, especially when resale could turn out to be difficult for the same reasons. The following is a basic list that one may check out before purchasing any commercial real estate.

• Location: The location of the property is important not only as regards whether it is in a prime area, but whether it is conveniently accessible also to customers, clients and other associated people who are likely to frequent the place.
• Parking space: Does the property have enough parking area for the number of vehicles that are expected to need parking facility generally on an average.
• Physical state of the property: One has to find out how good or bad exactly is the physical condition of the property and whether the price quoted would be justifiable. One also has to make sure that the unavoidable repairs and expected renovations are possible on the property both in terms of practicality and legality.
• Utility of space: Consider the space available and whether it would suit the nature of one’s business. One also has to make sure that a reasonable amount of changes would make it suitable for one’s business. The amount of time and money that would be invested in making the changes should also be taken into account while inspecting the space.
• Potential for expansion: If the business has immediate scope for expansion, the property should also have the same to accommodate the changes that accompany the expansion.

Lease value of the property: Last but not at all the least, consider the net lease value of the property. This is relevant in the event of one’s deciding not to expand the business for the time being, in which case the extra space may be leased out. Having an insight into the current and future lease values will also be helpful in determining what would make more sense – to take the property on lease or to buy it.


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Matt Moore Appraiser, Newtown amc / matt moore, Maverick amc / matt moore, Nationwide amc / matt moore