There's rarely a week that goes by when a Buyer, Seller, or an acquaintance doesn't contact me in panic about the undervalued bank appraisal they just received on their refinance or equity loan.
I know exactly how you feel . . .
Bank appraisers are like meter maids - they have a penchant for ruining your day.
Cliff and I have been considering a kitchen remodel for years, so when our friendly, local banker asked us if we would like to increase our current equity line (now that home values have improved considerably), I jumped at the chance. Who knows when banks will tighten the flow of funds once again?
"We don't actually have to spend the money," I explained to my reticent husband, but if we DO decide to move forward, we know the dollars will be available to us." (Of course, I'm hoping we spend the money; I need a new kitchen, like yesterday.)
Moreover, IF we should decide to sell when our youngest heads off to college, the kitchen will need a sizable face-lift anyway (I know these things.). Why not enjoy the benefits of a new and improved kitchen while we still live in the home?
Having successfully persuaded my husband (sort of), I gathered our tax returns and obediently handed them over to Wells Fargo. Since we already have an equity line in place, expanding it, was simply a matter of confirming our income and ordering a new appraisal.
"Congratulations," Patty said a few short weeks later, you and Cliff have been approved for the additional dollars."
"That's great," I responded, "So where did our house appraise?"
That's when the bomb went off . . . Say what?
Never mind my short-lived joy at having been approved for the larger loan and the fact that I would soon be meeting our architect to finalize plans, I was admittedly upset at the Appraiser's failure to understand the true quantitative value of our home.
I'm not referring to its "market value," I am talking about its actual WORTH! And because I am a REALTOR by trade, I had even arrived with comps in hand to help the Appraiser along. Clearly, she had ignored my informative prompts.
I get it, banks are conservative by nature with respect to equity lines (and probably should be) and our house is difficult to accurately appraise. While it's not GRAND by Piedmont standards, it is fairly unique; offering 4 bedrooms/3 new bathrooms, beautiful gardens on expansive grounds, a picture- worthy gazebo, a swimming pool, a separate cottage & office, and a batting cage! (What's not to love?)
AND given that a similar style home in the center of town had just set a new sales bar, I assumed the Appraiser would be equally impressed. That certainly wasn't the case - not by a long shot. Based on that sale, her appraisal was at least half a million dollars off . . . or more. (Ouch.)
Here's the thing, appraisals are just one person's opinion of value; they actually tell us nothing about what the market will bear, OR where the house will sell. In reality, the appraisal (anemic as it was) did exactly what it needed to do - it got us the funds to (potentially? absolutely!) remodel the kitchen, so what's my BEEF? Who cares what the appraisal says today when Cliff and I don't have plans to sell the house for several years to come?
Okay, here it is (although I'm loathe to admit it) like many homeowners, I have a fair amount of EGO wrapped up in my house. (Do tell?) I don't just sell homes, I am passionate about them, and about mine in particular, which has evolved into something I believe is truly special. (Sound familiar?) AND to be blunt, I have worked my fingers to the bone on our home. I don't just hire gardeners, I am the gardener. Don't I deserve a little validation; some tangible proof that my vision has paid off? Is it really too much to expect that the appraiser get it right? (Evidentially, it is.)
So I am throwing a party instead and inviting my colleagues, neighbors, clients, and friends to join me. (What are friends for anyway if not to mend your bruised ego?) I have rented a LARGE movie screen, hired a caterer, and am putting my son and a few of his buddies to work as we participate in an evening of "Starlight Cinema." If all goes well, I will happily make this evening an annual event.
AND I am going to try to remember that Cliff and I bought our current home because we imagined gatherings just like this, along with family Thanksgiving dinners, elegant Passovers, and fun-filled Fourth-of-July festivities; not because of its "appraised" value (our homes aren't meant to fill in a balance sheet).
I will recall that we bought our home for the lovely community it offered, for the high-ranking schools, and for its unlimited potential. Perhaps one day, we will even see a garden wedding there??? (It could happen.)
What an out-0f-area Appraiser thinks about our home's value should be of absolutely NO value to me whatsoever - beyond the loan approval. Still, I'm not inviting that Appraiser to my party.
She can go ruin someone else's day.
Piedmont's first home game started off with a resounding win, with a 44-16 victory over Albany. Our younger son Tristan is a receiver for the Varsity team which means that Cliff and I attend every game, loudly cheering him, and his teammates on. (Okay, I'm the one screaming wildly; Cliff quietly keeps stats on the sidelines.)
On our way to the stands last week, I bumped into my friend, Terri, who was wearing her son's jersey and looking rather proud. "Isn't it sweet?" she exclaimed, "My younger son asked me to wear his number and even though it smells like 'boy,' (meaning it hadn't been washed in a week) I'm going to wear it anyway." (Yes, it was sweet) and she wasn't the only mom I noticed in purple and white that evening.
I have to admit that the social politics of the jersey is a new aspect of the evening for us mothers of Varsity sons. In my day, it was the letterman's jacket; I suppose it's the same idea now.
No, my son hadn't asked me. Instead, at the end of the game I spied a bevy of young ladies lined up in Piedmont jerseys, including an absolutely stunning girl wearing the number 23 - I hadn't a clue who she was, but I was determined to find out. The next morning, I put on my investigative hat and casually approached Tristan after breakfast.
"Hey Tris, I couldn't help noticing that several mothers were wearing their sons' jerseys last night," I said. "You know, I would happily wear yours if you would like." (Hmmm?)
"No offense, Mom," Tristan casually responded as he unloaded the dishwasher, "but did you SEE the girl wearing my jersey? I went for the gold." (Gee, now why would that offend?)
For my own piece of mind, I'm going to assume that she's as lovely on the inside ("pretty is as pretty does").
Understanding what's on the inside of a house is crucial to any home purchase as well. I recently helped a well-intentioned young couple get into contract on a very pretty "flipped" home in Montclair (that's a home that was purchase under market value and quickly renovated to turn a profit) only to discover that when we began the investigations on the property, the house wasn't nearly as "pretty" as it had seemed at first glance.
The supposedly zero-pest certificate wasn't in fact zero!, Our inspector quickly uncovered an active beetle infestation requiring tenting, rotted joists under the driveway, and a broken sewer pipe that was emptying into the crawl space below (yuck) - and that wasn't the worst of it . . .
"This was a grow house," the engineer bluntly said. "There's all kind of discarded paraphernalia and trash under the house, but that's not your biggest concern. With respect to the structure, there are yards of dirt piled against the rear wall which is completely rotted as a result. I can't begin to tell you how much damage there is until we remove the soil . . . and FYI, you can no longer take dirt to the dump without having it tested first for contamination," he warned. "At the risk of killing the deal, I wouldn't walk, I'd run." ('Nuf said.)
Although this house had seemed like a good deal at first glance, the costs to remedy the defects were quickly adding up to well beyond what this young couple could afford. There were so many red flags, it wasn't even worth negotiating; it was simply time to cancel the escrow, refund the Buyer's good-faith money, and find another house. (Better luck next time.)
In my practice, "due diligence" isn't optional, it's mandatory on every home purchase, and this story is the perfect example of why. Although the prospective Buyers had spent close to a $1,000 on home, pest, and engineering inspections, in the end, their due diligence had saved them TENS of THOUSANDS in hidden costs and uncovered a home that was nothing like it appeared to be on the surface. Given that homes are incredibly expensive to own and maintain, it's money well spent - don't you agree?
Finally, understand that even if you are willing to overlook a home's significant defects (you may, and people often do), the next Buyer is unlikely to be as forgiving. Remember that with every home purchase, you are not just a prospective Buyer; you are a prospective Seller down the road.
If you are getting a very good deal AND you have the money in reserves to address the issues either now, or in the near future, it may make very good cents to take on these added expenses.
On the other hand, if you are buying what you believe to be a fully "renovated" home, you'll want to make sure that it is, in fact, fairly worry free. OR, as we were all taught: "Beauty is only skin deep; it's what's inside that counts."
Word on the street is that last week's young model displaying my son's jersey, isn't just "pretty," she's also a very sweet and bright girl. What can I say? Tristan has very good taste in women.
Here's where I salvage my pride and take credit for that.
"Does she or doesn't she?" (She does.) I'm not giving away any trade secrets here, but let's just admit that women of a certain age (uh, that would be me) require a little more maintenance than when when we were younger. Gone are the days when I could casually over indulge, then hit the gym and quickly work off whatever regrettable sins in which I'd participated . . . like ice cream. (Really, who can say no to gelato?) In truth, no matter what age, or what phase of life, a little care and upkeep are hard to argue.
Not surprisingly, that's true of our homes as well. While often, it's the threat of an impending sale that finally gets homeowners into action, there's no law that says we have to wait. In fact, we shouldn't. Given that our homes are usually, our single most valuable asset, whether or not you'll be selling your property in the near future, or hanging onto it for years to come, it's time to take stock of your surroundings and start prepping for whatever lies ahead.
That may entail a large-scale project, such as a remodeled bathroom, updated kitchen, or new landscape, OR it may just involve fresh paint and a thorough cleaning of the cobwebs, but either way, ongoing maintenance is a MUST for all homeowners. If you're not willing to keep up your house and grounds, may I politely encourage you to rent instead? (Despite the incentives, home ownership ISN'T for everyone.)
Unfortunately, it takes just a few short months for a property to begin to look neglected and fall into disrepair. DON'T let that happen to yours. So here are a few items to put on your Fall "To Do" list before the winter rains hit and the weather cools considerably. (You're welcome, you can thank me later.)
1. Furnaces should have an annual replacement of their filters. Any good plumbing/HVAC company will do this task for a reasonable fee, OR save the dollars and head down to your friendly ACE Hardware or local Home Depot (albeit, less friendly) and replace the filters yourself. (Remember to take the old one with you as there are many sizes from which to choose.)
2. The leaves are definitely dropping, which means a good deal of debris is probably accumulating on your roof. If so, it's time to get out the ladder and clear those gutters. My own sweet house sits under several magnificent Redwoods, so my boys get to do this job several times each year. (Nothing says "happy homecoming" like "son, I need a favor . . ." as I hand him the blower at Thanksgiving.)
3. Daylight savings is right around the corner so it's going to get dark earlier and earlier (boo hoo). Take a peak outside and see what light bulbs need replacing and then REPLACE THEM (Okay, maybe I meant that one for Cliff.) Ditto for smoke and CO2 detector batteries. BTW - not every house currently has a CO2 detector, but they are now a "point-of-sale" ordinance when one goes to sell, so it's not a bad idea to get on board now. Moreover your family will be much better protected. (Note, the law requires one per floor.)
4. Fall is a great time to mulch and to trim dormant trees (wait on cutting back the shrubs until late February). It's also a terrific time to add new plants and bulbs to the garden, allowing winter rains to establish nice deep roots. You'll be thrilled come the Spring.
5. Put away or cover all garden furniture, turn off the sprinklers once the rains begin, and for those of you with pools, shut down the pool heater until next spring (let's get through the heat waves first).
6. Do you use your fireplace a great deal in the winter? If the answer is yes, hire a chimney sweep to give it a thorough cleaning and inspection to make sure the mortar is tight and the spark arrestor is in place. (This isn't a do it yourself chore; aside from it being rather messy, it takes a trained eye.) AND don't stack the wood against the house; this only invites termites into your home. (Not good.)
7. Finally, if your kids have just stocked up on new clothes for school, now is a great time to pass along those things they have outgrown or never wear (especially winter coats). Take them down to the center of town (the drop-off is behind the pool) and donate them to "Dress Best for Less," which not only benefits our schools, but helps purge your closets in the process. It's a win-win for everyone!
Okay, that's my Fall list for getting into action (now if I could just hit the gym).
What's yours? Send me your suggestions and I'll share them in the coming weeks. (Doesn't it feel good to check these items off your list? Yes, it does!)
I am back at my desk after two and half weeks of being displaced and I couldn't be happier. The GRUBB Co. had decided to do a little end-of-summer remodeling, which meant that several agents were politely shown the door (including me). Hmmm . . . what had been billed as a few days, turned into a few weeks, and then some.
Unfortunately, those of us dependent on our hard drives and desk tops would have to make do some other way. (I leaned on the girls in our escrow and marketing departments, thank you very much) Such is the course of renovation; it's never as easy as we might wish or as seamless as we were lead to believe.
No matter the inconvenience, it's worth it! I actually enjoy the process of renovation and rejuvenation - and the purging that goes along with it. It offers the opportunity to design a space to fit our needs - not someone else's and edit unnecessary "stuff."
Currently, I have my sights set on a kitchen renovation at "Casa Gardner" that encompasses some well-placed French Doors, a butler's pantry (never mind that I don't have a butler), Carrera marble counter tops, and new skylights that let in the sun. (Now if I can just get my husband, Cliff, on board).
I've discovered that with property values on the rise and with the return of confidence in the marketplace, banks seem to be much friendlier about issuing and expanding credit lines to qualified homeowners (the operative word here is "qualified").
"How much do you need?" my personal banker, Patty Edmonds at Wells Fargo, asked me? (Gee, what a difference a few years make!)
I'm not sure, but can I have it just in case?
That isn't to say that one should always tap out the built-up equity on their home in order to make improvements, but given recent sales - especially on "turn-key" properties - it's a smart time to invest in what is very likely, your single largest asset. Since the cost of a new kitchen far exceeds the spare change in my coin jar, my choices are to live with the kitchen AS IS (perish the thought), or borrow against the equity to renovate (I vote for the latter).
Keep in mind this avenue works only IF you have a fair amount of equity in your home, BUT if you do, it may be very worthwhile to consider updating and replacing outdated bathrooms and kitchens at this point in the game.
Because Buyers like them and will bid aggressively for designer bathrooms and kitchens. If there is an adjacent family room, so much the better. I am convinced that one property I represented in Oakland earlier this year saw an additional $200,000 on the sale price after a $40,000 upgrade in bathrooms. (That's not a bad return on investment.)
Here in Piedmont, we have seen homes go as much as $500,000 -$600,000 OVER the listing price when the house was "camera ready," exceeding everyone's expectations, especially the Sellers. (WOW!)
But we're not selling our home for a few years yet.
Excellent, so why wait until you do? Chances are, I am going to show up and encourage you to "update" if a move is on the horizon and improvements haven't yet been accomplished. Why not enjoy the kitchen and bathrooms while you still own and live in the house? Why give the new owners all the pleasure?
That's my story and I'm sticking to it. "Oh, Patty . . . "
Julie Gardner, has been writing The Perspective for 18 years and has published more than 670 essays on life and real estate.