Understanding the Tax Appeal Process in Westmoreland County, PA

In Westmoreland County, PA, a significant number of homeowners find themselves grappling with property tax assessments that seem higher than they ought to be. In some cases, property owners don’t even know what their assessed value is or how it relates to their property tax consequence. This is a crucial issue because with the common level ratio set at 10, an over-assessment means you're likely paying more in property taxes than you should be.

As an example, my own experience sheds light on this problem as I have recently applied for an appeal. My condo has an assessed value of $26,590, which implies a market value of $265,900 according to the common level ratio. Yet, the highest sale price within my plan has only reached $203,000 and this sale was a unit that had been completely gutted and remodeled.

If you're facing a similar predicament, it's important to know that appealing your tax assessment is a viable option. The appeal process, while it might seem daunting, is quite straightforward when broken down into its components. The first step involves examining your assessment to gauge how your assessed value compares with what you believe your property is truly worth. This initial step is crucial for setting the stage for your appeal.  Westmoreland County has not re-assessed since 1972 and is using these base year values for your property. With the current common level ratio at 10, take your assessed value and multiply it by 10. If this number is higher than what you feel your property’s current market value is, then you could be paying more in taxes and be a good candidate to file for an appeal.

Gathering evidence becomes your next task. Seeking the expertise of a professional appraiser can significantly strengthen your appeal. A detailed appraisal report not only provides solid evidence to support your claim but also demonstrates a professional evaluation of your property's market value. The cost of the appraisal can be a small investment compared to the amount of taxes you could be saving going forward.

Being mindful of deadlines is equally important. The appeal process is bound by strict timelines, and missing a filing deadline could delay your appeal by a year. Westmoreland County has a deadline of August 1st and missing this deadline could mean waiting another year to save on your taxes.

Finally, preparation for the hearing is the culminating step. This involves not just being ready with your documentation and evidence but also understanding the nuances of how to present your case effectively. The hearing offers you a platform to argue your case, and being well-prepared with a certified appraisal in hand can significantly influence the outcome in your favor.

Navigating the tax appeal process in Westmoreland County doesn't need to be an overwhelming challenge. With a methodical approach, starting from understanding your assessment through to the hearing, the path to potentially reducing your tax burden becomes clearer. As an appraiser myself, I'm navigating this path alongside many of you, aiming not just to reduce my own tax liability but also to ensure fairness and accuracy in property tax assessments. The objective is to ensure that each homeowner pays their fair share, based on a true and fair valuation of their property. If you feel that your property is over-assessed, considering an appeal is a step worth taking.

Dollars and Sense: The Significance of Knowing Your Home's Worth

You would have to be living under a rock or in an area that is completely off grid to not be somewhat aware that real estate prices have been fluctuating and increasing significantly in many areas over the past couple of years. If you have not purchased or refinanced recently, your homes value might have changed from where you thought it was just 12 -18 months ago. Knowing the value of your home can be important for many reasons of which, here are a few:

Financial Planning

The value of your home is a significant component of your overall net worth. Your home is likely one of your most significant assets. Knowing its value allows you to calculate your net worth accurately. Understanding its value helps you make informed decisions about your financial planning, such as determining your assets, calculating your equity, or evaluating your borrowing capacity.

Selling or Renting

If you're considering selling or renting out your property, knowing its value is crucial. It allows you to set a competitive price that aligns with the market, ensuring you don't undervalue or overprice your home.

Refinancing or Home Equity Loans

When refinancing your mortgage or applying for a home equity loan, the value of your home plays a vital role in determining the amount you can borrow. Lenders assess the loan-to-value ratio, which compares the loan amount to the home's appraised value, to determine eligibility and interest rates.

Property Taxes

The value of your home often influences property tax assessments. Local tax authorities use property values to calculate the amount of tax you owe. Knowing your home's value helps you ensure that you're being taxed fairly and can plan for potential increases.

Insurance Coverage

Understanding the value of your home is essential for obtaining the appropriate insurance coverage. If your home is underinsured, you may not receive sufficient compensation in the event of damage or loss. Conversely, overinsuring your home means paying more in premiums than necessary.

Investment Decisions

If you're considering real estate as an investment, knowing the value of your home can help you assess its potential return on investment, evaluate rental income potential, or make informed decisions about buying additional properties.

It is important to note that home values can fluctuate over time due to various factors such as market conditions, location, renovations, or changes in the neighborhood. Therefore, regularly monitoring and assessing your home's value is important for staying informed. If you would like to check out more information regarding the importance of knowing your homes value, check out the following articles:

https://www.homes.com/blog/2017/03/benefits-of-knowing-your-homes-value-whether-you-are-staying-or-selling/

https://www.homelight.com/blog/check-house-value/

VA's Tidewater Process- Riding the Waves to Appraisal Fairness

When it comes to appraising homes for buyers using VA-backed financing, the Tidewater process plays a crucial role in determining fair market value. This procedure, implemented by the Department of Veterans Affairs (VA), aims to protect the interests of veterans.

What is the Tidewater process and what is its significance in VA-backed home appraisals?

The Tidewater process, also known as the Tidewater Initiative, is a specific procedure used by the Department of Veterans Affairs (VA) when appraising a home for a buyer using VA-backed financing. Its purpose is to protect the interests of veterans and ensure fair market value. The Tidewater process primarily applies when the appraised value of the home is believed to be lower than the agreed-upon purchase price.. Here's how it works:

A VA-approved appraiser, impartial and unaffiliated with the transaction, is randomly chosen to conduct the appraisal. The appraiser works to value the property, considering its size, condition, location, and comparable sales in the area. If the appraiser determines that the appraised value appears that the estimated market value might be lower than the purchase price (this can happen at any point in the process), they promptly inform the lender, which initiates the Tidewater process.

At this point, the lender has the opportunity to provide the appraiser with any relevant information that might influence the property's valuation, such as recent comparable sales or a list of property improvements. This information can be provided by any party to the transaction whether the buyer, seller, agents or the lender themselves. The appraiser reviews any additional information and when appropriate, uses this information within the appraisal. Even if this information has already been considered and it did not make any substantial changes to the value, the VA requires the appraiser to make comments within the report reflecting this.

From the buyer’s perspective, if the appraised value remains below the purchase price, the lender informs the buyer. The buyer can then decide whether to renegotiate the price, bring additional funds to closing, or terminate the contract.

The Tidewater process is a vital step in VA-backed home appraisals, ensuring fairness and protecting the interests of veterans. By incorporating additional information and allowing for adjustments, this process strives to establish an accurate appraised value. It also allows those who are parties to the transaction to provide valuable information that most often assisted them in making their purchase decision. Ultimately, it empowers buyers and sellers to make informed decisions based on the appraisal outcome.

For more information take a look at the VA link on their page by clicking on the following link:

https://www.benefits.com/va-loans/tidewater-initiative

Health Risks in Older Homes

When purchasing an older home, whether you intend to renovate with the plan to live in it or “flip it”, there are some risks you should familiarize yourself with before you begin.

Lead- Lead is often found in the paint, plumbing and the settled dust of an older home. Specifically, homes built prior to 1978 all carry the risk of lead based paint. If you want more information I wrote a blog article on the risks associated with this: https://www.tncresappraisals.com/blog/2022/10/14/lead-based-paint-cant-be-that-bad-or-can-it The best way to deal with lead issues is to consult with a certified lead professional before renovating.

Asbestos- Prior to 1980, asbestos was used in insulation, flooring, roof sheathing and even on textured ceilings. The EPA issued a ban on most products containing asbestos in 1989. When the asbestos fibers are damaged or disturbed, the become airborne which is when it poses the greatest hazard as you breathe these fibers into your lungs. This exposure can show up years later in the form of lung cancer and mesothelioma. When you suspect a material contains asbestos, never sand, scrape or drill holes through it. It is best to use an asbestos abatement professional to determine if something contains asbestos and for any type of repair or removal.

Mold- This can be one of the most insidious of the problems as it is a living organism that, when not treated thoroughly, can reoccur continuously. It also can hide and not appear as an issue until it is an overwhelming problem. It is most likely to occur in areas where there is plumbing or water infiltration like a roof leak or poorly sealed window frame. Those with pre-existing health issues such as allergies or lung problems can be overly sensitive to mold spores. In areas where there is more than 100 square feet of affected area, it is strongly recommended that you use a professional to remediate this issue.

While all three of these health hazards can be scary to think about, each of them are treatable with the right kind of professional. Know the risk and evaluate their impact within your decision process.

Is A Convicted Felon Inspecting Your Home?

In recent years, Fannie Mae has been working towards what they call Valuation Modernization. This process involves allowing for the gradual progression of a bifurcated valuation product to make the home valuation process more efficient and accurate. However, what Fannie Mae did not explicitly state is that they were also trying to combat the growing shortage of appraisers in the industry. The increased qualifications to become an appraiser, along with the the numbers of appraisers leaving the profession, contributed to this shortage.

The newest product Fannie Mae just rolled out is called valuation acceptance + property data. This is when someone, most likely not an appraiser, inspects the property for the lender and provides them with the property data. The lender uses this property data in conjunction with valuation models to determine if a traditional appraisal is needed. However, this is unsettling on many levels. For example, did you know that these property inspectors have no oversight or regulations as of right now? It is up to the lender to demonstrate the credibility of these property data collectors.

In contrast, licensed appraisers and their trainees who are bound by ethics, vetted and background checked by their respective states should be used for all property data collections going forward. But that most likely isn't going to happen because then lenders will have to address the entire reason why we don't provide this service - the fee. The dirty little secret in all of this is that lenders use these data collectors because it is cheap.

Here is an example of what can go wrong when using a property data collector that was not vetted. In one such case, a major Appraisal Management Company hired an individual who stated on his LinkedIn page that he was a "videographer." This same individual was convicted along with two other individuals for staging an armed robbery. It is reported that it was during this conviction that he was hired as a data collector. Is this the type of person you want in your house?

https://appraisersblogs.com/amc-hires-a-convicted-felon-as-property-data-collector

https://www.justice.gov/usao-wdmi/pr/2022_1102_Uchendu-et-al

Cases like this one (and possibly others) raise the concern that criminals, convicted or otherwise, will use property data collections as an opportunity to "case" homes for criminal activity. This creates liability for lenders, the GSEs/taxpayers, homebuyers, and others who rely on these products.

In conclusion, while Fannie Mae's Valuation Modernization process aims to make the home valuation process more efficient and accurate, the use of unlicensed property data collectors raises concerns about the security and safety of homeowners. It is essential that lenders and regulators ensure that these collectors are vetted and regulated, to avoid the possibility of criminals infiltrating the industry. Using licensed appraisers and their trainees, who are bound by ethics and vetted by their respective states, should be the preferred option for property data collections going forward.

Why Does the Appraiser Need the Sales Contract?

When it comes to appraising a property, appraisers must take into account all agreements of sale. According to Standards Rule 1-5 in the Uniform Standards of Professional Appraisal Practice (USPAP), we are required to analyze any contracts for sale. That's why it's important for the appraiser to receive a copy of the sales contract.

 By viewing the contract, the appraiser may be able to identify irregularities and comment on them. For example, if the contract includes provisions for concessions, non-real property items included in the sale, or other unusual conditions, the appraiser may need to comment on these provisions in the appraisal report to explain why there is a difference between the indicated market value of the subject property and the contract price.

 The appraiser is likely familiar with the local real estate contract forms, customary terms, and conditions of real estate transactions in the area. This familiarity enables the appraiser to better understand the specifics of the contract and identify any unusual terms that may need to be addressed in the appraisal report.

In summary, providing a copy of the sales contract to the appraiser is essential to ensure an accurate appraisal. Appraisers are required to analyze all agreements of sale. Understanding the specific provisions of the sales contract is critical to producing an appraisal report that accurately reflects the property's value. By providing the appraiser with the sales contract, homebuyers can help ensure that the appraisal report is reliable and based on accurate information.

Spring Cleaning That Can Add Value

It’s that time of year when spring cleaning gets added to your “To Do” list. Here are some tips that can help not only freshen your home but add some value. If you are looking to sell soon, these ideas will make your home more marketable.

• Declutter- A clean and organized home looks more valuable and appealing to potential buyers. Start by decluttering your home and getting rid of any items that are no longer needed.

• Deep Clean - This includes carpets, floors, walls, and windows.

• Upgrade your lighting - Updating your lighting fixtures can make a big impact on the overall look of your home. Consider replacing outdated light fixtures with modern ones and use energy-efficient LED bulbs to save money on your energy bills.

• Fix minor repairs - If I had to point out the most important simple tip for maintaining the value in your home, take the time to fix minor repairs, such as leaky faucets, loose doorknobs, defective paint surfaces and scuffs on walls. These small repairs can make a big difference in the overall appearance and functionality of your home.

• Landscaping - Landscaping can make a huge difference in the curb appeal of your home. Trim bushes, mow the lawn, and plant flowers to make your home look more attractive and well-maintained.

• Paint - We all know that fresh paint does not necessarily add value. However, painting your home can significantly improve its appearance and make it look fresher and newer. Consider painting your front door, walls, and trim in neutral colors that are attractive to most buyers.

• Upgrade your kitchen and bathroom - While this might be one of the more expensive items you would consider, upgrading your kitchen and bathroom can significantly improve the value of your home. For budget friendly ideas, consider replacing outdated fixtures and consider painting cabinets. If you have a little more money in your budget, replacing countertops and floor coverings can make a big difference in the appeal of these rooms.

By taking these steps, you can improve the value of your home without breaking the bank. These minor improvements can make a big difference in the overall appearance and appeal of your home.

Greensburg 2022 Market in Review

The year 2022 was a year of historically low inventory and high demand, unlike anything Greensburg has seen in recent history. Interest rates have been a major player in the market this year and definitely caused some of the historic gains to cool off towards the last quarter of the year. As rates rose, activity slowed- at least to a certain extent. As you look through this report, you will notice that the rise in mortgage rates corresponds to other market data events.

 The annual median home sales price for all residential properties in Greensburg rose from $149,950 in 2021 to $173,450 in 2022 which is a 15.7% increase. Compare that to the year 2020 when the median sale price was $135,000 and the increase was at 11.1%.  In looking to this coming year, it is safe to say that these increases will cool down. To what degree will depend on mortgage interest rates, inflation, demand and market saturation.

The general trend in the median sale price over the past year has been increasing with the peaks in those increases showing up during the summer months.

The supply has been historically very low in 2022. The supply appears to have had a sharp increase towards the end of the year which is counter intuitive to cyclical seasonal historical data.

The marketing times (expressed in DOM- days on market) has also been extremely low. However, in the past few months, this has been rising due to a cooling in the market most likely attributed to seasonal cyclical events during winter months and compounded by the rising mortgage rates.

As is expected, the quantity of sales decreased in the last quarter of the year.

One point of data I was surprised to see pertains to the actual number of transactions year over year for the last 3 years. The years 2020 and 2021 had a high number of transactions with 2022 showing a slight drop off. This is conversely affected by the fact that with fewer transactions, there was a higher median sale price.  

The current number of active listings is also decreasing. We will have to wait a few months to see if this starts to increase when the market typically experiences seasonal cyclical events around March or April when sellers like to place their properties on the market.

Not only as demonstrated in the previous chart which showed the number of actives decreasing, the median list price is also decreasing. This could be significant to keep in mind. As the marketing times increase and the list prices decrease, this could have a direct impact on the median sale price going forward. Only time will tell how all of this will affect 2023 sales.

Rear View Mirror or Crystal Ball?

Appraisals are a report that indicates an opinion of market value for a property. It is a reflection of what has been happening up until a certain point (our effective date) and not what is going to happen or might be continuing to happen.

What has happened could be different from what is going to happen. There is a place in real estate valuation for forecasting, but when completing appraisals for mortgage lending, divorce, estates, bankruptcy and listing work, we look at the sales and trends leading up to our effective date. Most often, our effective date is the day we look at the house, but there are times when our effective date is a retrospective look at a prior date such as a date of separation for marital dissolution purposes or date of death for estate purposes.

In any of these cases, the effective date that reflects the estimated market value is a culmination of the data analysis in the market leading up to that date. In other words, we are always looking in the rear view mirror to determine our opinion of value.

Over the past year, appraisers ran into situations where our rear view mirror was not equaling the rapidly changing markets. Houses were being listed and within less than 24 hours, sellers had multiple offers to choose from. Some of those offers included a percentage above the list price that seemed ludicrous, but buyers were desperate to get into a house and were getting discouraged by running into rejection after rejection so they were making very attractive offers. Inventory was low and this created the perfect storm. If you had cash and didn’t care about value, no problem. But if you needed a mortgage, the appraisal needed to reflect that it was worth what the buyer was willing to pay for it. In many instances, the history of sales did not make this possible. It either forced the buyer to bring the cash to the table to make up the difference or go back at the drawing board and start searching again.

Market value looks at how these actions between buyers and sellers have affected the climate in the market and use the sales that have closed as indicators of value for the property being appraised. It isn’t until you have an accumulation of data points that indicate buyers and sellers are reacting in concert that you have the ability to point to a changing market. In rapidly changing markets, it is challenging to correctly interpret the data and accurately reflect those changes. Those changes being reflected are not to be understood as an indicator that they will continue to happen, only that they have happened.

What Does An Appraiser Look For?

When either making the appointment or at the property I often hear things like “I’m sorry but I didn’t get a chance to cut my lawn” or “Please excuse the mess as we are packing and have boxes everywhere” or “We are planning on having a deck built later this year and replace the windows after that”.

What ARE we looking for when we are at your property?

You’ve just had an appraiser show up at your door for the appraisal. You now have a stranger in your house that is peering into areas of your home that any other person would need a warrant to see, who will be developing a report that in some instances can have a major impact on your objectives: the purchase of a new home, the ability to take cash out and make needed repairs, refinance to take advantage of rates to get lower monthly payments, etc. Not knowing what they are looking for can leave one feeling pretty anxious.

First, lawn maintenance and tidiness are not on our list. While it is easier to view what we need when the house is neat and tidy, it is not a priority. We are given the liberty to make assumptions that what is not visible is consistent with what is visible. If the carpet and walls appear to be in good condition, then the assumption is made that the carpet under the couch doesn’t have a horrible stain or the wall behind the large mirror does not have extensive damage. Imagine if we had to move everything out of the way so that we see 100% of every surface. A little bit of clutter doesn’t change the way we make assumptions.

To simplify the basic list of what we DO look for when we arrive at your property

size, style, quality and condition.

On the exterior we measure to determine the overall size of the structure(s). This helps us to calculate the gross living area (GLA) and other building areas such as garages, barns, sheds, etc.

Then we are looking at the style, materials and workmanship- ranch vs cape cod, attached garage vs detached garage, brick vs vinyl, metal vs composite shingle, plain design vs ornate and detailed, basic materials vs high end materials, new vs old. Each of these details are documented in order to give us a clear picture of the size, quality and condition.

On the interior, as we walk through the house, we are also determining the same things in addition to the utility or functionality of the property. Overall, how many rooms/bedrooms/bathrooms are there and what is the layout? Is it a 50 year old house with mostly original finishes, has everything been remodeled recently or something in between? Have the short lived items been replaced- hot water tank, furnace, carpeting, etc.? Is it stock grade cabinetry or is it a custom kitchen with all the bells and whistles? Are there 2 bathrooms or 4 bathrooms? All of these details matter.

In all honesty, I don’t even see the dozens of boxes that are packed and waiting for the moving truck to load and bring them to another location. I do notice the newly refinished hardwood flooring, the new furnace, the older plastic tile bathroom (yes we have plastic tile bathrooms in our area- once popular in the 50’s and 60’s), the lack of GFCI outlets near water sources, the settlement cracks in the basement, etc.

For those improvements you are planning to make, unless we are doing an appraisal that is “subject to” these things being completed in the future, what you are planning to do will have no impact on the value. Conversely, the renovations you have made over the years also have little impact in light of what it used to be. We base our analysis on what exists now. It is good for us to know and have a list of those improvements so that our information is accurate. However, if you had carpet when you purchased the property 15 years ago and have since replaced it with hardwood flooring and ceramic tile, what matters is that you currently have the hardwood flooring and ceramic tile.

The next time you are having an appraisal completed on your home, having the regular maintenance of your yard completed and the housekeeping tidy is helpful so that we can see as much of the property in its best light as possible. However, this has little impact on the size, quality and condition of the components that exist the day we are at your property collecting all this data. The existing salient features, their quality and condition are what we are looking for.

When Should I Get An Appraisal

Most people know that appraisals need to be completed for lending purposes. But did you know there are a number of other reasons you should be contracting an appraiser to perform a professional valuation on your property?

 1. When you are the seller of a FSBO (For Sale By Owner). My experience in completing appraisals for properties that have been sold without the professional expertise of a real estate professional is that the selling price is often lower than the value. Many people think that they are saving the expense of paying a commission to a broker and therefore have some wiggle room in deciding on a sale price. Based on my research of keeping the data on these types of transactions, at least 75% - 80% of the time, the seller would have had a higher net income even if they were to have paid the commission. If you plan on selling your home, you have two options- either contract a real estate agent to properly help you price and market the home or get an appraisal so that you can maximize your income from the sale.

 2. When you are a cash buyer you definitely want to get an appraisal. In cases where a buyer is using financing, there is a built in fail safe because the lender is going to require an appraisal. If the appraisal determines that the value of the property is less than the agreed upon purchase price, this will impact the loan and often allow the parties to renegotiate in order to make the transaction work. If you are paying cash, you should choose an appraisal contingency that allows you the option to have an appraisal completed. This way you can be assured that what you are choosing to pay is based on the information about what the property is worth. In todays crazy market, many people are choosing to pay more just to get into a house, but with an appraisal it would be a willing choice based on being informed. If you would prefer to not pay more than the property is worth, then an appraisal contingency will allow you to either renegotiate or back out without penalty.

 3. When you are the executor or executrix for an estate. Estate appraisals are necessary to be able to pay the appropriate level of estate taxes. Many times the probate attorney will need an appraisal in order to properly calculate the estate taxes. This information can also be helpful in determining if a family member is willing and able to purchase the property or if it is best to sell it on the open market.

4. Divorce litigation- Divorces are never easy and when there is shared real estate involved, typically an appraisal will be ordered by both parties as part of the overall process. These appraisals should not be considerably different as it should not matter which side the valuation is being performed for. In some cases, if there is a significant difference in the values, the court will order a third or make a ruling based on the testimony of the appraisers for the reports already completed. This value becomes important if you have ever heard the term “buy out”. The party that desires to stay in the home has to buy out the party that is no longer going to be in the home.

 5. Consulting services are what you need if you are looking to remodel, subdivide or construct an new addition. If you are looking to make major renovations, subdivide a large parcel of property into smaller multiple parcels or construct an addition to your home, it is strongly advised to consult a real estate appraiser to help you in determining how to maximize the value versus the cost. Too often I’ve encountered many well intended owners who spend tens of thousands of dollars to make major renovations to their home or property without realizing that the return on their investment is minimal and no where near the investment they made. In the end, they are saddled with a large amount of debt and little return to show for it. A few firsthand examples I have seen is the $75,000 spent for a custom in ground pool, the $3,000,000+ custom home in an area that has median sale prices around $200,000 or the $100,000 renovation to a 150 year old barn with minimal contributory value. Consulting services can help you determine the best renovations to make resulting in the highest market value or it can help give you an insight into the highest potential for a subdivision or addition.

 There are other possible reasons for needing an appraisals, such as tax appeals, bankruptcy or eminent domain, but these are some of the more common ones. In the near future, I’d like to expound on these in even more detail. In the meantime, if you need an appraisal for any purpose, please trust the Gold Level Real Estate Appraisal Office from the Best of Westmoreland County 2022 contest. We would be more than happy to help you with all of your real estate valuation needs.

Another Electric Recall

Did you see the latest electrical recall headline? Schneider Electric™ Recalls 1.4 Million Electrical Panels Due to Thermal Burn and Fire Hazards

That is a lot of electrical panels. The long standing recall for unsafe panels dealt with Federal Pacific Stab-lok Breakers. Now the new recall involves “Square D” breakers and panels manufactured by Schneider Electric.

The hazard is described as: The load center can overheat, posing thermal burn and fire hazards. Specifically:

The issue detected is a loose neutral screw connection within the QO Plug-On Neutral Load Center.

The recall affects Square D QO Plug-on neutral load centers, commonly called breaker boxes or electrical panels, that might have been installed in homes, recreational vehicles, or commercial structures such as restaurants, manufacturing facilities, warehouses, commercial lighting, and others.

The affected products were manufactured between February 2020 and January 2022, with date codes between 200561 and 220233. Circuit breaker boxes and covers manufactured between December 2019 and March 2022 are also included in the recall.

The recall notice provides advice on how to read the date codes:

For installed outdoor load centers, the manufacturing date codes are printed on the inside of the cover or door of the unit or on the box itself when the cover or door is open.

For installed indoor load centers, a qualified electrician can locate the interior date codes that are not visible to the home owner.

If you think you have one of these panels installed in your home, call a certified electrician to not only determine if you have one of these panels, but can replace any needed faulty components with ones that do not pose a hazard to your home.

For more information click on the link below:

https://www.cpsc.gov/Recalls/2022/Schneider-ElectricTM-Recalls-1-4-Million-Electrical-Panels-Due-to-Thermal-Burn-and-Fire-Hazards

Let The Nurse Take Your Temperature

How many of you go to the doctors office and refuse to allow the nurse to take your temperature or blood pressure? In reality, you are ultimately there to see the doctor. To allow someone who is not the doctor to take your temperature, blood pressure, weight, list of symptoms and medications is not what you paid for, right? You pay for the doctor and you are going to insist that the doctor do everything that needs to be done including everything that the nurse typically does. Let’s face it. The nurse doesn’t have their level of expertise or education, so why would you have someone who is not the doctor do anything for you while in their office? When you think about this scenario, it does sound a little absurd. Most of us don’t even think about it let alone question it.

 Doctors are not the only example. Most professions have multiple levels of expertise that ultimately assist the highest level within the organization. Lawyers have paralegal personnel. Plumbers have apprentices. Professors have graduate students. Coaches have assistant coaches. Presidents have Vice Presidents. Real estate brokers have real estate sales persons.

Well, in our profession, APPRAISERS HAVE TRAINEES.

Real estate appraiser requirements have significantly advanced over the past few decades with increasing educational requirements and a few revisions to the experience process. However, one thing remains the same- you have to be a “trainee” under the supervision of a qualified certified appraiser for a period of time before you are able to fulfill the requirements to become independently certified. I put the word in quotes because, honestly, I don’t like the word. The word “trainee” seems very unprofessional as a term and would be best served to be replaced with the word Intern, Assistant or Apprentice. In essence, when you compare the requirements and process to other professions, that is exactly what they are. They are no less of a professional and are fulfilling the necessary requirements to be fully recognized as a qualified professional.

To find out more about the requirements for the state of Pennsylvania, click here:

PA Real Estate Appraiser Requirements

 In the past, I have trained multiple Appraiser Trainees who are successful independent Certified Appraisers today. Over the years, I have encountered a lack of confidence by clients and/or other parties to a transaction when a trainee is involved, especially when it comes to the portion of the process that is the observations of the actual real estate. It is possible that this is most attributed to the fact that this is the part of the process that is most in view of the general public. At the end of every on site appointment, I tell the person I meet at the property that this is the easiest and least time consuming part of the appraisal process. The portion of the process that no one sees, is the market data analyzing, the report writing and the overall analysis of the property in relation to value. This is the part that takes the longest amount of time, the most experience and the most amount of training.

 Most states have very defined laws as to whether or not a trainee can be at a property without their supervisor. In Pennsylvania, after a trainee has accumulated a minimum of 300 field hours and the supervisor deems them to be competent to complete the inspection independently, they do not need the supervisor on site. Even when the trainee views a property without the supervisor, this does not mean that the appraisal was completed in its entirety by the trainee. At the very least, the supervisor needs to review and attest to the final report even if they were mostly not involved. Typically, the supervisory appraiser has been involved in the comparable selection, the analysis and the final estimate of market value.

 So if you find yourself having an appraisal performed by my office and, as the supervisory appraiser, deems it legal and appropriate to only send the trainee to collect the real property data, just like the nurse in the doctors office, you can be assured the trainee is competent to collect the property data alone and the final report has been thoroughly reviewed, approved and signed by myself.

Stay tuned for next weeks post where I introduce our newest member of the team, Christopher Ronallo, PA Licensed Appraiser Trainee.

Observe or Inspect?

Inspection: careful examination or scrutiny

Observation: the action or process of observing something carefully in order to gain information

While the definitions are close, inspection seems to indicate a more detailed way of looking at something just by the words “examination” and ”scrutiny”.

There seems to be some confusion as to the role of the appraiser when performing an “inspection”. The process of going to the house to view a property is often termed inspection by many, including the appraiser. This can be confusing to the general public, and no matter what it is called, is not equivalent to that of an inspection performed by a home inspector. For this reason, I have recently changed the way I describe the process of collecting pertinent information about the property I’m appraising as an observation. When HUD updated its handbook for FHA insured loans, under the responsibilities of the appraiser they even stopped using the word inspection and replaced it with observe or observation.

An inspection performed by a licensed home inspector requires a higher level of scrutiny that is not within the scope of work for appraisal purposes. A quality home inspection can reveal critical information about the condition of a home and its systems. This makes the buyer aware of what costs, repairs and maintenance the home may require immediately, and over time. A home inspection in no way ever addresses how these conditions relate to value. In fact, the licensing laws and regulations for home inspectors do not permit them to develop opinions of property value.

As appraisers, when on site at the property, we observe the pertinent salient features of a property in order to determine size, functionality, quality and condition for the sole purpose of analyzing how these items affect the marketability and contributory value. It is clearly stated in most appraisal reports that while we make certain determinations as to the quality and condition of the house and its individual systems or components, we are not inspectors and do not warrant or guarantee these items.

Regardless of what it is called, the role of the home inspector and the appraiser is very different. A home inspector will evaluate the home to determine the condition for the purpose of informing the client about critical information pertaining to the home and its systems. An appraiser will observe the relevant characteristics of a property in order to relate it to value.

Do you know the size of your home?

Fannie Mae started requiring appraisers starting on April 1, 2022 to measure all single family homes and condominiums using the ANSI Z765-2021 standards. According to FNME, this policy was instituted in order to standardize the method used to measure, calculate and report the GLA (gross living area) and non-GLA areas within the appraisal. It should be noted that this standard only applies to those homes being appraised for loans being underwritten by FNME and only for those properties that are considered single family or condominiums. Other forms of property types and appraisals for private purposes, in house lending and those insured by FHA, USDA and VA have not yet adopted these standards.

In order to create less confusion and advertise the correct square footage, prior to listing your home, have an expert measure your home. There has never been a greater need for accurate reporting of the gross living area than today. Many other market areas in other locations around the country tend to sell properties and make offers based on the price per square foot. Unfortunately, we live in an area where most owners and agents don’t know the size of a home. This should soon be changing as measuring standards apply to all locations.

While appraisers are now required to use these standards, there are other real estate sectors in which there is no reporting standard. This includes real estate agents, county assessors, MLS systems, online public records and other sites that are often relied upon by the public for a resource of property information such as Zillow. In fact, our local MLS system doesn’t even require the GLA field to be filled by the agent. When they do opt to include a number for GLA, they can site 3 different sources for obtaining that GLA and these sources do not have to be verified for accuracy.

Since these standards have been instituted, there is going to be a period of time needed for adjustment. Why? Because when you look at your appraisal, you will find that the GLA reported might be considerably different from what you thought, from what you were told by your agent, from the assessment records or even possibly prior appraisals performed on that same property prior to the standard. Many times the assessment record is wrong and most real estate agents in our area have not been instructed on how to accurately measure a home for the purpose of calculating the GLA.

We have trained professionals here in the office that would be able to assist you so that you can accurately advertise the size of your home.  We offer two services, Basic Home Measurements and Detailed Floor Plans, that will allow you to know the accurate gross living area of your home which could help sell your home.

Once you have these tools in hand, it will give you the edge to help expedite the sale of your home and give your potential buyers an accurate measurement and/or floor plan of your home.

Experience Matters

When making a decision to contract just about anyone to perform a service, one of the most important qualifiers for most is the experience one brings to the table. You really don’t want someone building your deck who has never built one before or replacing your transmission if they have never worked on cars. It works the same with performing real estate appraisals.

I’ve gone back through my files and found that since starting my business in 2009, I have performed over 6,200 valuations for all kinds of clients: lenders, lawyers, accountants, home owners, estates, real estate agents, etc. Add to that the reports I completed during my training process and then as a certified appraiser in a different office for over 8 years.

So if you need an appraisal performed on a piece of residential real estate, what should you look for that will help you to know that the appraiser has the experience necessary to produce a credible assignment result giving you a valuation that is something that can be deemed reliable?

1. How long have they been appraising?

While it is true that newly certified appraisers do have experience performing appraisals because the profession still is constructed as an apprenticeship program, it takes a good 3 - 5 years to feel fully confident in your ability to perform appraisals on all types of properties. The more unique the property, the more experience necessary to produce a credible report.

2. How many assignments have they performed in your market area?

Time appraising is one factor. Experience in your market is a whole different ball game. I have been performing appraisals in the southwest Pennsylvania areas of Westmoreland, Armstrong, Indiana, Butler, Allegheny and Cambria Counties for years. However, I have never performed an appraisal in Greene County. My experience as an appraiser in some areas does not make me an expert in others.

3. Does the appraiser have experience appraising the type of property you need appraised?

Standard “cookie cutter” properties are those properties that are homogenous to the market area. Think about an established residential plan that has over 200 homes in which there is a steady sales activity. These are typically easy to appraise and does not take a significant amount of additional research or analysis. What about a home that was built on a slab in an area where 99% of the homes have a basement? Or a condo in a plan that is the only condominium plan in the entire county and you are lucky if one sells per year such as in Armstrong County? How about a 1 bedroom home where less than 2% of the homes in the county are 1 bedroom homes? These more unique properties take additional effort, time and expertise to be able to know how to extract what factors have the highest marketable indicators and contributory value in the market. Additionally, the report writing takes longer in order to make sure that your intended user understands the analysis and conclusions contained in your report.

When you are in need of a residential real estate appraisal, it is important to know that you can confidently rely on the conclusions. It doesn’t mean you will always agree with the value, but if you choose wisely, you can be sure to rely on the report as a good representation of that properties estimated market value. At Town & Country Residential Appraisals, we can give you that type of confidence for all types of residential properties in the counties we cover. We have the experience that matters!

Murrysville 2022 Quarter 1

It was bound to happen. The signs are pointing to a cooling off from the height of increases we experienced in 2021. While there is still a short supply, this supply is starting to increase. As of this writing on May 23, 2022 there were 84 sales in Murrysville since the first of the year and currently there are 24 active listings, 43 properties with contingent contracts and 17 properties under contract.

2022 Quarter 1 Sales

According to the data, the first quarter of sales in 2022 for Murrysville has shown a decrease in the predominant sale prices of 2.5% per month based on simple regression. This is different from the first quarter of 2021 which was experiencing an increase of 5.6% per month.

2021 Quarter 1 Sales

I don’t have the ability to forecast what will happen in the future and we are entering the cyclical time of year when sales typically are at their strongest. However, the start of this year is possibly showing that prices are starting to correct from the highs and increases posted by 2021 and the balance is starting to tip in favor of more of a balance.