Los Feliz Ledger [ real estate ]
Appraisals are Hurting our Market By Richard Stanley, Ledger Columnist Since May, Fannie Mae and Freddie Mac, the nation’s leading purchasers of home mortgages, have initiated new loan underwriting guidelines that require lenders to choose appraisers randomly from a pool. Gone are the days of lenders’ relying upon a trusted cadre of “in-house” or “approved” appraisers. On its face, the idea seems sound: that appraisers drawn from a pool are less likely to be untowardly influenced and to over-value a property. Prior to the last downturn, in the early 1990s, some appraisers deliberately inflated their appraisals, thus allowing borrowers to convert phantom eq-
uity to cash. When the market deflated, lenders were left with more defaults and bigger losses. Since that era, appraisers are licensed and are less likely to lead lenders into fraudulent loans, knowing that their licenses and livelihoods are on the line. It’s worth noting that the current problems did not arise due to appraisal issues. Loose underwriting criteria and highrisk loan products are to blame. Nevertheless, thanks to Fannie Mae and Freddie Mac, a borrower today must get a loan appraisal from a pool appraiser who may or may not be familiar with the local real estate market—especially its inventory and the premiums paid for trophy properties. The appraiser
assigned to a Los Feliz property may do many more appraisals in a market such as the High Desert, where housing is more homogeneous and values are severely depreciated. Such appraisals may produce a lowerthan-market-value figure. Further, appraisers are now disallowing value for non-permitted additions and upgrades. Thus, that extra bathroom that was put in years ago on the QT will not contribute to the value of your house. Your property will be compared to other properties that have the same number of officially-noted bedrooms or bathrooms. If you can’t find a city permit for bedrooms, bathrooms or living square
Fine Rug Cleaning & Care Since 1920
SUMMER CLEANING SPECIAL 20% DISCOUNT
Our hand-controlled process, assures full restoration & sheen
"Voted best rug cleaning by LA MAGAZINE"
Slow Drying – All rugs dried in dust free, temp. controlled environment.
Repairs – Our team of experts will be happy to repair your rug to its original condition.
"Environmentally safe rug cleaning. Allergen and bacteria free rugs in your home" For all your rug needs… call the best
footage above what’s quoted on the assessor’s record, you will probably have a hard time convincing an appraiser that you should get value for them. One problem facing property owners now is that the county maintains the assessor’s records, which most appraisers rely upon, and the city maintains the building permit records, from which the assessor’s records are derived. The two governmental entities do not always communicate well with each other to keep public records accurate and current. Discrepancies abound. For example, one appraiser measured a recent sale of mine at 2,800 square feet. Another measured the house at 3,200 square feet. The seller, who had architectural training, measured his own house at 3,000 square feet. The assessor’s records reported the house to be 3,500 square feet. Whose figure was to be believed? Naturally, the lender chose to believe the lowest figure, the seller dropped the price and, fortunately, the buyer was able to add more cash to close the deal—but the market was depressed further. What Fannie Mae and Freddie Mac have done to neighborhoods such as ours is to artificially depress the market values of our properties by using overly-strict appraisal criteria implemented by incompetent appraisers. My tips: always get a permit—especially for additions— and get it “signed off” by the city. Check your property’s public record information, including permits, for accuracy and to be sure they jibe. Try to resolve discrepancies now, before you sell or refinance. Richard Stanley is a realtor with Coldwell Banker/Los Feliz. rstanley@coldwellbanker. com or at (323) 906-2417.
[ SELECT HOME SALES JULY 2009 ] Be sure to check www.losfelizledger. com/homesales.htm for the full list of real estate sales.
90026 Single Family Homes 3405 1012 2126 1626 1506 1637 1400
N DILLON ST . . . . . . . . . . . . $839,000 WESTERLY TER. . . . . . . . . . . 750,000 CHAMPLAIN TER. . . . . . . . . 605,000 RESERVOIR ST . . . . . . . . . . . 561,000 CORONADO TER. . . . . . . . . 499,000 WATERLOO ST. . . . . . . . . . . . 425,000 PLATA ST . . . . . . . . . . . . . . . . . 333,000
90027 Condominimums 4711 AMBROSE AVE 306. . . . . . $560,000 1971 RODNEY DR 205 . . . . . . . . . 460,000
90027 Single Family Homes 3556 5224 3835 4222 2054 3827
LOWRY RD. . . . . . . . . . . . $2,150,000 LOS GRANDES WAY. . . . 1,745,000 CLAYTON AVE. . . . . . . . . . 1,030,000 LOS NIETOS DR . . . . . . . . . . 960,000 N NEW HAMPSHIRE AVE. 850,000 FERNWOOD AVE. . . . . . . . . 595,000
90039 Condominimum 2849 AVENEL ST . . . . . . . . . . . . . . $685,000
90039 Single Family Home 2674 2085 2849 2958
IVAN HILL TER. . . . . . . . . . . $924,000 BALMER DR. . . . . . . . . . . . . . 879,000 AVENEL ST . . . . . . . . . . . . . . . 685,000 WAVERLY DR. . . . . . . . . . . . . 650,000
Sales are from the previous month. Source: Great American Real Estate Solutions
Local Sothebys Agent In Top Tier HOLLYWOOD—Russell Filice, with Sothebys International Realty’s Sunset Boulevard office—has been named as one of the country’s top overall 400 real estate professionals for 2008. Filice was listed at 54 in the ranking of “Top 100 Agents by Sales Volume.” The annual ranking is sponsored by the Wall Street Journal, REAL Trends and Lore magazines. “We are very proud of Russell Filice for his outstanding work, particularly during one of the most challenging real estate markets in history,” said Frank Symons, Executive Vice President and Chief Operating Officer of Sotheby’s International Realty’s Western Region.
3000 Riverside Dr. LA, CA 90039
Thomas Rug Cleaning Co. and ARARAT Oriental Rugs
800-259-9929 323-660-7388 www.thomasrugcleaning.com
Gail Crosby
Who Helps You Move Has Moved to... Sotheby’s International Realty 1801 Hillhurst Avenue (323) 428-2864 GailCrosby@aol.com
Page 12 Su Casa REAL ESTATE
www.losfelizledger.com
GailCrosby_Jul09.indd 1
July 2009 6/25/09 6:18:55 PM