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What You Need to Know About Appraisers

by Connie Yoshimura

     You would think that with a continuing historic low of only 322 residential listings for sale in MLS last week that an appraiser should not have any difficulty in meeting the agreed upon sale price that has already been established between the buyer and seller.  But, unfortunately, that does not always occur and buyers and sellers are forced back to the negotiating table or the transaction fails with everyone walking away unhappy and frustrated. 

      During the last real estate recession there were a lot of accusations of collusion between mortgage brokers, real estate appraisers, realtors, buyers and sellers.  Some properties were sold low and resold for a higher price within a few hours, days or weeks with purported kick-backs to those involved.  As a result, appraisals are now ordered by independent third parties that are not affiliated with mortgage brokers or realtors.   New appraisers are also now required to have at least a two year college degree and must also go through an internship program working for a licensed appraiser for up to two years.  During that time, their work is supervised by a licensed appraiser in the state of Alaska. These licensed appraisers in Alaska are all on a blind rotation list and when their name goes to the top of the list, their turn comes whether or not they are familiar with the type of property to be appraised unless they inform the lender that they wish to decline the order due to lack of experience which rarely happens.  A little known fact is that the state of Alaska has reciprocity with several other states regarding the qualifications of an appraiser.  Thus, an appraiser from another state, if they are on the approved list, could end up doing an appraisal in Anchorage without even being a resident of the state and with limitations of understanding the local market.

      Although your realtor cannot unduly influence the appraisal process, we have found it to be beneficial to ask the appraiser some questions when he/she calls for access to the property for inspection.  We thank him for calling and tell them we’re looking forward to working with him.  Then, we ask if they are a member of the Alaska Market Data system which is a data collection organization that reputable appraisers subscribe to in order to share information. The membership is not free and appraisal companies pay $10,000 per year in order to be a member plus monthly dues.  You can check out whether an appraiser is a member at www.amdsnetwork.net.  We also ask if they are a resident of the state of Alaska which insures that they have some general market knowledge. We also inquire if they are a NONMLS member.  This membership allows them to research MLS information about active, pending and sold properties.  We also ask if they are familiar with the geographic area or price point of the property to be appraised.

      A realtor can’t disqualify an appraiser if he answers no to any or all of these questions but it puts the appraiser on notice that they are dealing with an informed seller’s representative and if they are uncomfortable may elect to voluntarily decline the order.  With today’s historic low inventory and buyers scrambling to find a home to purchase, it would seem unreasonable for an appraiser to miss an agreed upon purchase and sales price for a few thousand dollars but that occurs more frequently than one might think.      

AHFC Offers Help to Struggling Homeowners​' Associations

by Connie Yoshimura

     Condos have been the segment of the housing market that has been the slowest to recover from our most recent real estate recession.  However, due to lack of current inventory (there is now less than a two month supply of condos for sale between $150,000 and $250,000) condos are enjoying a fourth quarter comeback with a 4.08% rate of appreciation in 2013.   That’s the largest one year appreciation rate in over 5 years.  Over the last six months, approximately 100 condos have sold per month.  That’s a lot of field goals from an all-time low of 35 condo sales in January 2012.  All geographical areas have benefitted from this resurgence with an overall 16% increase in the number of units sold and a 32% decline in days on the market in 2013.

     However, extending the metaphor on this Super Bowl Sunday, there’s a lot of locker room strategies, planning and practice that goes into making a successful condo association which is the governing body of a condo community. There have been very few new condo developments in the past five years and many existing homeowners associations are struggling with heavy dues and assessments for replacement of common areas.  Depending upon whether the condo development was organized as a site condo with limited common areas or as a full service condo community, replacement and repairs can be a heavy burden on condo owners.  And the higher the dues, the more difficult it is to find a qualified new condo buyer as the required dues figure prominently in their ability to qualify for a mortgage.  An inadequately funded HOA can also result in loss of long term mortgage investors like VA and FHA, the most popular mortgage programs for condo financing.

     And, unfortunately, most of our condos were built in the early l980’s or l990’s and they are now reaching the age where roofs and driveways need to be replaced, exteriors repainted, decks replaced, et cetera.   If there has not been adequate reserves collected as part of the monthly homeowners’ association dues, special assessments have to be levied.  That’s where our state housing authority (AHFC) has come to the rescue with a winning strategy.  Recognizing the aging condo supply, AHFC has devised a loan program available to HOA’s which finances major improvements and/ or repairs to common areas.  The loan amount is determined by AHFC to complete a project and/or restore reserves.  The loan term is up to 15 years and the interest rate is established at the time of underwriting based on AHFC’s multi-family rate.

     The collateral is secured by a note and unrecorded assignments of income.  It does not lien the individual units or require a special assessment.  s facing special assessments.  The upkeep and replacement of common areas, including fencing and landscaping, add value to a community and individual units.  This relatively new and little known AHFC program is an overtime touchdown for struggling associations.  To apply visit the AHFC website (www.ahfc.us), tab under other loan programs and look for “Association Loan Program”.

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Dwell Realty
3230 C Street Suite 100
Anchorage AK 99503
907-646-3600