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If you have ever sold a home you have heard your Realtor tell you about the comps in the neighborhood. This is how real estate agents determine the price of your home. But with falling prices and slow moving sales the job of an appraiser to determine the local comps, or comperative prices, is getting much harder.

Real estate is local, that has been a mantra here even as we try to write about national real estate trends and issues. While macro economical issues affect the general market, the pricing of homes just one street apart for essentially the same sized home can be miles apart.

The need for a great appraiser with lots of local knowledge is more important than ever. Take my home for example. The subdivision I live in is very nice, not bragging but trying to set the stage.

Just behind us through a green belt and with road access more than a mile away, is another section of town where they built some larger homes that are not as nice. They are intermixed in an area that has gone rental and some section 8. And I am not being judgemental, that is the neighborhood we moved from into our present home.

If I was to sell right now, one of my biggest fears is a lazy appraiser or worse an appraiser who does not know the area. If they take comps from the closer homes my value would drop significantly and the future buyer might have a hard time borrowing in this tough market.

But if the appraiser understands my market well, they would know the comps come off of the road we are on and our home would be a deal. So going into the listing of a home I know that any potential sale will be in the hands of whichever appraiser the buyers lender hires.

For a real estate agent or appraiser to truly deliver exceptional service, the lesson is they have to know the market especially well in these tough times. Otherwise there  will be lots of work for few sales until lending restrictions lighten up.

The niche for boutique or specialized agencies that specialize in a market will be even more valuable. I have met with one agency recently that serves only one community. Landfall Realty is a community owned real estate office that serves the Country Club of Landfall in Wilmington, North Carolina. They sell only properties in Landfall and every agent knows every detail on the homes in the community. There is no lost knowledge and they are able to serve their clients well because they are the experts. No one else comes close.

That is a lesson for appraisers and agents, become the expert in a section of your community. You will be very successful in this market being very focused. If you try to do too much you run the risk of diluting your knowledge and your potential.

The bad news is that even appraisers and real estate agents are having a harder time discerning a home’s worth. The old rule of thumb, that houses appreciated 3 to 5 percent annually, no longer applies, although there are areas where home values have remained stable.
“You can’t deal with national and even area statistics,” said Hal London, president of Key Appraisals, Park Ridge. “There are certain pockets of neighborhoods that are holding their own. Even in a given neighborhood, you can have different markets on the same street. The bottom line is you don’t know.” via the chicagotribune.com.

Tags: appraisers, real+estate+agents, local+real+estate, real+estate, mortgage

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