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NEWS PROVIDED BY
Appraisal Institute
January 21, 2025, 19:00 GMT

CHICAGO, IL, UNITED STATES, January 21, 2025 /EINPresswire.com/

In the wake of recent natural disasters, including the devastating wildfires in Los Angeles and hurricanes across the southeastern United States, the Appraisal Institute urges property owners and businesses to seek expert advice before accepting direct cash buyouts from insurance companies to settle claims. Understanding the complexities of insurance settlements requires a clear assessment of property value, especially during such challenging times.

Insurance companies often offer cash settlements to expedite claims after disasters. While these offers may seem straightforward, they may not fully reflect the real value of the property or its recovery potential. The Appraisal Institute emphasizes the importance of working with highly trained and objective real estate appraisers, including SRA-designated professionals for residential properties and MAI-designated professionals for businesses and commercial properties.

In a statement, Paula Konikoff, JD, MAI, AI-GRS, President of the Appraisal Institute, underscored the value of consulting designated appraisers:

“Natural disasters create significant challenges for both property owners and businesses, particularly when it comes to navigating insurance settlements. Consulting with SRA- or MAI-designated appraisers provides access to highly qualified professionals who can deliver unbiased, accurate valuations to help owners make informed decisions. These insights are critical to ensuring that settlements align with the true value of the property, protecting financial interests during recovery and rebuilding.”

There is a great deal of information about real estate in the marketplace, including automated valuations and broker price opinions. Designated real estate appraisers are specifically trained to support value opinions with thorough research and analysis and to defend those opinions with credibility, independence and the highest professional ethics.

The Appraisal Institute encourages both residential and commercial property owners to act thoughtfully and seek professional advice. Partnering with a designated appraiser helps ensure that insurance offers are properly evaluated, supporting property owners in making well-informed decisions during this critical time.

By: Bill Garber
Appraisal Institute

The March 2024 Fannie Mae Appraiser Update covers various important topics, including zoning changes, hybrid appraisals, subjective language, and recent updates to the Selling Guide. Fannie Mae aims to support appraisers in staying successful and welcomes feedback for future newsletters. One significant update is the inclusion of condos as eligible properties for value acceptance and property data, with guidelines provided for hybrid appraisals. Additionally, there's a focus on eliminating prohibited or subjective appraisal language, with positive progress reported in reducing occurrences of such language. The newsletter also addresses the impact of rezoning on appraisers and provides guidance on determining the highest and best use of properties. Lastly, it emphasizes the importance of cybersecurity and provides tips to safeguard appraisal credentials.

In the February 2024 update to the Selling Guide, Fannie Mae made condos eligible for value acceptance and property data. If there are changes to the loan after property data collection, Fannie Mae will accept a hybrid appraisal based on that data. To include condos, they introduced the Individual Condominium Unit Appraisal Report (Hybrid).

While detached condos can still use traditional appraisals, all condos (attached or detached) needing hybrid appraisals must use the Individual Condominium Unit Appraisal Report (Hybrid), according to Selling Guide B4-1.2-03.

​Source: Fannie Mae

In "The Attack on Single-Family Zoning," Richard Hagar, SRA, discusses the changing landscape of residential zoning laws and their potential impact on lending, property values, and appraisal practices. He begins by highlighting the historical prevalence of single-family homes in the U.S. and the origins of zoning laws in response to urbanization and population growth.

Hagar explains that zoning laws were enacted to separate incompatible land uses and maintain the integrity and value of residential properties. However, recent legislative trends, exemplified by recent zoning laws in Washington State, have aimed to override local zoning decisions and mandate multi-family zoning in single-family neighborhoods.

The author argues that such laws disregard the preferences of the majority of homeowners and threaten the character and value of single-family neighborhoods. He predicts adverse effects on property values, increased lending costs, and challenges for appraisers in valuing properties in multi-family zones.

Hagar proposes solutions to address the potential consequences of these zoning changes, including educating lawmakers, empowering local communities in zoning decisions, allocating land for multi-family development in appropriate areas, reducing government fees and bureaucratic delays, and advocating for more comprehensive appraiser training.

Overall, Hagar's article warns of the far-reaching implications of altering single-family zoning laws and calls for proactive measures to safeguard homeowners and preserve the integrity of residential communities.

The Appraisal Institute, the largest professional association of real estate appraisers in the United States, is actively encouraging recent graduates and those aspiring to become appraisers to consider a career in the valuation profession. The institute offers various opportunities to support aspiring appraisers on their journey to success.

Key initiatives and services provided by the Appraisal Institute include:

1. **Appraiser Diversity Initiative:** Collaborating with Fannie Mae, Freddie Mac, and the National Urban League, this initiative aims to increase diversity in the profession. Scholarships covering entry-level courses are offered, along with advisors to guide students through education and credentialing.

2. **Minorities and Women Course Scholarship Program:** The Appraisal Institute Education and Relief Foundation provides scholarships to minorities and women pursuing courses related to appraisals.

3. **Pathway to Success Grant:** The Appraisal Institute received the Pathway to Success Grant from The Appraisal Foundation's Board of Trustees. This grant supports the development of a Practical Applications of Real Estate Appraisal program, offering an alternative pathway for aspiring appraisers to gain experience hours required for certification.

4. **Student Affiliate Program:** Aspiring appraisers and students can join the Appraisal Institute as Student Affiliates. This program is open to high school juniors and seniors, as well as college and university students. It offers an opportunity to learn about the profession without a fee.

The institute emphasizes the benefits of a career in real estate valuation, including flexible schedules, engaging assignments, and a strong earning potential. Appraisers play a vital role in the real estate industry by providing credible value opinions, consulting, and risk mitigation for financing, litigation, estate planning, and various property transactions.

Appraisers also engage in tasks such as estate planning, tax assessment review, eminent domain advice, dispute resolution, feasibility studies, expert witness testimony, market trend analysis, investment analysis, and more. Whether fresh out of college or considering a career change, the Appraisal Institute offers tools and resources to excel in the appraisal profession.

For those interested in learning more about a career in real estate appraisal, the Appraisal Institute's website provides further information.  

https://www.appraisalinstitute.org/become-appraiser/

The Appraisal Institute has shared insights on simplifying the property tax appeal process for U.S. homeowners as they receive their property tax bills. The organization recommends working with their Designated Members to understand the local appeals process and explore potential options.
Appraisal Institute President Craig Steinley emphasizes the significance of hiring a qualified appraiser who adheres to industry standards and ethical codes. He explains that the ideal scenario is for a property's assessed value to align with its market value, as intended by property assessment laws. Steinley notes that tax assessors, typically elected officials, have no incentive to deliberately inflate assessed values and subsequently increase property taxes.
Different municipalities might have varying stages of tax appeals. Steinley advises homeowners to consult local appraisers who possess the expertise and knowledge required to navigate this process. He highlights that if errors occur in the calculation of property tax bills by local governments, homeowners have the right to appeal the assessment.
Collaboration between appraisers, property tax consultants, and specialized attorneys is common in tax appeal matters. This collaboration could significantly enhance the likelihood of a successful appeal for property owners.

The Appraisal Institute, the leading professional association of real estate appraisers, suggests that homeowners focus on simple ways to potentially enhance their property's value. Home remodeling projects, when done correctly, can add value to homes, especially amid rising property values across the country. A survey by Cinch Home Services found that 62% of owners aim to increase their home's value through renovations.

For optimal returns, homeowners might consider delaying significant renovations if uncertain about how long they will stay in their property. Longer ownership duration often leads to a greater chance of a return on investment. Still, even small renovations can significantly impact a home's value.

Key strategies for enhancing value include:

1. **Boosting Curb Appeal:** The exterior's visual appeal is crucial for making a positive first impression on potential buyers. Upgrading exterior features such as paint and garage doors can yield substantial returns. Basic yard care, landscaping, and enhancing outdoor areas like pools and decks also contribute.

2. **Upgrading Bathrooms:** Modernizing bathrooms is a popular trend. Luxurious additions like open showers, double-sink vanities, extra storage space, underfloor heating, water-saving features, and creative lighting can make daily routines more enjoyable and add value to the home.

3. **Bringing Outdoors Indoors:** The trend of integrating outdoor elements indoors continues to gain momentum. This includes installing floor-to-ceiling windows to maximize natural light, creating wellness spaces with soothing colors and plants, incorporating air purifiers, and adding indoor greenery.

4. **Prioritizing Sustainability and Energy Efficiency:** With increasing concerns about energy costs, homeowners are leaning towards eco-friendly improvements. Energy-efficient windows and doors, sustainable building materials like bamboo flooring, solar panel integration, and digital thermostats are some of the sought-after trends.

Professional appraisers offer homeowners the guidance needed to make informed renovation decisions. The key is to strike a balance between smart financial choices and improvements that enhance the quality of life. Contacting an appraiser can provide insights into how specific renovations might affect home values.

In the competitive real estate market, well-planned renovations guided by appraisers' expertise can give homeowners the confidence to make impactful decisions.

​The "More Homes on the Market Act," introduced by Rep. Jimmy Panetta, a Democrat from California, and Republican Mike Kelly of Pennsylvania, aims to encourage homeowners to sell their properties by increasing the sums that can be excluded from their taxes upon selling a home. The bill proposes doubling the tax exclusion for profits from home sales: individually filing homeowners could exclude $500,000, and joint income-tax filers up to $1 million. Currently, the exclusion is $250,000 for single filers and $500,000 for joint filers, set in 1997 and not adjusted for inflation.

Panetta's goal is to address the dilemma faced by homeowners with valuable properties: whether to sell their homes and face significant tax burdens or keep them, contributing to the scarcity of housing listings. Many homeowners in costly housing markets, such as parts of California, have experienced substantial increases in property values over the years.

The National Association of Realtors (NAR) anticipates that adjusting the capital gains exclusion for inflation since 1997 and raising the exclusion to $450,000 for single filers and $900,000 for joint filers could potentially lead to an increase in housing supply by around 159,000 to 344,000 homes nationwide, easing the inventory crunch. This change could have a more noticeable impact in expensive markets like San Francisco and New York City.

While building new homes can take time, increasing the capital gains tax exclusion could provide an immediate solution to the housing supply challenge, according to Lawrence Yun, the chief economist at NAR. The proposed legislation addresses the need for a more attractive environment for homeowners to sell, potentially stimulating the real estate market, particularly in high-cost areas.

The Appraisal Institute, the nation’s largest professional association of real estate appraisers, today encouraged homeowners to exercise good judgment when deciding which home improvement projects to take on, saying that not all renovations enhance property values.

“It’s very important that renovations stay within, but not exceed, community norms,” said Appraisal Institute President Ken P. Wilson, MAI, SRA. “If they don’t match what’s standard in a community, owners could have difficulty recouping their investment when selling the property.”

According to Remodeling magazine’s most recent Cost vs. Value report, some of the projects with the highest expected return on investment are entry door replacement (steel), deck addition (wood), garage door replacement, attic bedroom and minor kitchen remodel. Other renovations with high expected pay-offs include window replacement (wood and vinyl), siding replacement (vinyl) and basement remodel.

Wilson advised homeowners that it may be best to hold off on major renovations if a homeowner isn’t sure how long they will be in the home. The longer a homeowner stays in a property, the greater the opportunity for a return on investment, he said.

“Consumers should be aware that cost does not necessarily equal value,” he added.

For an unbiased analysis of what their home would be worth both before and after an improvement project, a homeowner can work with a professional real estate appraiser – such as a Designated member of the Appraisal Institute – to conduct a feasibility study.

During a feasibility study, the appraiser will analyze the homeowner’s property, weigh the cost of rehabilitation and provide an estimate of the property's value before and after the improvement.

Some green and energy-efficient renovations, such as adding Energy Star appliances and extra insulation, are likely to pay the homeowner back in lowered utility bills relatively quickly. Lower utility costs also are a draw for potential homebuyers. When appraising a home, the appraiser evaluates local supply and demand for green and energy-efficient properties and features.

The Appraisal Institute offers a free, informative brochuretitled “Remodeling & Rehabbing,” which provides consumers with valuable advice on home remodeling.