“Don’t shoot the messenger,” is the message the Appraisal Institute has for those in the real estate industry. Appraisers have been taking heat the last few months over low home values, with critics arguing that values aren’t matching a home listing or contract’s price and valuations are unfairly weighing distressed properties into the equation.”

 [Daily Real Estate News | Friday, January 20, 2012]

It’s the same story we have heard for years.  Someone has to be the bad guy because their house sale didn’t go through at the bank.  The realtor did the best job that could be done in getting the buyer and seller together.  The “right price” was made and the contract was signed. Somehow all the parties to the transaction think the contract price is the “right price” and everyone is satisfied - until the bank rejects the loan.  

What went wrong?  We have to remember that appraisals are not made to satisfy and uphold the contract price. The finger pointing will always find an easy target and naturally aims at the appraiser because the appraisal is where the market value of the property has its roots.  The appraiser is an unbiased third party who simply is reporting what is reflected in the market. The lower appraised value in a down market suddenly brings an end to the aura of happiness for everyone involved in the transaction. 

So what happened?  Is the appraiser really the bad person here?  Sometimes we forget that the appraiser is governed by stringent laws and regulations mandating how an appraiser must operate and how the appraisal must arrive at fair market value.  The regulations are in place for the appraiser by USPAP [Uniform Standards of Professional Appraisal Practice] and to bend the regulations is against the law. 

“Appraisers don’t set the real estate market; they reflect what’s happening in the market,” Sara W. Stephens, the Appraisal Institute’s president, said recently. “Obviously, the market is depressed — home prices have fallen far below the values of a few years ago. Many homes simply aren’t worth what their owners think they are.”

 [Daily Real Estate News | Friday, January 20, 2012]

It’s not an easy job to find market value for property in today’s volatile economic environment.  If you need assistance in determining the market value of your property please call Phil Erwin at 417-438-9954 or email perwin@tristate-engineering.com.  It’s always good to know the right price of the property before you decide to buy or sell. 

Some time-less negotiation rules that bring success in every stituation. 

1. Ask questions. It is important  to find out the other person’s needs and wants and this sets the stage for good negotiations. 

2. Don’t stop with the questions.  Keep asking questions to check up or validate the previous answers.  It’s important to fine tune.   

3. Be a good listener and provide feedback.  It is important to understand what you are being told. Watch for the non-verbal signs as well as the verbal cues. 

4. Appreciate what the other person is saying and mini-summarize what the speaker has said in order to obtain a good understanding of the message.

5.  Smile while you are speaking and listening.  It means a lot to the other person if you are enjoying the conversation. 

6.  Remember to say your message, say what you just said, and say it again.   Repeat, repeat it differently, and repeat it again. 

Negotiation is far more than simply sitting at the table and exchanging proposals. It is the process of learning enough about the other person to be able to engage the person in a dialogue that makes that person want or need to work with you.

Remember, negotiating is persuading someone else to do what you want them to do.

 I feel better today knowing that I am an appraiser and not a whetherman.  That’s not a misspelling of weatherman.  My definition of a whetherman is someone who predicts the “whether” and is oblivious to facts.  Internet appraisals fall into this category because there is no basis of factual data in forming an opinion of value.   An example of this is that I am well acquainted with a property for sale in the city of Joplin and have made an appraisal and determined the appraised value based on the sales comparison approach.  Being a certified residential real estate appraiser and licensed in Missouri, Oklahoma, and Kansas I am governed by laws and regulations for making an appraisal. Appraisal work is serious business and one that I do not take lightly and consider a very important component in the real estate world.   An appraisal report is considered a snapshot of a property's value at a given date in time. The sales comparison approach or market value approach is the most widely accepted method of determining how much comparable homes with similar features have actually sold for. Therefore, the appraised value of a particular property is often determined by the sales activity of the comparable homes in the immediate area.   Personally I want to walk through the property during an inspection and obtain as much data as possible and photograph everything.  A picture is worth a thousand words.  Sketches of the room size and arrangement is mandatory.  Some appraiser’s rely on the County records but I always want to do my own work and then check back with the records and look for discrepancies (if any).   A good appraiser is observing interior/exterior features in detail during the inspection and taking notes on special outstanding features of the property.  I like for the property owner to be present to point out certain things – the owner is the expert and knows the age of the improvements and most owner’s will inform me of certain repairs that are needed along with my own observation.   Think for a minute.  Do you want an internet appraisal company located in another state where you simply log in your address and receive a free estimate of your property value based on inaccurate information or do you want a personal visit from a local qualified appraiser who knows the neighborhood and the current market activity. Call me for an accurate appraisal of your property and you won't get "whethered" by the estimators.

LOTS FOR SALE! The market for lot sales is booming. There are still more lots for sale but sellers are getting smarter and they want the best price for their lot. On the average a 70 ft. x 125 ft. lot (8,750 SF) is bringing approximately $13,000 or $1.49/SF. I have seen other lots of similar size selling for $1.20/SF to $1.32/SF. Lot prices vary due to location. For example there are some lots that are corner locations; some have better proximity to highways or commercial areas/ schools/ hospitals, etc. Location is a big factor in the price of the lot. Other factors such as terrain, shape of the lot, and the appearance of the neighborhood play an important part in the price. Overall, since the first of September I have seen lot prices stabilize to a higher level per square foot than what lots were selling in June and July. If you have any questions about a particular lot or if you need my appraisal consulting services please do not hesitate to email me at perwin@tristate-engineering.com or a quick phone call at 417-438-9954. You deserve the best after what you have been through.

At Tri-State Engineering the acquisition of real property and property rights is an extremely sensitive area of activities. It involves direct personal contacts with the public. When property is needed for right of way and land or property rights are required it is necessary that negotiators should make a reasonable effort to personally contact each property owner or the owner's designated representative. Negotiators should strive to attain rapport with the property owner, inspire confidence in the acquisition process and the fairness of the offer being made. The property owner should be provided with an explanation of the acquisition process which may be supplemented by an acquisition brochure. A full explanation of the project should be given and how it will affect the owner's property. If a personal contact cannot be accomplished a phone call is necessary with a follow up letter sent by certified mail. The owner should be given a reasonable time to consider any offer or donation of land and each owner should be provided with an opportunity to provide information concerning property values or suggest modifications in the proposed terms and conditions if a purchase is involved. At Tri-State Engineering our negotiator's considers the owner's counter-offers and suggestions, even though there is no obligation to accept the same. Occasionally, additional information may dictate a need for a revision to the offer. Any revision is documented providing an explanation of the reasons and if approved by the acquiring agency a revised offer is made promptly to the property owner. Successful negotiations is a result of good commuication skills which include listening to all parties involved and arriving at a solution agreeable to all. At Tri-State Engineering successful negotiations is always our goal. Call Phil Erwin at 417-438-9954 or email perwin@tristate-engineering.com when you are ready to begin successful negotiations.

The catastrophic tornado striking the heart of Joplin on Sunday evening May 22 ripped improvements from their foundations resulting in a debris filled skyline forever etched in our memory. God, time, and hard work will help rebuild and restore most of the improvements in Joplin what 35 minutes took away on a black day in history. Lost lives, broken hearts, spirits, and families have taken a toll on the city that only God and time can mend. But we will mend and we will be better. Adversity always tests our endurance and faith. And our combined spirits and faith will prove that we are bigger and stronger than a tornado.

All of us have seen the tornado damaged lots and we realize that the foundations and utilities are still available for rebuilding. The vacant lots still hold value. Sure the trees are uprooted and damaged requiring removal but dirt is dirt and does not lose value. Vacant lots in the tornado's path should not be sold at a discounted price. If you find yourself faced with the prospect of selling your lot and you are unsure of what price to place on the lot please contact me at perwin@tristate-engineering.com or phone me at 417-438-9954. I will provide you with some sales that have recently occurred. This will give you some idea on how to price your vacant lot. You deserve to get the best price for your vacant lot.

The May 22nd tornado left a devastation on Joplin of such magnitude that humbles all of us. We are constantly reminded of our limited lives on this earth and the swiftness of the non-respective force of nature. Today the debris removal of the "left-overs" is approximately 80% completed and the path of the deadly tornado is becoming more leveled everyday. Wrecked houses and improvements saved and re-buildable are minimal in number and the tree-less landscape is being burned by the 100+ temperatures now furnaced by the seething sun.

Vacant land pervades the streets once housing single-family residences and home-owners now relocated to available housing are selling off their vacant lots to cash buyers. Within days after the clean-up work began in Joplin word was spreading that vacant lots would be available and those struck by tragedy would be selling off their housing remainder. At first glance one would think that this was the only choice. It's seems useless to retain a vacant lot if the homeowner has already relocated to another location.

But I look at things from an appraisal point of view. Dirt is dirt and whether it has suffered the removal of the improvement it is still worth something. Think about it - the vacant lot was worth something before it was built on and it still has value. What's more impressive is that the underground utilities are still on the property and most likely there remains a foundation in place that is buildable.

So what's a tornado damage lot worth on today's market? Surely not the $2,000 to $3,500 that I have heard is being paid. I believe there is some damage sustained but not to the extent of giving away the lot. I have some comparable sales that show tornado damaged lots are selling for $0.84 to $1.19 per square foot since June 30th. Homeowners if you are reading this blog, please call me at 417-438-9954 or email at perwin@tristate-engineering.com and I will help get the best value of your vacant residential lot. Please don't sell your lot too cheap just because you don't know the facts.

In order to survive and thrive in this difficult economy there will be a reinventing of careers. Doing business the same old way is a thing of the past and the impressive innovators will be those who distinguish themselves in competition by getting results in amazingly new ways. "Ask yourself every day 'can I connect with my clients in new and better ways?' The business world demands new and exciting ways to produce results. Technology is speeding forward with communication tools that charge us to have a sense of adventure and invention. Negotiation is continually changing and has elevated communicators to new methods of generating business. Social networking is becoming the common work environment where texting with photos is the norm. What has not changed are the dry logs of honesty, loyalty, trust, courtesy, friendliness that negotiators always have on hand and the ability to strike the match of innovation to build a fire in the rain.

Negotiations for the acquisition of right of way which includes land purchases and easement acquisition is propelled by a valid need and the preparation of design plans depicting the surveyed solution. Effective negotiations is planned negotiations. You need a vision of the finished product. In other words, what is the easement and the remaining property going to look like when the dust settles? For example you are provided with a planned design of a sewer easement showing dimensions (length and width) you will want to know the effects of the sewer easement placement on the property. What is the proximity to existing improvements? What type of improvments are affected? - a barn? - a dwelling? - a parking lot? How is access to the property going to be affected during and after construction? What existing easements are in place on the property and their location in relation to the proposed sewer easement? The easement may look good on paper but in reality construction is going to be messy and ugly in the eyes of the property owner. A drive-by visit to the proposed site is necessary in order to view the effects of the proposed easement. Compare the design plans in the field with your visual observation. Put yourself in the owner's position and note the potiential problems that you see. Will the easement limit the potential use of the property or is the easement distanced enough to pose little effect on the owner's use. The "distance" will many times be an issue because of perception. These questions, and others, will be the basis for getting started in preparation for the negotiations.