Phone 603-393-6283
Loudon, NH 03307

I'm happy to answer your questions by Email.

There is no charge for consultations or for general questions about real estate or appraisal services.

I have have retired from appraising after 35 years, but remain available for general questions about the real estate and appraisal industries. For how long? I haven't yet decided, But I have posted a few commens, suggestions and opinions. My phone number will remain active, and I encourage friends and relatives to contact me for my permanent and personal email address as this site and email link will eventually come down.

MARKETS CHANGE We have recently experienced a "hot" market where sellers were in control, driving home prices up for an abundance of willing buyers. One of the things I noticed in 2021 was that there were two levels of pricing, one for buyers who were financing their home purchases and one for buyers paying cash. Both may experience problems in the future when the market stabilizes or declines. A decline in property values ma come from fewer buyers and an oversupply of sellers, or from rising interest rates.

INTEREST RATES CHANGE Interest rates have been held at historic lows for several yeats during the pandemic. However, inflation is becoming a problem and that will lead to rising interest rates. Higher mortgage interest will make homr purchases more expensive, possibly forcing prices down. Not a problem if you have recently purchases with no plans to resell, but a problem if you want to refinance as the property may appraise for a lower value in a down market.

REFINANCING I have often advised that a house may be an investment, but a home is not. What I have tried to convey with that statement is that a home should be a place of security and comfort, the place where we raise our children, families gather for holidays, where we keep our memories of childhood. When we refinance fror a "cash out" we are using the property as an investment, and that can bring a feeling of insecurity because it means a loss ofr equity. Think of the question this waqy; can you retire if you have a mortgage? For most of us the answer is no.

Lastly, appraisals may or may not be reliable indicators of value. Every appraiser has an idea of the expected (or needed) value or a property from the start of the assignment. There is a purchase agreement, a comment by the homeowner, something from the bank or mortgage company. Every appraiser will tell you, if they are homest and open, that missing the target value will eventually cost them the loss of a client. Appraisers are sensitive to client's needs. Lenders require aqn appraiser to carry E&O (Errors and Omissions) insurance to cover losses from repurchases due to an inadequately supported value. Lenders expect that some properties will be overvalued, will blame the appraiser and through E&O insurance have devised a way to collect damages.

Every appraisal that I have reviewed for a client, without exception,has contained errors that affected the value, often by tens of thousands of dollars. Recognizing these errors is easy because they are always the same ones. It usually takes only a couple of minutes to pick out the major errors. The effect of overvaluations, in the short term, is extra money for the borrower and extra profit for the lender. In the ong term, possible foreclosure, repurchase costs to the lender, and several times during my career a crashed economy and recession.

I'm happy to answer your questions by Email.

Last Updated February 7, 2022