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Okay, there is technically never a “Black Friday” Sale on real estate since most property is owned individually and not offered as a special.  Black Friday is however, within the traditional seasonal downturn in real estate.   Using Hillsborough County NH as example (see graph below) , even in an overall increasing market, there are peaks and valleys that are attributed to different seasons.  Whether your house is located in Manchester, NH, Bedford, Merrimack, Nashua or Concord, prices rise in the spring/early summer, stabilize in the late summer/early fall and decline in the late fall/winter.

So how does this translate to Black Friday?  Well, if you are truly looking for more affordable prices, considered looking at real estate during the busy holiday season.  While others are shopping for TVs, you shop for real estate.   Sellers are often more flexible since they know it may be months before the winter market “heats” up again.

 

 

Keep in mind if you are order an appraisal (ore reviewing someone’s) whether it is for a divorce, estate, listing or sales purposes, the results can vary significantly as the opinion of value is as of an exact effective date.

If you have any questions, don’t hesitate to call me at (603) 644-1000 or email me directly at: JackLavoie@comcast.net

Happy Black Friday!!

 

 

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Several communities have recently completed re-assessments that have left many people wondering how they can abate (reduce) their taxes.  Even if your city or town has not completed a “re-val” you can question the assessment by a process called tax abatement.

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In all New Hampshire communities, all assessments are paid on the market value of the property on April 1st of the tax year.  Therefore, for the 2016 tax bill, the assessment must reflect the “equalized” value of the property as of April 1, 2016.

Since prices/values can decrease and increase over the years, the state allows assessment to be higher or lower than market value provided that they are equitably assessed.  What does this mean?   Let’s say you live in Manchester NH and the average assessment is 110 percent of market value (example only) and your property is 10 percent over assessed.  In this case you are equally assessed (or equally over-assessed) and have no case for abatement.

 

How do you file an abatement?

Step One:  Obtain a copy of the tax assessment card from your community.  If the full card is not available online, I suggest you go to the town and obtain the full card which has the most detail.

 

Step Two:  Carefully review the card to accuracy.  Note the assessor’s ratings with regards to condition and quality.

 

Step Three:  Research comparable sales, enlist the assistance of a realtor friend or hire a professional appraiser.  If hiring an appraiser, select one that has experience in this type of assignment.

 

Step Four:   Complete the State of New Hampshire Tax Abatement Form.  Here is the link to download the form:       https://www.nh.gov/btla/forms/documents/municipal-abatement.pdf    The abatement MUST be filed no later than March 1st following the tax year (March 31, 2017 for 2016 tax year).

 

The abatement form summarizes the rules, deadlines and procedure for abatement.  If you need assistance in analyzing your property do not hesitate to call Jack Lavoie, SRA at 603-644-1000 or email at: jacklavoie@comcast.net   For more information, find us on our website at www.AppraiserNH.com

 

 

As I have discussed earler, real estate values are not linear.  Each year in New Hampshire, prices change and follow a predictable path like the graph illustrates.  Prices rise in the spring, level off in the summer and early fall and decline in the late fall and winter.  Check out “North End” Manchester as of 12/15/2016.

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seasonal-effect-of-valuiesEven in years where the market seems stable, property values fluctuate over the course of the year. Historically, values increase in the spring and early summer, stabilize in summer and early fall and decrease over the winter season. This is attributed to several factors such as the “holiday season” and the harsh cold winters we experience in New Hampshire. To illustrate, I have included a graph of Hillsborough single family houses over the last three years. I have noted by highlight and red pen the bottoms of the annual market which happens usually around February or March. The “high water mark” is typically around June or July. So remember, house values DO change regularly. Keep that in mind when you are evaluating your house and making a financial decision. Don’t hesitate to reach out to us if you have questions!

 

I would still categorize the Southern NH real estate market as strong, however I am seeing prices begin to level off and inventory rising slightly. The seasonal market can change quickly in New Hampshire. If you are selling your house and its not moving, speak with your agent and re-examine the price. The spring and early summer brought bidding wars on properties. They are not taking place anymore (certainly there are exceptions).   Don’t be behind the curve. house for sale  xx

If you would like a snapshot of YOUR market, reach out to Jack at: jacklavoie@Comcast.net

 

Here is the scenario… You decide you want to buy a certain “For Sale By Owner” home and the seller informs you that the house “appraised” for $280K only two months ago. He is asking $280K, but will let you have for it for $270K. You might be thinking…. Hmmmm, such a deal!.. 10K instant equity!! After all, it is a certified appraisal completed by licensed appraiser.  In a perfect world, an honest, credible appraisal by a competent appraiser SHOULD be reliable, unfortunately, it may be not.

The first thing I would recommend is to obtain a copy of that appraisal. If the seller refuses, the appraisal probably does not exist. If the appraisal is produced, the next step is to find out WHO order the appraisal and WHAT was the purpose for the appraisal.

What if the appraisal was “fluffed” up so to show more equity so the owner could refinance?

What if the appraisal was ordered by the seller’s “soon to be divorced spouse” who wanted to prove the house hubby was getting was worth more?

Maybe the appraiser was inexperienced and not familiar with the area?

What if the appraisal was completed by a real estate broker who wanted to make the seller “feel good” about the value of the home in hopes they would “like the agent” and list their home with them?

The point is that, if you do NOT order the appraisal yourself, you don’t know what the motivation or qualifications of the appraiser are. I only trust two types of appraisals… 1) the ones I complete mself and 2) the ones I personally hire someone to complete.

I truly believe that if you want an unbiased appraisal when purchasing a home, you should hire your own independent appraiser. Yesterday, I did an appraisal on a home in the North End of Manchester. I was doing an appraisal for a lender who was going to finance the purchase of a 3-family investment property. The buyer met me at the property and asked me “Do you represent me or him (the seller). I informed with that I represented the bank and not him. Now, the fact that I am honest, competent and will provide an honest appraisal to the bank will indirectly benefit him, but what if I was not? When this nervous guy told me he was nervous because he was putting most of his savings into the building purchase, I decided that I NEEDED to make this point my friends………………… If you are truly concerned (and you should be) about the value or marketability of a home you are buying… Hire you OWN appraiser.  If you would like to discuss the appraisal process, don’t hesitate to email me at jacklavoie@comcast.net

P.S.  I may have painted a poor scenario of the appraisal profession.  The truth is, like most professions there are always a few bad apples.  The vast majority of the appraisers I know are honest and try to do a credible job.

Each day I receive calls and emails about various real estate, appraisal and financial topics. Occasionally, I select some of these questions and share them. Here are a few of them.

 

Broker: What are the rules for well and septic setbacks for FHA?

Jack: For FHA & USDA, private wells MUST be 50 feet from the septic tank and 100 feet (75 feet in New Hampshire) from the drainage field (leach field). In addition, the well must be 10 feet from property lines. If it does not meet these setback, it does NOT meet FHA standards.   If you try to finance a property that lacks these setbacks with either FHA or USDA, the appraiser MUST (no subjectivity involved) report this to FHA. At that point, the loan is in serious jeopardy. A few possible solutions are; 1) change the loan program to conventional 2) Move the well or septic 3) connect to public water and/or sewer or 4) apply for a waiver from FHA.   I don’t deal with the waivers, which is left for the lender to do. It is my understanding that the waivers are tedious to obtain and not guaranteed.

 

Potential Seller:   I hear the market is crazy! How long do you think it will last?

Jack: Here in New Hampshire, we have a very season driven market. Even when prices remain level from year to year, prices vary from season to season. Winter and holiday cause a slowdown in the winter and prices tend to bottom out. In the spring, there are more buyers (and more sellers too) and prices rise. Prices rise through early mid-summer then tend of level off through the fall. In the mid/late fall, values begin to drop and “bottom out” around January.   The crazy thing about the “spring market” (which extends into summer), is that when it starts, it ignites light a flash fire and when it ends, it stops like a car hit the wall. My guess is that the “fast market” will end shortly (if it hasn’t already) and we transition to stability and then to declining. Again, all seasonally.

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Listing Broker: I am listing a 2,400 SF contemporary style. Do contemporary houses sell the same as colonials or other traditional two-story houses?

Jack: It really depends on the market. There is an appraisal an economic term called “conformity”. In laments term, to maximize the value of house it should “conform” to the neighborhood. Take a look at new construction? What are they building which represents what today’s buyer are seeking? If they are building all colonial style houses than the contemporary will most likely have less demand. Towns that have a strong preference for colonials (Bedford and Hollis come to mind), will discount the value of contemporary houses. Towns with a mix of different styles may not discount the style as much (if any). Note: The broker indicated the property was located in one of the two towns mentioned and I told him that it was a strong possibility that a contemporary house would sell than similar sized, quality and conditioned colonial style houses.

Pool

Pool Owner: Do inground pools add value?

Jack: Unlike many of my colleagues, I do believe than pools add significant value to the some houses. Emphasis on SOME! Whether or not it contributes value and how much depends on the neighborhood, the features/characteristics of the house in general as well as the quality of the pool and its amenities (fencing, decking etc.). Another factor is how the house is designed. If it is set up for entertaining, than a pool may be natural fit.    One “trick” I use to measure demand of pools is by looking at aerial photos. If you looks at the 20-30 houses closest to the subject and see that there are hardly any pools, then the market is probably showing you that the pool has little value. Conversely, if you see that 20+ percent of the houses have pools then it would support more value for the pool. 35+ percent would be mean more value. As for how much value, in nearly all cases, the resale contributory value of the pool is much less than cost of installation including amenities. I can’t tell you exactly how much your pool is worth, but I here are two examples of recent houses I appraised that had pools;

 

1,300 SF Ranch in Manchester: The pool was a modest 16×32 vinyl lined pool approximately 10 years old. It has a modest chain link fence and minimal concrete decking around it. The condition was good. The aerial photos showed only two inground pools in radius of 75 +/- houses.   My conclusion was that while the “replacement cost” of that pool would be $30,000+, its contributory value to THAT house and neighborhood was anywhere from Zero to $5,000.

 

3,300 SF, Colonial in Londonderry: The house was a nice quality house and the pool area was well landscaped. The layout of the house was conducive to entertaining and outdoor enjoyment. The value range of the homes were $300 to $500K. The pool most likely would cost $40,000+ to rebuild. My conclusion was that it added $10,000 to $15,000 in value.

Note: Many appraisers and brokers have relied on the “Pools don’t add value because it’s a short season and not everyone wants a pool” and therefore bank underwriters have taken this as gospel. When I completed my recent appraisal that gave $12,500 for the pool, the underwriter said the adjustment as “excessive”. After I provided my data (paired and grouped data analysis, as well as “Probability of use method”, she backed off and accepted my adjustment.

 

Jack Lavoie is an SRA designated appraiser and New Hampshire real estate expert. He can be reached at 603-644-1000 or email at jacklavoie@comcast.net