thanks you admin super

I do agree that more thought could have been put into the appraisal form, but bear in mind that you're looking at the 2-4 unit form, where because there are more than one unit in the property, there are major space constraints. If you looked at the 1-unit form, you would see lines for View, Energy Efficient Items, Functional Utility (that means layout, basically) and Location. A bigger problem is that none of the forms ask a lot of questions about, for example, the kitchen, which is a huge component of value.

There is a project underway to standardize this info (google "fhfa appraisal data standardization") in order to double-check appraisers' judgment, so hopefully this will get better over the next five years.

Buyers factor is all the things listed in these comments (cul de sac vs. busy street, efficient furnace/AC vs. energy hog appliances. If there are 2 homes in the same neighborhood, identical sq. ft., similar lot size, similar listing price, etc., but one is in a better location (cul de sac, southern exposure, better applaices, roof, etc.) then it will likely get more showings, more interest, and a higher sale price. Most home buyers can tell when one home is better than the other, given a similar listing price. The final appraisal for the bank is a moot issue as long as the agreed price is in line with comps.

we've all listened to real estate "experts" too long so all houses are the lowest common denominator. They are all beige and boring because we're all afraid to do anything that might affect market value. Not to mention that developers only build 3 standard plans. My family (military so we moved a lot) has always just done what we thought we would like to have in our homes - putting in large trees, practical flooring instead of carpeting, top of the line appliances, etc. and have had no trouble selling homes. I think they had an appeal because they were a bit different and adapted to real living requirements. So now I am in my 60s and I want a house with minimum rooms, lots of glass, and a few other features but there is nothing available unless I'm willing to build a long way out from civilization. It's hard for me to accept the fact that realtors have created the only viable living situation.

We have a similar system in Britain, and it is completely valueless - the appraiser invariably just signs off whatever the buyer has agreed to buy the house for and charges a few hundred pounds for this "service". Last time I bought a house there turned out at the last minute to be a discrepancy between the price I'd agreed with the agent and the assessment, but none of the professionals involved in the sale process worried the sale would be held up because they were certain it could only be a typo - none of them suspected for a second that this allegedly independent appraisal could really have varied from the price I happened to have agreed with the seller, and when we checked it was indeed a typo and the sale went through.

You underestimate the stupidity of people. People end up paying the same price for an energy efficient home versus one that has terrible energy efficiency because they don't think. Because of that the appraised value of those two homes ARE the same.

I like your idea of educating people to start to think about those things. Another thing to think about is how much traffic goes past your home each day. Someone who lives in a Cul-de-sac is better off than someone who lives at the entrance to the housing community.

The true value of a home, or any commodity, is directly proportional to the perception of the buyer. All that other stuff doesn't really matter, except to the seller.

Carter said, "This doesn't needed to be included in the value of the home because it's included in the total cost of homeownership. To put it another way, the Prius doesn't need to be cheaper than its competitors because it's more fuel-efficient so people still buy it. When looking at affording a home, you should be looking at your total monthly payments, including mortgage and energy bills. If one is poorly designed and uses more energy, that will impact its affordability and sale potentials."

Your logic is wrong. If two houses are exactly equal, except house A is more energy efficient that house B, then house A is worth more now because of the long term savings. Energy efficiency should definitely factor into the current value of a home.

>I'm fascinated by what is NOT considered when looking at a home's value - View, Energy efficiency, Maintenance needs, Fire risk, Beauty, Flow of space, Livability, Sun orientation, Kitchen layout

I'm guessing you consider your home exceptional in all these aspects and feel slighted because your home value doesn't reflect it. But since a lower assessment means lower taxes - SHUT UP AND BE HAPPY BEFORE YOU GET AUDITED!

That new search is fantasitc, thanks for implenmenting it; so many times I've thought of the perfect dilbert strip for a situation but have never been able to find it.

Finding something like this in one easy search is so good!

http://dilbert.com/dyn/str_strip/000000000/00000000/0000000/000000/10000/5000/100/15100/15100.strip.gif

Was your appraisal really that bad on the new home?

- Energy efficiency

This doesn't needed to be included in the value of the home because it's included in the total cost of homeownership. To put it another way, the Prius doesn't need to be cheaper than its competitors because it's more fuel-efficient so people still buy it. When looking at affording a home, you should be looking at your total monthly payments, including mortgage and energy bills. If one is poorly designed and uses more energy, that will impact its affordability and sale potentials.

- Maintenance needs

Again, see above.

- Beauty

Others will say this is subjective. I disagree. As an architectural historian, most homes built today are badly out of proportion and use obnoxious fenestration (placement of windows), especially Palladian windows. You are completely right.

- Flow of space

How do you measure this? I really like traditional houses with individual rooms, but many people like the more modern Wrightian-style homes, like ranches, where rooms flow into each other. Is one of these opinions right? My preference is more energy efficient, but otherwise, it's just preference.

- Livability

Meaning what exactly?

- Sun orientation

I do get so tired of homes that are designed for mass production and so they have no sense of orientation to the sun, but, again, it sort of depends on what you want from a home. I like to sleep late, and having a window in my bedroom facing the east is horrible to me. Other people like getting up with the sun.

It's true that many of the things that people do to "improve" the value of their homes are seen as hideous or wasteful to many others, and would actually degrade the value of their home to an average homebuyer. And any time there are a lot of decisions to be made (layout, fixtures, etc.) there are bound to be some people who disagree with at least some of the various choices. Making improvements for the sake of increasing the value of the home on average is a difficult plan. People often overestimate the extent to which their taste and choices are seen as sensible ones by others.

There is (or at least was) a whole industry in the Bay Area of "staging" homes for open houses, which was quite a trip. Emptied-out houses would be briefly furnished and decorated simply and neutrally for the open house, with the yard cleaned up briefly (often by dumping loads of bark over dead grass or neglected areas.) We saw the same cute little red wagon parked in multiple open houses in the Oakland/Berkeley area in the late 90s. Apparently the resulting increase in sale price was worth the trouble of the logistics of staging the house.

Another issue with both tax and sale appraisals is that housing prices are often strongly dependent upon things which are likely to change and are external to the specifics of the house. For example, the number of houses currently for sale (supply) strongly affects the sale price. Consider the difference in price for a nice established neighborhood with good schools. If there isn't much turnover, say a desirable tract with 200 houses may have two or three for sale at a time, the prices will be higher. But if there were fifty houses for sale simultaneously, there is no way they could be asking/getting the same price as if there were only a few. That supply of houses for sale could change suddenly upward (say a major employer suffers, or a nearby military base is to be closed) and then there could be a bunch of people who wouldn't be able to get nearly as much for their homes as they would have had they decided to sell or move in a period of stability or a rise in jobs or amenities in the area. So assessments/appraisals basically are assuming that things overall don't change much, and finer distinctions in value are often swamped by stronger overall external events.

It's true that many of the things that people do to "improve" the value of their homes are seen as hideous or wasteful to many others, and would actually degrade the value of their home to an average homebuyer. And any time there are a lot of decisions to be made (layout, fixtures, etc.) there are bound to be some people who disagree with at least some of the various choices. Making improvements for the sake of increasing the value of the home on average is a difficult plan. People often overestimate the extent to which their taste and choices are seen as sensible ones by others.

There is (or at least was) a whole industry in the Bay Area of "staging" homes for open houses, which was quite a trip. Emptied-out houses would be briefly furnished and decorated simply and neutrally for the open house, with the yard cleaned up briefly (often by dumping loads of bark over dead grass or neglected areas.) We saw the same cute little red wagon parked in multiple open houses in the Oakland/Berkeley area in the late 90s. Apparently the resulting increase in sale price was worth the trouble of the logistics of staging the house.

Another issue with both tax and sale appraisals is that housing prices are often strongly dependent upon things which are likely to change and are external to the specifics of the house. For example, the number of houses currently for sale (supply) strongly affects the sale price. Consider the difference in price for a nice established neighborhood with good schools. If there isn't much turnover, say a desirable tract with 200 houses may have two or three for sale at a time, the prices will be higher. But if there were fifty houses for sale simultaneously, there is no way they could be asking/getting the same price as if there were only a few. That supply of houses for sale could change suddenly upward (say a major employer suffers, or a nearby military base is to be closed) and then there could be a bunch of people who wouldn't be able to get nearly as much for their homes as they would have had they decided to sell or move in a period of stability or a rise in jobs or amenities in the area. So assessments/appraisals basically are assuming that things overall don't change much, and finer distinctions in value are often swamped by stronger overall external events.

lfstevens - you miss the point of Scott's premise. The appraisals are primarily based on size/numbers of rooms, location. What that does is force people build bigger homes to meet those criteria instead of building a smaller, more efficient, higher quality homes. When I built my home, it was a custom design with a lot of energy efficient features and quality finishes. The bank told me that there was no way they would loan me $X to build a home of 2,500 square feet with 3 bedrooms and to get $X, it needed to be 3,000 square feet with 4 bedrooms. They didn't care a bit about quality or efficiency.

Unless you have the cash, forget getting a loan for a nicer, effecient small house.

See: The Not so Big House book... you couldn't get a loan for any of those beautiful houses.

All this talk about houses reminds me of a quote from Arthur Ransome, the great British author:
"Houses are but badly built boats, so firmly aground that you cannot think of moving them. They are definitely inferior things, belonging to the vegetable, not the animal, world, rooted and stationary, incapable of gay transition. The desire to build a house is the tired wish of a man content thenceforward with a single anchorage. The desire to build a boat is the desire of youth, unwilling yet to accept the idea of a final resting place."

I both bought and sold my first house in the last 4 years. I found pretty much the same thing as you, Scott. In the city where I used to live, the price of a house was a reflection of only two things: neighbourhood and square footage. Although, in my experience, the price had nothing to do with home appraisers, just the real-estate agents.

Yes, an appraiser is generally biased when it comes to energy efficiency issues of the home or business. Solar system for example are lumped in with other categories of amenities such as swimming pools when establishing values. Pools deteriorate because of moving parts, corrosiveness of water and chemicals and biological growth. Solar PV has a long life, no moving parts, little water damage and long guarantees for the electronics. Yet the appraiser often apply functional obsolescence depreciation similar to a pool, landscaping, add ons or other home improvements. Solar is the only home improvement that actually pays for itself over time. Some buyers do not want pools for various reasons. Who would not want solar on their house if it lowered their energy bill?