Cell: 604-855-2521 |

When it comes to assessing a home's value, homeowners tend to be an optimistic bunch.  Appraisers are a different story. They have to predict a realistic value for your home that the bank can use to extend credit to a borrower -- and that number can make or break your sale or refinance.

Appraisers say the following five areas are where homeowners often misjudge the worth of their house.

1. The Outside:
The appraiser sees: Overgrown bushes and chipped paint.  What he does: Slices as much as 3% off the value of an average-size home. Why: Curb appeal is important. And an unkempt yard is a sign that there may be other issues.  A good-looking lawn and bushes imply that you also take care of the internal systems in the house. Moreover, the more meticulous your neighbors are about grooming, the more your appraiser will downgrade the value of your home. If a lot of the nearby properties are professionally maintained, the one that sticks out like a sore thumb will get a harder adjustment than in a subdivision where there's more variation.

2. Basic systems:
The appraiser sees: A brand-new roof.  What he does: Nothing.
Why: Just as a knee replacement won't make you look 20 years younger, a new roof, furnace, or boiler isn't considered an  improvement to your home. That said, if your roof is in disrepair, replace it: Signs of leaks or discoloration can knock a significant amount off the home's value. When people buy a home, they expect the roof to be working, So while a new one isn't an added feature, it will help your chances of a sale.

3. The basement:
The appraiser sees: A recently finished basement with a half bath.  What he does: Adds about 2% to the value of the home.  Why: Yes, your finished basement adds value -- but don't expect it to count like first-floor space. The addition of a bedroom and quarter bath on the ground floor could increase your home's value by up to 20%, especially if you've got only one other bathroom.

4. The market:
The appraiser hears: Two nearby homes just went into contract above their asking prices.  What he does: Nothing.  Why: While a Realtor might pump up a home's asking price based on the sense that the market is "hot," by and large, appraisers are bound by the data of recent comparable sales.

5. A remodel:
The appraiser sees: An expensive, custom-made, built-in entertainment center.  What he does: Makes a negative adjustment to the valuation.  Why: "Cost doesn't equal value,".  Renovations that are at all trendy -- or not in keeping with the historical period of the home -- will be assessed at the cost of ripping them out. Timeless improvements, on the other hand, such as a deep sink or new wooden cabinets in the kitchen, will add value. So if you're thinking of remodeling, ask a local real estate agent to tell you what's on the wish list of today's buyers.

Sincerely,
Tibor Bogdan

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What is a pre-sale?

Example scenario: When the developer intends to build an apartment building and applies for financing, the bank will grant financing under certain conditions. One of them will likely be a certain percentage of pre-sales the developer will need to secure before receiving the funds.
It is common practice for a developer to approach several real estate investors and offer them an opportunity to purchase units of the non-existent building at a discounted price, and on good terms.

Once the number of pre-sales is accomplished, the developer goes ahead with the construction, which will likely take two years or longer to complete. During construction, their marketing team offers the remainder of the units for sale at market value to the public.

If you are a RE investor, you know that it is preferable to be buying at the pre-sale prices, not market value prices.

The question is, how do you get the invitation to buy a pre-sale?
In the past many years, investors have made substantial income by buying at wholesale prices and selling at retail prices even before they needed to complete their purchase. I saw many of them lining up and sometimes even camping overnight in front of the sales center to get a chance to buy at lower prices, but not everyone was lucky enough. You needed to be well-connected to get an opportunity, and you had to act fast.

Today is a bit of a different story. Several projects in the Lower Mainland and Fraser Valley offer really good prices and incentives to secure a unit now and complete the purchase two or three years later. The list of incentives varies from one project to the next. Besides attractive prices, you can get low deposit amounts (5-15%), low or no assignment fees, free updates, a mortgage rate buy-down program, extra parking and more.

A month ago, I helped a few of my clients purchase a presale in Surrey that sold out in 2 days, and I know of another good developer that will be offering a few units for sale as well.

If you would like to know more about these opportunities, I would encourage you to call or email me, and I’ll be happy to send you details on those projects.
 
Kind regards,
 
Tibor Bogdan
Century 21 Creekside Realty Ltd.
45428 Luckakuck Way #190, Chilliwack, BC V2R 3S9
cell: 604-855-2521
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