Real Estate Appraisal Questions/Discussion

Steel Valley FB

Well-known member
I haven’t posted here in years until a couple weeks ago, but thought if I could help anyone with questions about real estate, appraisals, or the Central Ohio market in general, that I’d get a thread going. I’ve been a licensed appraiser in Ohio for 25 years. Post questions here or PM me if you prefer.

It actually might be a good time to get into this field as the average age of appraisers in Ohio is around 55 years old, I just read somewhere. Appraisers have been hearing for 15-20 years about how computers will be taking over our jobs, and while there are some AVM models out there, I haven’t seen it yet. 2019 was probably my busiest year ever.

I don’t sell houses - I just appraise them. Realtors and appraisers generally don’t see eye to eye. I know a lot of realtors and like most of them personally, but I don’t like most aspects of their job and how they go about it. I could explain why, but I’d likely offend any realtors who post/read here. That’s ok too though. :)
 

D4fan

Well-known member
I haven’t posted here in years until a couple weeks ago, but thought if I could help anyone with questions about real estate, appraisals, or the Central Ohio market in general, that I’d get a thread going. I’ve been a licensed appraiser in Ohio for 25 years. Post questions here or PM me if you prefer.

It actually might be a good time to get into this field as the average age of appraisers in Ohio is around 55 years old, I just read somewhere. Appraisers have been hearing for 15-20 years about how computers will be taking over our jobs, and while there are some AVM models out there, I haven’t seen it yet. 2019 was probably my busiest year ever.

I don’t sell houses - I just appraise them. Realtors and appraisers generally don’t see eye to eye. I know a lot of realtors and like most of them personally, but I don’t like most aspects of their job and how they go about it. I could explain why, but I’d likely offend any realtors who post/read here. That’s ok too though. :)
I have often thought about becoming an appraiser, but I am now about the age of the average appraiser.

This year was a bit interesting as property was re assessed for tax purposes. Some land was appraised very close to previous while other got hit with 100%+ increase in valuation. Are these real appraisers or government hacks?

Now for a more serious question for you, in todays vacant land market we are seeing land prices rise to 2-3 times the tax valuations made by the auditor. Is cash the only thing able to create this situation? I assume the bank would not lend to these extremes.
 

Steel Valley FB

Well-known member
Counties use a concept called “mass appraising” when assessing for property taxes and it’s a mystery to licensed appraisers everywhere mainly because we don’t use the models they use. I’d have to google those models and might only be able touch on certain points even then as they get specific training in mass appraising. No appraisers I know want that training/job lol. We do notice the mistakes though and the truth is they’re bound to happen because they simply can’t blanket assess the market value on everything and get it all correct. It’s much easier to appraise an individual house, obviously.

I do know the models end up with assessments that to tend play catch-up on purpose though. Nearly every house we appraise is undervalued in its assessment and that’s just to err on the side of caution as not to over assess property owners. That’s assuming the county has it close to correct. They want to be close, but slightly under as many people are aware. Over assessing leads to phone calls to the Board of Revisions department and most auditors are understaffed as it is. They reassess properties every six years in Franklin county with an update every three years and I think the other 87 counties by law do the same.

You’ll also notice a property or a parcel’s taxes will increase after it sells as its the easiest method to determine current market value of course...assuming it was an arms-length transaction. We rely on the county auditors’ ability to make that determination and they’re generally better the more developed the market is. Franklin vs Licking, for example is night and day with their documentation so I hate working Licking. They’re wrong a lot and behind on everything. They just recently got photos of the houses for each parcel on their auditor website where Franklin has had them for decades. Current photos go a long way in our business when properties aren’t visible from country roads or from being in wooded areas.

I’m assuming you’re talking about agricultural properties based on asking about land and your farming answers in the other thread and so the specifics to your question are difficult to answer. Mainly because I’m likely not in your county/market and I’d also need to examine the auditor files online and similar nearby recent sales, but also because being in Columbus 95% of my orders are single family or 1-4 unit. Rural work just doesn’t make sense financially for most urban/suburban appraisers.

You should call a realtor and tell them you’d like a CMA done for a certain property or area of properties. You’d likely be able to extract the trends by comparing similarly-sized land sales with their current assessment, but you’d want to note external things both positive and negative...adjacent or nearby RR tracks, highways, heavily trafficked commercial areas, airports, etc...though it becomes a lesser affect on farm land. External things you won’t know though are future planned occurrences like state, county, or corporate development nearby. That can affect sale prices if the transaction has inside knowledge attached. Ponds, creeks, ravines, woods, etc affect large-acreage affect residential sale prices, but in the case of farming I’d suppose hindrances to crop development would come into play like soil viability or environmental negatives like contamination from large or corporate farms or underground tanks of various types. Some of that you’d have to pay to find out or possibly couldn’t ever determine. The realtor CMA would likely be free but then realtors tend to hound people for years to get listings. Just tell them you need it to analyze tax assessments only and you’ll highly recommend to your large group of family and friends often. Realtors eat that up. To quote Lester Bangs to ‘Ben Fong Torres of Rolling Stone Magazine’ in Almost Famous, “they’ll wet their pants” lol.

My second paragraph up from here brings up another point or tip to potential home buyers, maybe someone reading here. Don’t assume your gross monthly housing expense, which includes your mortgage payment, insurance, and taxes will remain constant when determining home affordability. Make sure the current taxes aren’t artificially low due to a previous sale being a non arms-length sale like an estate, probate, bank, or sheriff sale, for example, but there are others. More commonly, though, be on the lookout for homes that haven’t sold in a long time. Those property taxes are far more likely be based on an under assessment. I’ve seen taxes go up 25% after a sale. Depending on the market, that can be significant. My buddy in Grandview Hts, also an appraiser actually, had his taxes jump from $7000 to $14000. Had he sold before the impending reassessment, of which he was aware, the new owner would have taken that hit, unbeknownst likely. Realtors don’t catch that, let alone the average buyer. I generally don’t track those things but I see it often enough to guess there are way more that I don’t see. The more developed the area, the better likelihood the county has ample sales data to get the assessment correct or close, but not as a rule as I see it in high foreclosure urban areas as well.

Obviously you’d also want to know if a house you’re buying is over assessed. Making that determination can be tricky, but the end result is always filing with the auditors’ Board of Revisions office. It usually involves bringing an appraisal to the hearing unless it’s blatantly obvious, but even then they could require one. I did many of those after the market crash in 2006-07. Anyone wanting to talk about their county reviewing their property taxes feel free to post and I’ll share what I know. It used to be free to apply back then I believe - our job in that process usually stops after the appraisal is done unless the homeowner pays us to come in and help them fight it in a second hearing, which I’ve never had to do. I’ve gathered it’s quick and painless if the numbers are in order. A good appraiser will tell you up front if it’s worth the effort, usually requiring a small fee to do the homework, but no appraisal. There are some that will just take your money though. Ask that question up front because appraisers know the value in the first 10% of the job. If they say they wont know value until the report is completed then immediately call another appraiser. Call him out for me before you hang on up on them too lol.
 
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D4fan

Well-known member
Counties use a concept called “mass appraising” when assessing for property taxes and it’s a mystery to licensed appraisers everywhere mainly because we don’t use the models they use. I’d have to google those models and might only be able touch on certain points even then as they get specific training in mass appraising. No appraisers I know want that training/job lol. We do notice the mistakes though and the truth is they’re bound to happen because they simply can’t blanket assess the market value on everything and get it all correct. It’s much easier to appraise an individual house, obviously.

I do know the models end up with assessments that to tend play catch-up on purpose though. Nearly every house we appraise is undervalued in its assessment and that’s just to err on the side of caution as not to over assess property owners. That’s assuming the county has it close to correct. They want to be close, but slightly under as many people are aware. Over assessing leads to phone calls to the Board of Revisions department and most auditors are understaffed as it is. They reassess properties every six years in Franklin county with an update every three years and I think the other 87 counties by law do the same.

You’ll also notice a property or a parcel’s taxes will increase after it sells as its the easiest method to determine current market value of course...assuming it was an arms-length transaction. We rely on the county auditors’ ability to make that determination and they’re generally better the more developed the market is. Franklin vs Licking, for example is night and day with their documentation so I hate working Licking. They’re wrong a lot and behind on everything. They just recently got photos of the houses for each parcel on their auditor website where Franklin has had them for decades. Current photos go a long way in our business when properties aren’t visible from country roads or from being in wooded areas.

I’m assuming you’re talking about agricultural properties based on asking about land and your farming answers in the other thread and so the specifics to your question are difficult to answer. Mainly because I’m likely not in your county/market and I’d also need to examine the auditor files online and similar nearby recent sales, but also because being in Columbus 95% of my orders are single family or 1-4 unit. Rural work just doesn’t make sense financially for most urban/suburban appraisers.

You should call a realtor and tell them you’d like a CMA done for a certain property or area of properties. You’d likely be able to extract the trends by comparing similarly-sized land sales with their current assessment, but you’d want to note external things both positive and negative...adjacent or nearby RR tracks, highways, heavily trafficked commercial areas, airports, etc...though it becomes a lesser affect on farm land. External things you won’t know though are future planned occurrences like state, county, or corporate development nearby. That can affect sale prices if the transaction has inside knowledge attached. Ponds, creeks, ravines, woods, etc affect large-acreage affect residential sale prices, but in the case of farming I’d suppose hindrances to crop development would come into play like soil viability or environmental negatives like contamination from large or corporate farms or underground tanks of various types. Some of that you’d have to pay to find out or possibly couldn’t ever determine. The realtor CMA would likely be free but then realtors tend to hound people for years to get listings. Just tell them you need it to analyze tax assessments only and you’ll highly recommend to your large group of family and friends often. Realtors eat that up. To quote Lester Bangs to ‘Ben Fong Torres of Rolling Stone Magazine’ in Almost Famous, “they’ll wet their pants” lol.

My second paragraph up from here brings up another point or tip to potential home buyers, maybe someone reading here. Don’t assume your gross monthly housing expense, which includes your mortgage payment, insurance, and taxes will remain constant when determining home affordability. Make sure the current taxes aren’t artificially low due to a previous sale being a non arms-length sale like an estate, probate, bank, or sheriff sale, for example, but there are others. More commonly, though, be on the lookout for homes that haven’t sold in a long time. Those property taxes are far more likely be based on an under assessment. I’ve seen taxes go up 25% after a sale. Depending on the market, that can be significant. My buddy in Grandview Hts, also an appraiser actually, had his taxes jump from $7000 to $14000. Had he sold before the impending reassessment, of which he was aware, the new owner would have taken that hit, unbeknownst likely. Realtors don’t catch that, let alone the average buyer. I generally don’t track those things but I see it often enough to guess there are way more that I don’t see. The more developed the area, the better likelihood the county has ample sales data to get the assessment correct or close, but not as a rule as I see it in high foreclosure urban areas as well.

Obviously you’d also want to know if a house you’re buying is over assessed. Making that determination can be tricky, but the end result is always filing with the auditors’ Board of Revisions office. It usually involves bringing an appraisal to the hearing unless it’s blatantly obvious, but even then they could require one. I did many of those after the market crash in 2006-07. Anyone wanting to talk about their county reviewing their property taxes feel free to post and I’ll share what I know. It used to be free to apply back then I believe - our job in that process usually stops after the appraisal is done unless the homeowner pays us to come in and help them fight it in a second hearing, which I’ve never had to do. I’ve gathered it’s quick and painless if the numbers are in order. A good appraiser will tell you up front if it’s worth the effort, usually requiring a small fee to do the homework, but no appraisal. There are some that will just take your money though. Ask that question up front because appraisers know the value in the first 10% of the job. If they they wont know value until the report is complete then immediately call another appraiser. Call him out for me before you hang on up on too lol.
I de decided to try the Auditors board of revision on one property this year where the valuation was raised over 100% and has been in our family since 1955. The result- " sorry, we actually missed about 20k in improvements on that property" so they raised the value even higher, and wanted to go back 3 years on items they had not noticed such as new drives, a new barn and fencing around a cell tower, but assured me the tower itself was not the reason for in reased valuation. The funny part is the tower contract calls for the tower company to pick up increases they cause in property tax. However, the county has doubled my tax but says the tower is not the reason, making the tax burden mine and not the tower companies.

You are correct most of the land I am discussing is agricultural, but some has been purchased as investment land and I continue to farm these acres until I may need to cash them in one day in retirement. I have done the residential house flipping thing, but find I prefer open land due to lack of maintenance and not having a city looking over your shoulder for proper methods of cleanup and disposal .
 

arizonawildcat

Well-known member
How accurate are the prices put forth on Zillow? I live in a fairly nice house with pool in the best part of Tucson. Area has the best schools in the city. My house has an incredible view of the nearby Catalina Mts. Yet according to Zillow my house has appreciated over $100K in two years! No way is my house worth that. So my questions are, do appraisers and buyers rely on Zillow?
 

Steel Valley FB

Well-known member
How accurate are the prices put forth on Zillow? I live in a fairly nice house with pool in the best part of Tucson. Area has the best schools in the city. My house has an incredible view of the nearby Catalina Mts. Yet according to Zillow my house has appreciated over $100K in two years! No way is my house worth that. So my questions are, do appraisers and buyers rely on Zillow?
Appraisers definitely do not like Zillow and the like valuing properties. Put any address into google and the first 10 results are garbage sites that simply repeat data from auditor sites and whatever old MLS listings they could get ahold of. Redfin.com, realtor.com, zillow.com, homes.com, trulia.com, etc. They don’t disclose their valuation models, but they definitely disclose that they’re not responsible for valuation errors. Clickbait is all it is and I cringe every time a homeowner mentions they read on ______ that their house is worth ______ lol. What we do use them for is rental data when MLS isn’t providing enough active or sold listings in the neighborhood. I’d even say I rely on them. So, yes, they serve a purpose...just not the purpose curious homeowners are using them for.

However, depending on your price range, a $100,000 might be reasonable. A $900,000 house in a neighborhood appreciating at 5%/year for 2 years is $992,250. That’s not unheard of in some Central Ohio markets like Upper Arlington, Grandview Hts, Bexley, Marble Cliff, New Albany, Powell and certainly some desirable markets in Arizona.

Though I’d wager that Zillow adds in an appreciation factor based on the assumption that owners are making improvements when that’s a huge unknown in reality. Some are, some aren’t...and at various levels. Couple that with the fact they could say they’re estimating a list price and not a sale price and you’ve got two possible reasons for an inflated estimate, plus anything else not on the top of my head. The bottom line is they make their money from producing clicks that increase with higher estimates. They want people to list or refinance. I think if I started browsing those five sites, I’d get links on how to do both. :)
 
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Steel Valley FB

Well-known member
I just looked at my own house, which I’ve honestly never done. It’s 17% inflated on their zestimate and 24% inflated at the high end of my possible range they estimate. Based on my idea anyway, though I’m usually conservative on values. I know what has been remodeled and what needs remodeled, whereas they obviously don’t. The others would probably be similar.
 

Steel Valley FB

Well-known member
Just out of curiosity, I should look up the last 10 properties I’ve appraised for refinances and see the variation. Maybe when I get some free time. Purchase appraisals could skew the results if those sites have programs that automatically incorporate active listings into their estimates. I’d assume they do. You'd have to test that by checking Zillow before you list though and see what the change is.
 

FootballFan1795

Well-known member
Ask away...or what do the kids say online these days? AMA? Ask me anything lol.

How do you value a home (in a good family neighborhood) that is over a century old (built in 1905), with many original features well-preserved (such as built-in china cabinets & other cabinetry, bookcases, columns, bench, pocket door, laundry chute, extra-long window seat with built-in drawers, stained-glass window, plaster walls, hardwood floors, wood molding & trim, claw-foot tub, pedestal sink, large front porch, etc.), but with a newer addition that includes a sunroom, bathroom, kitchen, mudroom, etc. (vinyl-sided 2-story house with 4BRs, full basement, walk-up attic, newer wiring/breaker box/gas forced air/AC/insulation/roof, detached garage, and decent-sized, vinyl-fenced backyard)? Obviously, I’m talking about my house, lol, but I always wondered if the original/non-original hybrid would cause problems with valuation, and therefore, selling. Also, not so sure there’s still a market for this type of home (Millennials :rolleyes:).
 

USA70PP

Well-known member
I think I probably know the answer, but on occasion you'll see "What $300,000 will get you in each state". Does that also hold true for Ohio? What will $300,000 get you in Marion, Delaware, Franklin county etc?
 

Steel Valley FB

Well-known member
How do you value a home (in a good family neighborhood) that is over a century old (built in 1905), with many original features well-preserved (such as built-in china cabinets & other cabinetry, bookcases, columns, bench, pocket door, laundry chute, extra-long window seat with built-in drawers, stained-glass window, plaster walls, hardwood floors, wood molding & trim, claw-foot tub, pedestal sink, large front porch, etc.), but with a newer addition that includes a sunroom, bathroom, kitchen, mudroom, etc. (vinyl-sided 2-story house with 4BRs, full basement, walk-up attic, newer wiring/breaker box/gas forced air/AC/insulation/roof, detached garage, and decent-sized, vinyl-fenced backyard)? Obviously, I’m talking about my house, lol, but I always wondered if the original/non-original hybrid would cause problems with valuation, and therefore, selling. Also, not so sure there’s still a market for this type of home (Millennials :rolleyes:).
Yours is likely what appraisers would call a unique property, or better yet, an atypical property. With your house I would look at recent sales of century homes (over 100 years old) and hope like hell at least one for them, preferably two, had some sort of large addition. In the event that there weren’t any similar sales, I would expand my search criteria, first the distance then the sale date. Underwriters want more recent sales, obviously, and Fannie Mae wants us to use sales within 12 months, but appraising rules, known USPAP or Uniform Standards of Professional Appraisal Practice don’t specify a timeframe when selecting comparable sales. If I had to go back 3 or 4 years and then extract an appreciation adjustment from the overall market sales, then I’m permitted to do so. The further I go back in time, the less likely I would be to get a viable and defendable value estimate and likewise with distance. The very last thing I would do is use newer homes as comparables, but if that’s all I had then that’s what I’d use. There is no exact scientific method to appraising. They say it’s a mix between a science and an art because of the numerous variables in the market. I often turn down atypical properties because I can do two cookie cutter home appraisals in the same time I can do one extremely atypical appraisals.
 
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Steel Valley FB

Well-known member
I think I probably know the answer, but on occasion you'll see "What $300,000 will get you in each state". Does that also hold true for Ohio? What will $300,000 get you in Marion, Delaware, Franklin county etc?
That’s pretty much an unanswerable question without stating a specific market and what type of house you’re looking for. Even then there will be so many different properties that have sold to analyze. What I won’t come up with in this market is a lot of listings. There is an extreme lack of inventory right now and it’s been that way for several years. That makes it a sellers market currently so you’d get less for your dollar. Feel free to PM me with your email address and we can communicate further if you have a specific market you’re interested in. I can pull sales in a given neighborhood and send you the list of sold and active properties. Alert me here if you message me so I don’t miss it. FYI I have sales data for Cental Ohio only.
 

eastisbest

Well-known member
I wish the city valued my house the same as Zillow. City is $30,000 more. Zillow has it at $50K. House was only a bit over $30K in late 90s and nothing about this neighborhood has gone up-hill. Houses don't seem to fly off the market.
 

Steel Valley FB

Well-known member
I wish the city valued my house the same as Zillow. City is $30,000 more. Zillow has it at $50K. House was only a bit over $30K in late 90s and nothing about this neighborhood has gone up-hill. Houses don't seem to fly off the market.
You might be a candidate for being over assessed by the county (not city). I’m assuming you still live in Cincinnati so I can’t pull up the neighborhood sales for you to analyze and rough-estimate a value unless you are tight with a realtor down there I could work with. I wouldn’t be doing your appraisal, but I could tell you if going forward to the Board of Revisions would be worth it. The numbers would have to work out, but a few hundred dollars today could save you a couple hundred for the next several years until they reassess again. My thinking is that Zillow is almost always higher than the county assessment so the county could be way high. PM me anytime, EP.
 

eastisbest

Well-known member
Never lived in Cinci. Toledo. Your thinking EP, I'm EIB. :D I'll look into that revisions thing, thanks. I'm not too far from applying for homestead, so I suppose I better see what that's about too.
 

Steel Valley FB

Well-known member
Never lived in Cinci. Toledo. Your thinking EP, I'm EIB. :D I'll look into that revisions thing, thanks. I'm not too far from applying for homestead, so I suppose I better see what that's about too.
Sorry, yes I was thinking Eastside Purple. Did I mention I’m getting old? :)

Go to your county auditor and search for your address and there should be a link to the BoR. Many auditor sites will have a link right on each property that says Tax Estimator. Go there and you can enter a new value and it will recalculate your new taxes at a given value. Let me know if I can help navigate anything.
 
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cabezadecaballo

Well-known member
How accurate are the prices put forth on Zillow? I live in a fairly nice house with pool in the best part of Tucson. Area has the best schools in the city. My house has an incredible view of the nearby Catalina Mts. Yet according to Zillow my house has appreciated over $100K in two years! No way is my house worth that. So my questions are, do appraisers and buyers rely on Zillow?
You've come a long way, baby....



If you look closely on Zillow's desktop site at the details of how they arrive at a "zestimate", it seems they can only be accurate if a fair amount of similar homes have sold recently.

Nice way to search completed sales, so you can do your own comparisons.
 

Steel Valley FB

Well-known member
From the Zillow website:

To ensure the most accurate Zestimate, report all home updates to your local tax assessor. Unreported additions, updates and remodels aren't reflected in the Zestimate.

Then, expect an increase in your property taxes. My advice is still don’t rely on Zillow and don’t give them any data about your home.
 
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