Home value – Page 5 – LA Loft Blog

Sometimes a homeowner wants to know how much their property is currently worth. When considering the sale of a home, or for many other purposes, a Broker Price Opinion is helpful to know what the market really is for that house, condo or other property. | ORDER

Different real estate valuation products are appropriate for different situations. Real estate professionals are often asked to provide a comparative market analysis before listing a home for sale, often as a free service to the client. Getting a home loan to buy a property requires an appraisal from a license real estate appraiser. Required by most lenders, an official appraisal is typically paid for by the home buyer. But, there are many other situations in which an owner or a financial institution requires a professional estimate of property value, but not an official appraisal. This more affordable written valuation is called a Broker Price Opinion, or BPO.

Some California real estate brokers offer written opinions about the price of real estate without being licensed as appraisers. Mortgage lenders may order a specific type of valuation method for borrowers before the loan is approved.

Broker price opinions are defined by federal law (12 U.S.C. § 3355, enacted as a part of the Dodd-Frank Wall Street Reform and Consumer Protection Act) as an estimate prepared by a real estate broker, agent, or sales person that details the probable selling price of a particular piece of real estate property and provides a varying level of detail about the property’s condition, market, and neighborhood, and information on comparable sales, but does not include an automated valuation model.

The definition in the law is broad. BPOs are not an estimation of a property’s value by a neighbor or long-time resident of the community. The operative term defined in the federal law, however, is “prepared.” Broker price opinions are more than just off-the-cuff “guesstimates” of selling prices — they are carefully prepared analyses. There are two main types of opinions regarding the price of property that are prepared by real estate brokers or agents. A BPO looks at the characteristics of the property itself, and is an opinion on the price that could probably be received if the property were sold in a regular arms-length transaction. The laws in some states do not distinguish broker price opinions from comparative market analyses. A comparative market analysis looks at the prices obtained for comparable real estate in the same area. And the value is based on comparisons with similar properties.

Agents complete BPOs either through a drive-by or internal viewing of the property. A drive-by BPO is more detailed than its name would imply, and involves estimates of a number of things about the property, including the number of rooms, room sizes, and square footage. An internal BPO requires all of the information in a BPO, plus verification of the number of rooms and measurements of the square footage. Photographs of the interior of the property are also required. In most states, “allowing” broker price opinions merely means that the state does not prohibit BPOs. In thirty-eight jurisdictions, there is minimal state regulation of BPOs beyond a distinction that real estate brokers are exempt from the laws requiring licensure as an appraiser. Additionally no training is required beyond the normal educational requirements for a real estate license.

A BPR is different from an appraisal. A BPO is not necessarily performed by a professional state-licensed or certified appraiser. A BPO is typically prepared by a real estate broker, and is another tool that a lender might use to evaluate the collateral for a loan. A BPO, as originally intended, does not comply with USPAP Uniform Standards of Professional Appraisal Practice. BPOs were designed for brokers to assist home buyers and sellers in arriving at a list or purchase price, or purposes other than mortgage financing.

Often taking less than 24 hours, a Broker Price Opinion is cheaper, faster and easier to schedule than a licensed appraisal, and can sometimes include additional information that may not be provided with an appraisal, such as: pros and cons, building report, county assessor record, investment opinion sold properties report and area lenders report. The BPO may be requested for any kind of property, including single family home, condo, multi-family, commercial property or land.

Request a Broker Price Opinion. Fill out the online form:

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Copyright © This free information provided courtesy L.A. Loft Blog with information provided by Corey Chambers, Realty Source Inc, DRE 01889449. We are not associated with the seller, homeowner’s association or developer. For more information, contact 213-880-9910 or visit LALoftBlog.com Licensed in California. All information provided is deemed reliable but is not guaranteed and should be independently verified. Properties subject to prior sale or rental. This is not a solicitation if buyer or seller is already under contract with another broker.

REAL ESTATE NEWS (Los Angeles, CA) — Stagflation indicates both upward and downward pressure on residential real estate property prices, but with inflationary pressures getting the upper hand. While increasing interest rates may cause some home prices to fall due to reduced demand, runaway inflation has already gained a foothold, creating its own reinforcing psychology among the home buyers, sellers, builders, landlords, renters and investors. In addition, governments are adversely affected by economic crashes caused by rising interest rates in several ways: Not only does a falling economy cause the government to lose revenue, and thus to become unable to pay its own debts and obligations, but financially suffering voters tend to expel administrations, causing political losses, high turnover and government volatility. The politicians will continue to lean towards inflation, continuing to call it “temporary,” someone else’s fault, or some may even continue to falsely call inflation “good.” Because inflation involves larger amounts of money, some will continue to try to refer to it as some kind of “wealth”. It’s not. The true nature of price inflation is a destruction of the value of the currency. Inflation makes us about as wealthy as the holders of monopoly money.

FIND OUT HOW MUCH YOUR HOME IS WORTH, FREE ONLINE | CLICK HERE

The median home price in Orange County, California just topped $1 million for the first time. The area now has 45 out of its 83 zip codes averaging seven figures for the average home value. This milestone represents the 15th record high in a two-year, pandemic-era home-buying binge. Statewide, the median price of a home hit another record high of more than $849,000 in March, driven primarily by a surge in the sale of higher-priced homes, according to Realtors Association’s data.

The highest of high home prices are found in the San Francisco Bay Area, where median price in March was $2.28 million in San Mateo County, $2.06 million in San Francisco County, $1.95 million in Santa Clara County and $1.737 million in Marin County. Orange County prices rose 3.5% from February to March, and 22% in a year. Some see a bit of good news for buyers: the high prices have cooled the spending spree. March sales are down 19% from a year ago, according to ABC News.

Mortgage rates are now rising. Will this slow an out-of-control housing market? For the last ten years, extremely low mortgage rates encouraged home buyers to bid up the cost of housing. This has been especially true during the last several years, during the virus hysteria, when rates fell to unheard-of levels, and home prices exploded across Southern California and much of the United States.

Things are changing. Mortgage interest rates are rising at the fastest pace in many years, hitting 5% last week for the first time since 2011, according to Freddie Mac. Just six weeks ago, the average rate for a 30-year fixed mortgage was under 4%. In November, it was below 3%. The rapid rise, on top of soaring prices, has made homeownership suddenly more expensive. The question then becomes: If the average home buyer can afford less, are home prices going to drop?

Several top real estate experts, when asked this question, said that they don’t foresee a substantial price decline unless we encounter a recession. Real estate experts, however, are usually not economists. They are salespeople, often biased towards data that increases the number of transactions. The number of transactions in Downtown Los Angeles has been on the low side for several years. While safer suburban neighborhoods boomed during the virus hysteria, inner city suburban real estate stagnated or fell. The lowest priced lofts at Little Tokyo Lofts in Downtown L.A., for example, declined in price as the average home buyer grew more averse to perceived sketchy adjacent neighborhoods like Skid Row. For Downtown LA, prices began to rebound in September of 2021. Today, home prices in DTLA are surging due to extreme inflationary pressure from a dollar that is losing its value internationally, at home and abroad.

In response to rising interest rates, real estate prices are likely going to continue to climb, but in smaller increments than Southern California’s recent 17% annual home price growth rate.

Economists and other experts pointed to several factors that should largely uphold home values: a shortage of everything, including a low supply of homes for sale; rising incomes due to inflation; falling unemployment as virus hysteria wanes; and a tendency for what some nonsensical opinions have called “homeowner greed,” while what we are really seeing is more appropriately termed “FOMO” Fear Of Missing Out, along with a very real threat and rational fear of runaway inflation. Because home prices and rents react strongly to a falling dollar, real estate provides very strong protection from severe inflation.

In the past, steep increases in mortgage rates have slowed home price spurts. Rising rates will have this effect this time, but the severity of overspending, historic radical Fed policy, delay in initiating rate increases, overall accommodating Fed, bureaucratic deep state that is petrified of stock market crashes; and the atom bomb of dollar destroyers: blockchain cryptocurrencies. Bitcoin, ethereum and other cryptos shall prove to be the unexpected nails in the coffin for the U.S. dollar. Good money chases out bad. Newer, better money destroys old, abused money. The U.S. Dollar is toast, meaning that we’re most likely to eventually experience Weimar Republic / Zimbabwe style of absolute monetary devastation. In other words, a loaf of bread could end up costing not just $10 or $20, but $1,000 or $1 million or more! That is the end result of bureaucratic abuse and overprinting, along with total crushing by newer, better emerging monetary technologies that are independent and immune to government abuse.

Buyers can afford less. This shows up as industry professionals reporting fewer visitors at open houses, fewer multiple offers per home and fewer mortgage applications. Real estate professionals have been reporting cooling.

Most home buyers now agree that interest rates have an effect, a very significant effect. They decrease the number of home buyers, and decrease the amount of home that the average person can buy. While this can certainly slow down inflation, it cannot necessarily stop runaway inflation that has already had too much of a head start, particularly inflation that has other major causes in addition to interest rates that were too low for too long. Turmoil is in the cards. Rising prices, along with crashy sideways spurting markets. The Fed and government fits and stops, panics and printing, waves of back and forth economic uncertainty lie ahead. Welcome to the reality, the impending full bore brunt of stagflation. The good news is that, along with gold, quality stocks, commodities, collectibles and cryptocurrencies, real estate is among the best protections from inflation and economic stagnation.

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