Tag Archives: Home Value

Add Value to Your Home with a Tankless Water Heater

Within the trend of home improvement, one of the changes that has been slow to catch on in North America is the use of tankless water heating systems, also known as on-demand hot water systems. These have been the standard in Europe and Asia for a while, but North Americans haven’t shown the same high adoption rate. This is strange because tankless systems are both more convenient, and more efficient.

You will often pay a high lump sum when putting the tankless heater in and updating the plumbing, but your monthly bills will be significantly less than they were before. This is attributed to not needing to spend money idly heating water. As the name suggests, tankless heaters have no tank, so no water is constantly being heated for potential use. Instead, the heater warms up the water nearly instantaneously.

This solves three problems. First, you can now get as much hot water as you want without exhausting your hot water tank. Second, now that you have no 60 litre tank in your basement, there is a ton more space available. Finally, you never have to worry about your hot water tanking blowing out and flooding your basement, because your tankless water heater doesn’t store any water.

There are a few downsides to tankless water heaters and it is good to understand them before installing one. A tankless heater can only provide a limited amount of hot water at a time. The throughput is limited, but unlike a water tank, it can consistently supply that hot water rather than needing hours to heat more up. Another issue with water heaters is the energy requirement. The instantaneous energy requirement can be up to four times more demanding than a water tank, so you should ensure this upgrade is possible before undergoing the change.

The cost of a tankless water heater is generally around $2,000-$4,000, but their lifespan can be up to 20 years, which means you get a significant amount of extra value out of it. As always, make sure to get a few quotes for the switch to tankless before you say yes, as this will save you lots of money in the long-run.

Tankless water heaters are available in a variety of fuel sources, electric, natural gas, and propane gas. Your choice will depend on costs of the unit, cost of the fuel, availability of fuel service, and the location in your home where the unit will be placed.

The process of replacing the water tank can take as little as a day, but first look into any other retrofits that might be necessary to do before you install the heater. Installing the tank is quite simple, but you will want to hire a professional who has experience with tankless water heaters, not just any plumber.

Furnace and boiler technology has evolved significantly over the last twenty years, but water tank technology hasn’t. If you don’t feel like making the change today because you are afraid of the high expenses associated with the switch, just wait until your water heater is up for a change and replace it with a tankless heater instead. The monthly amount you’ll save will quickly pay you back and you won’t regret the convenience factor of always being able to get warm water.

Is it a Cost or an Investment to have an Appraisal done on your home?

 A Professional Appraisal: Cost Vs Investment:

The cost of a typical professional residential real estate appraisal varies from area to area. Currently, the range is $300 to $650 for a full market value appraisal. A full market value appraisal with pre-market suggested listing price range could be an additional $50 to $100, depending again on the area that the subject property is located in.

The cost of an appraisal may be an expense and may be deductible from the proceeds in some tax areas and for some properties, and this will reduce the net cost of the appraisal. This is an area which each individual will need to consult their respective tax adviser on.

For instances where a property may have been under-priced or over-priced and the net selling price is higher than the net cost of the appraisal, one might say that an appraisal is a good investment. Where market forces or a person’s particular circumstances govern a lower price than fair market value, an appraisal may be a poor investment. Generally though, a professional opinion of value will be more beneficial to a property owner than an individual’s own limited experience can offer.

Using a Home Appraisal as a Selling & Marketing Aid

A Home Appraisal as a Selling & Marketing Aid

A full real estate appraisal done by a professional may be an essential aid in marketing a property. Before a property is listed, whether For-Sale-By-Owner or through a Realtor, is the best time to get a Market Value appraisal with a listing price analysis. A pre-marketing appraisal can assist in preventing over-pricing or under-pricing a property, thus enabling an owner to obtain their best price.

Once the subject property has been listed, the pre-marketing appraisal may be used to inform prospective purchasers and/or Realtors what the current market value of the subject property is, thus possibly reducing the potential for large scale negotiating. In other words, if an appraisal is made available to prospective purchasers and/or Realtors, the likelihood of receiving a sale at or near the list price is greatly enhanced. Prospective purchasers and/or Realtors will have more confidence in the value of the subject property.

Once a purchase contract has been agreed to, it may be possible to have the appraiser provide a letter of transmittal to the purchaser’s lender so that the purchaser may use the appraisal, thus saving the purchaser time and money in getting his/her mortgage approved.

The Home Appraisal: Expertise in Market Research

 The Professional Appraisal: Expertise in Researching Market:

Each and every day professional appraisers are gathering information from many sources to include in the appraisal reports they write. One of the first sources to check is the MLS. This search brings up all the current listings, expired listings, cancelled listings, withdrawn listings, all the sales over the past 5, 10, 15, or 20 years, depending on the archive facilities of the local MLS board. Looking at old MLS data and information can be a valuable resource for confirming: age, size, and details of the property; improvements to a property; and/or missing data from the current listing, if there is one. Next, assessment and/or municipal records are searched for the maps, site plans, site maps, legal description, site size, site configuration, zoning, and/or conforming/non-conforming usages. Next, the property is searched on the internet to determine if there are any adverse factors that may pop-up, such as: the property is listed For-Sale-By-Owner, the property has been a grow-op (marijuana growing location), damaged by fire, flood or other means, been the target of illegal activity, etc. Internet browser maps can focus in on what is in the subject area and what types of properties are adjacent, near, or across the street from the subject property. In some areas, street eye-level images are available to get a good idea of the surroundings. In some centers, appraisers routinely do a title search on the subject property and note any irregularities on their appraisal report.

Once the subject property has been adequately researched, the subject property inspected or viewed, many of the above mentioned research sources are utilized in checking out the comparable sales, before the appraisal report is completed and delivered to the client.

You Need an Independent & Objective Home Appraisal

A Professional Appraisal: Your Independent & Objective Opinion

Clients hire professional appraisers for their independent & objective opinions, not to rubber-stamp predetermined sales prices, lending values, assessment values, cost estimates by builders, reconstruction cost for damaged properties, or market values for third party uses such as the income tax department or financial projections. As mentioned in the previous section, a professional appraiser treasures his/her credibility and likewise his/her right to have an independent and objective opinion regarding the value of the particular property that he/she is appraising. This opinion may or may not confirm another party’s estimate of value, such as: a sales price, a lender’s indicated loan value, an assessment value, a cost estimate by a builder, or a price on a private or MLS listing. Where another person’s estimate of value accurately reflects current market value, the two should be in alignment.

A Home Appraisal Gives You Reliability & Verifiability on Value

A Professional Appraisal: Your Assurance of Reliability & Verifiability on Value of Your Property

Professional real estate fee appraisers are educated in many aspects of property valuation and real estate markets and one of the main focuses of the appraisal profession is reliability and verifiability. Essentially the data and information which an appraiser uses must be reliable and verifiable. The most common source of data and information which residential real estate appraisers use is the Multiple Listing Service (MLS). The MLS is used because the data and information is on an open market system, open for all interested parties to see and use. The Realtors who provide the MLS data and information are legally responsible to the users of that data and information, and are expected to originate or confirm the data and information to the best of their professional abilities. Some data and information is a matter of opinion and may be open to interpretation, however, for the most part MLS data and information may be relied upon faithfully by an appraiser. Another source of data and information is the own appraiser’s files on comparable properties. This data and information is prized by the appraiser, for he/she has personally verified the details at some past point in time. There is the possibility that a comparable property on file may have had renovations, upgrading, or may have even suffered damage from fire or flood, hence there is the possibility that the details may not be totally reliable.

Assessment records, Land Titles Office records, For-Sale-By-Owners, project developers, house builders, and exclusive listings are some other sources of data and information that can be utilized for comparable sales, however the details on these types of sales are often not complete and may require further verification by the appraiser when utilizing them in an appraisal report. Instances where the subject property has unique features, an isolated location, and/or where there are a limited number of MLS sales, these sources are often very helpful. The professional appraiser makes note of these situations in his/her appraisal report so that the appraisal report reader is fully informed and can adjust his/her expectations of the report.

 

Do Home Appraisals Give Historic Present or Future Values?

A Professional Appraisal: Do You Need an Historic, Present, or Future Value?

Real estate fee appraisers rely on historic costs, historic comparable sales, and historic or present income to base their estimated values for residential properties. Other types of appraisals (i.e. for commercial, industrial, multi-family residential properties) may include future values, which are generally based on some method of expanding a projected future income stream from the subject property to arrive at a Future Value as of a certain date in time. A projected future income stream from a property may also be discounted using various formulas to arrive a Present Value of the income stream, which would be reconciled with other approaches to value to arrive at an Estimated Value for an income producing property.

The type of future value that many people think of is the value that their property will be worth in the future, i.e. 6 months, 2 years, 10 years. This is generally a projection of a short-range trend line; showing graphs of historic Multiple Listing Services (MLS) average sales prices that are popularized in the media. If one looks at the long-range trend line picture, one will see a number of corrections in which prices fall for periods of time. If one smooths out the overall long-range trend line it will be seen as rising over the past century, hence one can conclude that residential real estate appears to be a good investment. The only caveat is that one never quite knows when a correction in the real estate market will happen, so that accurately projecting a future value of an individual residence becomes a guessing game at best. In addition to never really knowing when a correction will happen, the depth of the correction (i.e. the percentage drop in market values) or how long it will be before the market recovers to previous levels (i.e. 6 months or 6 years) are also unknown factors.

When pricing a house for sale, owners often include a certain amount of negotiating room in the asking price, thus making the asking price somewhat higher than current market values. As a particular real estate sector becomes more in demand, prices rise because owners receive offers that are closer to their asking prices. As time goes on, these small increases amount to moving the real estate market higher and higher. This is also, in effect, the projection of future values. This analysis can also be done by an appraiser for an individual residential property by including an addendum section in an appraisal, which adjusts competing current listing prices to reflect a listing price for the subject property. This can give an indicated estimated listing price for a particular property, however this is not an appraised value as such, but an educated projection of what is reasonable to list a property for in order to obtain the current market value based on the standard appraisal practices according to USPAP (Uniform Standards of Professional Appraisal Practice) or CUSPAP (Canadian Uniform Standards of Professional Appraisal Practice) standards.

An Introduction to Residential Appraisals

 

The Professional Appraisal

The intent of the following articles is to focus on the mechanics of establishing an accurate value and price on an individual residential property. We will look at the roles that a professional appraisal, a free market evaluation from a Realtor, and our own observations play in the process of getting the best price for the individual residential property. Briefly we will look at the following topics:

Historic Vs Future Value:
Reliability & Verifability:
Credibility:
Independent & Objective Opinion:
Expertise in Researching Market
Selling & Marketing Aid
Cost Vs Investment