Saline Real Estate and Homes for Sale

When you are buying a Saline home or condo with a mortgage, the bank will require an appraisal, which leaves you wondering "What do you mean Appraisal?"

According to Wikipedia, a Real Estate Appraisal is defined as follows:

Real estate appraisal is the practice of developing an opinion of the value of real property, usually its Market Value. (Real estate appraisal is American usage; many other countries use the terms property valuation or land valuation.) The need for appraisals arises from the heterogenous nature of property as an investment class: no two properties are identical, and all properties differ from each other in their location - which is the most important determinant of their value. So there cannot exist a centralised Walrasian auction setting for the trading of property assets, as there exists for trade in corporate stock. The absence of a market-based pricing mechanism determines the need for an expert appraisal/valuation of real estate/property.

A real estate appraisal is performed by a licensed or certified appraiser (in many countries known as a property valuer or land valuer). If the appraiser's opinion is based on Market Value, then it must also be based on the Highest and Best Use of the real property. For mortgage valuations of improved residential property in the US, the appraisal is most often reported on a standardized form, such as the Uniform Residential Appraisal Report.^[1] Appraisals of more complex property (e.g. -- income producing, raw land) are usually reported in a narrative appraisal report.

So how does this affect you, as either a buyer or a seller?

Whenever there is a mortgage involved in the sale of real estate, an appraisal is required.  The appraisal gives the mortgage lender an assurance that the real estate is worth what the buyer is paying.  In the (unfortunate and unlikely) event that the buyer cannot meet their mortgage obligation, the lender will rely on the appraised value such that the lender will not actually lose money.  The lender will sell the property for the amount they are owed (knowing that it is worth at least as much as they are owed, based on the appraised value), and then turn around and lend the money to the next buyer.

As a buyer, the appraisal (usually ordered by your lender) gives you an assurance that you are not over-paying for the property you are buying.  Generally, though, your Realtor will have already provided you with a CMA (comparative market analysis) so that you know approximately how much the property is worth.  So, is your Realtor's CMA as good as an appraisal?  Generally, again, no.  A true appraisal can only be done by a licensed appraiser.  Some Realtors also hold an appraiser's license, but they are few and far between.  So, the CMA done by your Realtor, and the appraisal done by your lender, should be similar in value, but not exactly equal.

As a seller, the appraisal (ordered by the buyer's lender) gives you an assurance that you aren't "giving" away your property.  Note, however, that the lender is the client of the appraiser (in other words, the lender ordered the appraisal, so the lender gets to know of, and keep, the appraisal information to themselves).  As the seller, you may not get to see the appraisal report.  As in the paragraph above, though, your Realtor will have provided you with a CMA prior to your listing agreement, so you should have a very good idea of what the appraisal report should say.

Sadly, though, there are some unscrupulous appraisers, lenders, and Realtors in every marketplace.  What they do is practice mortgage fraud.

For example, an unscrupulous appraiser could falsify their appraisal by coming up with a value significantly higher than actually exists.  Then the lender, thinking that the property is worth the appraised value, will over-lend against the property.  The extra money ends up with the buyer, who takes off with the money and leaves the property to deteriorate.  Fortunately, such unscrupulous appraisers are very rare, but they do exist.

I'd be happy to answer your questions about appraisals, or provide references for outstanding local appraisers.  Just ask!

If you're ready to start your search for a Saline home or condo, talk to someone with local knowledge!  I'd be happy to meet with you.  Just give me a call at (734) 476-2063, or send an e-mail, "Vance (at) SalineMichiganRealEstate (dot) com".

You can search for homes and condos in Saline here.

I've written previously about my Saline investment picks.  In this article, I'd like to highlight some properties in Saline which I've noticed as candidates for possible investment.

Top Investment Picks for Saline:

One of the simplest ways to determine whether an investment property is worth considering is to look at how the property is priced relative to what the tax assessor thinks the property is worth.  In Michigan, we use the "State Equalized Value", or SEV, prepared by the local tax assessor each year.

As of late August, 2008, there are four properties on the market in Saline that are worth a look for possible investment.  Here's how they look as compared with the SEV.

The house on Goodrich is located a long distance from Saline (about 5 miles), so it's not likely to be a good rental prospect.

The house on Willis is a "manufactured" home situated on a basement.  While it qualifies as "real estate" because of the foundation, it's not likely to be a good rental prospect.

The house on Warner is an all brick ranch, located on 2 acres in York township.  Because it's unlikely that a tenant would be willing to mow the 2 acres, and it's not a good use of your time to mow 2 acres on your own rental, this is also not a good rental prospect.

The house at 411 S. Harris in Saline is one to consider.

In fact, during our September meeting of the Saline Real Estate Investors meetup, to be held on Thursday, September 4, we'll do a full evaluation of the investment value of 411 S. Harris.  I look forward to seeing you at our Investors meeting.

If you're ready to start your search for a Saline home or condo, talk to someone with local knowledge!  I'd be happy to meet with you.  Just give me a call at (734) 476-2063, or send an e-mail, "Vance (at) SalineMichiganRealEstate (dot) com".

You can search for homes and condos in Saline here.

Take a look at this new listing of a home for sale in Ann Arbor Michigan, located at 1218 City Drive, Ann Arbor, MI  48103.  Priced at $169,900, it is available immediately.

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You can count on a review of the Ann Arbor real estate market statistics around the middle of each month, which I have done consistently since 1996.  What I'd like to focus on in this month's article is the continuing improvement in the overall market for an Ann Arbor home or condo.

Each month, I review all of the homes for sale (column 2) in Ann Arbor within defined price ranges (column 1), and those homes where the sellers have accepted a sales offer from a buyer (columns 3 & 4 - Percent Pending).  I also review all of the sales in past 30 days in each price range (column 6).  The results for August 2008 are shown in the table below:

Using the data shown above, I track the overall "percent pending" for Ann Arbor, as shown in the chart below:

In the chart above, it would appear that the Ann Arbor market is deteriorating again, as the percent pending is falling off from summer highs.  In comparison with the percent pending for most of 2007, the Ann Arbor market is in much better shape.  But let's dig into this a bit further.

The chart below shows both the number of homes available for sale (the top line), and the number of homes where the sellers have accepted an offer (the lower line).

It's on the chart above where we get a better understanding of the improvement in the Ann Arbor market.  Specifically, the number of homes available for sale never made a huge jump in the spring, and now the number of homes available for sale is declining.  In fact, our "inventory" of homes to be sold has declined more than 40% since our peak in 2007.  That's a good thing if we're to get into a better balance between sellers and buyers.  Oh, for those heady days of a strong seller's market like we had back in 2000!

The moral of the story?  List your home for sale only if you're totally committed to getting it sold, and price it competitively.  If not, be prepared to be on the market for a lot longer than our present 4.3 months of supply.

If you have questions about your specific situation, or if you're considering selling your Ann Arbor home or condo, work with an agent with local knowledge and experience.  I'd be happy to meet with you!  Just give me a call at (734) 476-2063, or send an e-mail, "Vance (at) SalineMichiganRealEstate (dot) com".

You can search for homes and condos in Ann Arbor here.

Should you build or buy your home in Saline?  That's a great question these days.

Yesterday we learned that, nationally, builders started new homes at the slowest pace since 1991.  One look around the Saline area, and you can see the same outcome here.  Still, there are still options available if you want to build a new home.

But is building a new home the right choice, right now?

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