Baton Rouge Real Estate Appraisers

Archive for July, 2009

http://www.batonrougerealestateappraisers.net/ - Baton Rouge Real Estate Appraiser Professionals On Twitter

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http://www.batonrougerealestateappraisal.com/ – Baton Rouge Business Report Offers A Teasing Glimpse Of Downtown Baton Rouge Living

The Baton Rouge Business Report Reporter, Bonnie Bauman, just published a fascinating article on Downtown Living entitled, “Work, live, play, grow”. The article features comments from Downtown / Spanish Town Realtor Specialist, Darrell Gissell. The article can be found here. It’s highly recommended reading.

Here’s a snippet as directly quoted:

“Derek Fitch walks out of his condo in the Kress at Third and Main building with Blue, his Scottie, in tow. Fitch heads to the State Capitol for an early morning stroll, then to the Red Stick Farmers Market at Fifth and Main streets, where he loads up on groceries for the week. He picks up some field-grown tomatoes, an assortment of lettuce and cartons of locally grown strawberries.

To top it off, Fitch treats himself to what he considers to be the breakfast of champions—a miniature chocolate chip pecan pie washed down with a cold bottle of Smith’s Creamery chocolate milk. After going home to drop off the groceries and Blue, he walks the few blocks to the YMCA and hops on an elliptical machine to work off the pie and milk.

From there, Fitch walks to the Irene W. Pennington Planetarium at the Louisiana Art and Science Museum to catch Mystery on the Nile. Then it’s back home to freshen up for the evening. He and his wife have planned a date night, which kicks off at his favorite neighborhood restaurant, Stroube’s Chop House at Third Street and North Boulevard. All day his mouth has been watering at the thought of Chef Justin Ferguson’s signature dish, seared duck with sage grits.”

Baker Louisiana Home For Sale By Owner: 2641 Ray Weiland Drive Baker LA 70714

http://www.batonrougerealestateappraisers.net/ – Greater Baton Rouge Townhome and Condo Market Still Faces Challenges in 2009

I recently performed an appraisal in the gated townhome development, Bromley Townhomes in Baton Rouge 70810, which was further evidence to me that the Post Katrina Very High Pricing and overbuilding of Condos and Townhomes (not to mention too many condo conversions) across Greater Baton Rouge will take some time to absorb and correct. And, the correction is not pretty.

Bromley Towhomes is an upscale, gated townhome development within 1/2 mile of Perkins Rowe where in 2004 to 2006, new 2 bedroom 1,460sf units sold between $189,500 up to $204,900. Legal News records show that resales of the same units have been from $150,000 up to $175,000. In fact, the differences in resale prices were -23%, -12%, -17% and -11%. The unit appraised was valued at only 79% of original sales price. Marketing time periods for these resales was from 80 days up to 899 days on the market. And, there are 2 listings that have been on the market since mid 2008, one of these listings is finally pending after the price was reduced to $160,000. If it sells at 97% List-To-Sales-Price-Ratio, it will sell for $155,200, a difference of -21% off original price. Specifically for these 1,460sf 2 bedroom Bromley Townhomes, a “SMART Appraiser Software” FNMA 1004 MC (market conditions) Study, a much more narrow “Sub-Market” study, showed declining market values of -5.44% since 7/2008, an 8.4 month supply of competing listings and between 29 to 45 competing listings.

A recent search in MLS Areas 52, 53, 61, 62 shows a total of 620 current listings (active, contingent or pending) of Townhomes and Condos – certainly a large number that will take some time to absorb. With some short sales of attached units taking place in this market, it’s an opportunity for investors to buy low hoping to seller higher in the years to come.

CAUTION……..When Purchasing A Condo Or Townhome!

Notes Of Caution Before Purchasing In Any Condo Or Townhome Development

1.) Make Sure The Managing Agency Is Well Intact (that the development is managed well with a good paper trail).

2.) That ALL Association Dues Are Fully Paid (Review The “Current” Budget with a real estate professional that understands and can interpret). Make sure there are ample reserves built up to handle the development into the future. This is brought up to help explain that appraisers across the U.S. are being educated and directed to request documentation on Condo AND Townhome budgets and that IF the budgets are not satisfactory or not funded adequately, to discount the value(s) in those developments. And, my experience has been that these are the developments with some short sale activity – absentee owners not paying their dues. This is a major problem in the overbuilt markets like the State of Florida.

3.) Just because the listing price is lower than the 2006 offering price doesn’t necessarily make it a good deal in 2009. The chart below shows a -10.25% decline in sales prices/market value and represents 955 attached 2 bedroom sales from 1/1/2006 to July 2009, from $100,000 to $200,000 in MLS Areas 52, 53, 61 and 62. Also not that it took 3.5 years to absorb these 955 units or 273 units per year. With 620 units on the market, a portion priced higher than $200,000, it could take 2.5 to 3 years to absorb these excess units. AND, this doesn’t include the large number of units taken off the market that are now rentals because they couldn’t be sold. Again, check out the management and current budget before taking the plunge.

Author’s Bio:

Bill Cobb, CREA, is Greater Baton Rouge’s favorite and most reputable home appraiser frequently called upon by banks, homeowners, and savvy real estate investors to assess property values. A home appraiser with 18 years experience, Bill Cobb brings a wealth of knowledge to the table as a home appraiser.

Bill’s company, Accurate Valuations Home Appraisal Group, serves Greater Baton Rouge (East Baton Rouge Parish, West Baton Rouge Parish, Western Livingston Parish and Northern Ascension Parish).

Contact Bill Cobb and Accurate Valuations Home Appraisal Group for your next home appraisal:

Office: 225-293-1500, Cell: 225-953-0638

Fax: 1-866-663-6065

fastvalue2@cox.net

http://www.batonrougerealestateappraisal.com

http://www.batonrougerealestateappraisers.net/ - Understanding and Using All Of Your Greater Baton Rouge First Time Home Buyer Options

While searching through my RSS this evening, I found this helpful outline to help get through the maze of Using All Of The First Time Home Buyer Options.  The article was written by Steve Kappre, Loan Officer and is directly quoted:

“As a first time buyer, don’t let the excitement of the $8,000 tax credit cause you to miss out on many other home buying options. It isn’t uncommon for a buyer to confuse the federal tax credit with seller credits, down payment assistance, or first time home buyer grants.

First time home buyers have many options.  Utilizing one option does not hold a buyer back from utilizing one or more other options allowed to them as a first time home buyer. This article is written not to go into great depth on each option, but to help you realize the different options available as a first time home buyer and how to utilize each/all of these options.

Read on to understand some common terms and how to take advantage of each option.

Tax Credit

The federal tax credit is the $8,000 incentive that everyone is talking about. Most home buyers that haven’t owned a home in the last 3 years will qualify for this. In general, this credit is realized as a credit for you when you complete your taxes in the spring of 2009 (for 2008′s income).

For example, if you would have normally received $2,000 back after completing your 2009 tax returns, the tax credit would add an additional $8,000, to make your total amount received $10,000. For additional information and guidelines, go directly to First-Time Home Buyer Credit: Answers.

Seller Credit (Seller Concessions)

A seller credit, better known as seller concessions, is a scenario when the seller agrees to pay a certain amount of your settlement costs. The seller may pay a percentage, such as 2, 3, or 6% of the purchase price, or they may pay a dollar amount, such as $2,500 or $5,000.

For more information on understanding seller concessions visit Understanding Seller Concessions | Seller Paid Closing Costs | Seller Contributions | Seller Assist.

Grants for First Time Home Buyers

Many people miss out on first time home buyer grant options. Once a buyer hears about the $8,000 tax credit, they sometimes go deaf to other options, either out of excitement or because they don’t realize they can utilize more than one option.

A grant is a program often issued by a county or state that offers funds to the home buyer for the purchase of a home. Either a flat dollar amount or a percentage of the loan amount is used to calculate the funds offered. A typical grant percentage would be 2, 3, or 4% of the loan amount. For instance, 4% of a loan amount of $100,000 would give you a $4,000 grant.

Grants can be utilized for down payment requirements and/or to pay for closing costs. Depending on the purchase price and the grant selected, a grant can sometimes even cover all requirements the buyer has concerning both the down payment requirement and closing costs.

Down Payment Assistance

As of the date of this article, down payment assistance in the traditional sense is not available.Down payment assistance programs (DAPs) were an option where the seller would indirectly give a buyer the money needed for down payment requirements. These transactions in general had a higher default rate then most, therefore this option is no longer available. Examples were the Nehemiah program or the Genesis program. There is a movement to reinstate these programs. The mentioning of DAPs here is simply to help you differentiate and not confuse them with other options.

How to Utilize More Than One First-Time Home Buyer Option

Here’s where the rubber meets the road. A common example of utilizing all of the above options is as follows:

1. Buyer meets with grant official or loan officer for qualification requirements pertaining to a specific grant option. In our example the buyer will use an FHA mortgage, which requires a 3.5% (of the purchase price) down payment. The purchase price is $100,000, therefore the down payment requirement for this would be $3,500.
2. Loan officer and buyer determine that the use of a 4% grant would be the wisest choice. Since the down payment requirement is $3,500, the financed amount will be $96,500 ($100,000 – $3,500). Based off of $96,500, a 4% grant would be $3,860 (loan amount x 4%, or $96,500 x .04)). Compare the grant amount with the buyer’s down payment requirement of $3,500, and the grant amount is $360 more than the required down payment amount. This type of grant covers the down payment requirements and some additional funds to be applied towards the closing costs.
3. Assuming closing costs are $5,000, here is how you can determine what to request from the seller to get the closing costs paid as well. We can subtract the extra money left over from the grant, in this case $360, from $5,000. Our sum is $4,640. FHA requirements allow the seller to pay up to 6% of the buyer’s closing costs. We don’t need all 6% (or $6,000), we only need $4,640 from the seller. So when the purchase of the home is negotiated, the buyer’s agent negotiates with the seller’s agent that the seller will agree to pay $4,640 towards the buyers settlement fees/closing costs. 
4. Buyer goes to settlement needing $0 to close, and in fact they will get back the money already deposited with the real estate agent and lender.
5. Lastly, the buyer can still maximize the use of the federal tax credit and receive their $8,000 after filing their 2009 tax returns.

All-in-all, in our scenario the home buyer will receive $16,500 for purchasing a home ($3,860 grant + $4,640 seller’s concessions + $8,000 tax credit).  The buyer is able to utilize three separate home buying options and in the end, still have their own money in the bank, which will then get boosted in several months by the $8,000 tax credit. Now THAT is the kind of lending and buyer representation that creates solid, well founded home owners, which is exactly what we all desire.

By working with knowledgeable professionals, you can utilize multiple buyer options to make your home buying experience an amazing event!

If you would like more information, as a buyer, seller, real estate agent, real estate office, financial planner, college or other party, feel free to contact Steve Kappre directly on his cell at 856-419-3561 or via e-mail at steve@stevekappre.com.”