US home resales unexpectedly drop 2.7 (Real Estate Appraisal) percent in August – Daily Times

US home resales unexpectedly drop 2.7 percent in August – Daily Times
WASHINGTON: US home resales dipped unexpectedly last month after a four-month streak of gains, providing evidence that the housing market recovery remains fragile. Sales dropped 2.7 percent to a seasonally adjusted annual rate of 5.1 million in

Real Estate Appraisal – Real Estate Valuation

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Real estate valuation for single family homes is typically done by using comparable sales. With income properties this just doesn’t work well. Imagine if you are looking at a 24-unit building. It would be difficult to find similar ones nearby that have recently sold.

It’s also not ideal to use replacement costs for income property appraisal. How do you figure replacement cost if there is no land for sale nearby with proper zoning? This is used as a secondary method, though, and can tell you if maybe you should be building instead of buying.

Real Estate Valuation By Cap Rate

Income properties are bought for the income. Income, then, is what is used to determine value. The rate of return investors in a given area expect gives you the capitalization rate, or “cap rate” for the area. This is what you use to accurately appraise an income property. Below is a somewhat simplified explanation.

The process begins with the gross income of a property. You then subtract all expenses, but not loan payments. For example, if a building’s gross income is $82,000 per year, and the expenses $30,000, you have a net (before debt-service) of $52,000. You then apply the capitalization rate to this figure.

Suppose the acceptable cap rate in the area is .10, for example (ask a real estate agent), meaning investors expect a return of 10% on the value of the property. You simply divide the income of $52,000 by .10. $520,000, then, is the indicated value of the building. Suppose the usual rate is .08, meaning investors in the area expect an 8% return. Then the value would be $650,000.

Easy Real Estate Valuation?

Take net income before debt-service, and divide by the “cap rate:” It’s a simple formula. However, the tough part is getting accurate income figures. Did the seller show you ALL the normal expenses? Did he and exagerate the income? Suppose he stopped repairs for a year, and also showed you the “projected” rents. In that case, the income figure could be $15,000 too high. The building would be worth $187,000 less (.08 cap rate) than your appraisal shows.

One thing smart investors do when buying, is to separate out income from vending machines and laundry machines. If these provided $6,000 of the income, that income would add $75,000 to the appraised value (.08 cap rate). Instead, do the appraisal without this income included, then add back the replacement cost of the machines (probably much less than $75,000) to arrive at a valuation.

Of course, you should be careful with any real estate appraisal method. There is no perfect appraisal method, and all are only as good as the figures you plug into them. If used wisely, though, appraisal by capitalization rates is one of the most accurate methods of real estate valuation.

About the Author

Steve Gillman has invested in real estate for years. To learn more, get a free real estate investing course, and see a photo of a beautiful house he and his wife bought for $17,500, visit http://www.HousesUnderFiftyThousand.com

Real Estate Appraisal – Operating Systems Home Inspection from A to Z – DVD – Real Estate Home Inspector, Homeowner, Home Buyer and Seller Survival Kit Series

Operating Systems Home Inspection from A to Z – DVD – Real Estate Home Inspector, Homeowner, Home Buyer and Seller Survival Kit Series Don’t let your dream house be a nightmare in disguise! Everything you need to know about Real Estate – from Asbestos to Zoning. This 5-star rated DVD has over an hour of video and as an added bonus you also get the 80 page HIB DVD Companion Guide e-Book. This DVD shows the precise steps to follow to inspect all of the OPERATING SYSTEMS of a home.

The OPERATING SYSTEMS DVD topics include: heating systems (gas, oil, steam, hot water, and hot air heating), air-conditioning, water heaters, plumbing, well water system, septic system, electrical system, gas service, and auxiliary systems. Health Concerns topics including: asbestos insulation, radon gas, and water testing.

The INTERIOR and EXTERIOR inspection topics are covered in our other DVD that can be purchased separately. The INTERIOR and EXTERIOR DVD topics include: roof, chimneys, siding, eaves, gutters, drainage and grading, windows, walkways, entrances and porches, driveways, walls and fences, patios and terraces, decks, swimming pools, exterior structures, wood destroying insects, garage, kitchen, bathrooms, floors and stairs, walls and ceilings, windows and doors, fireplaces, attics, ventilation, insulation, basement/lower level, water penetration.

This is definitely the best home inspection DVD series on the market! Created by Guy Cozzi who is a licensed appraiser, home inspector, consultant, and real estate investor. This top selling author has been quoted as a real estate expert by the New York Times and many other publications. He has been a guest speaker on real estate investment TV shows for years. Guy Cozzi has taught thousands of people how to inspect, appraise and invest in real estate and provides advice to many banks and mortgage lenders.
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I own a very successful home inspection business in California. We use all of this authors products to train my staff since they are the by far the best products for real estate training on the market. We originally found out about these products through excellent book reviews in the local real estate publications. From that we learned the following details and decided to purchase the whole “Real Estate From A to Z” series by this author:

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St. Louis (Real Estate Appraisal) MO Real Estate Auctioneer Paul Roesch Earns Prestigious CDPE – PR.com

St. Louis MO Real Estate Auctioneer Paul Roesch Earns Prestigious CDPE – PR.com
Father Time Auctions, Real Estate and Estate Auctioneers, www.fathertime.com today announced that St. Louis Auctioneer and Agent, Paul Roesch AARE, CES, CDPE received his designation as Certified Distressed Property Expert (CDPE), having completed

Letter from certified general appraiser – Hillsboro Star-Journal
I had to comment on the letter to the editor about assessments. As a certified general appraiser who works in fee appraisal, it makes me cringe to think what life would be like as a county assessor. I have completed more than 400 hours of intense