Once the appraiser has applied the three approaches to the appraisal of your Virginia Beach real estate, he/she must decide which of them is the most reliable and most closely follows the actions of the market. For residential properties, the Sales Comparison Analysis is typically the most reliable. For commercial or industrial properties, all three techniques (or portions of one or more) may be reliable. The appraiser reconciles the various aspects of each technique into what he or she believes produces a credible and supportable opinion of value. The result is the Final Value Estimate, which, depending on the needs of the client, may be expressed as a single number or a range of value.

What If It’s Low?

If the appraisal of your Virginia Beach real estate comes in low, that doesn’t necessarily mean that you can’t complete the transaction. Your options to rectify the situation included the following:

1. You can make up the difference in cash.
2. The seller can lower the price.
3. The seller can carry a second mortgage for the difference.
4. You can order a second appraisal
5. You can supply a list of comparable sales and ask for a review of the appraisal.

What Does It Include?

Under the Equal Credit Opportunity Act, your lender must furnish you with a copy of the appraisal of your Virginia Beach real estate if you request one in writing. Appraisals are very detailed reports, but they should include the following:

• Details about the subject property, along with side-by-side comparisons of three similar properties.

• An evaluation of the overall real estate market in the area.

• Statements about issues the appraiser feels are harmful to the property’s value, such as poor access to the property.

• An estimate of the average sales time for the property.

• What type of area the home is in (a development, stand alone acreage, etc.).

Do remember that an appraisal of your Virginia Beach real estate is not a home inspection and cannot be considered a guarantee that the property is in good condition. Appraisers make notes about obvious problems, but they do not perform tasks done by certified home inspectors.

Appraising Your Virginia Beach Real Estate, Part I

Appraisers are experienced and knowledgeable professionals whom are licensed by the state to estimate real estate values. They must follow rules set forth in the Uniform Standards of Professional Appraisal Practice (USPAP). Once the appraiser has determined the highest and best use of the Virginia Beach real estate, i.e. the most profitable utilization of the property, he/she will then go about estimating the home’s market value through the use of three basic approaches.

The Cost Approach

The Cost Approach: a set of procedures through which a value indication is derived by estimating the current cost to construct a reproduction of the existing structure, deducting the accrued depreciation and adding the estimated land value. The principle of substitution is the basis of the cost approach, in that no rational person will pay more for a property than the amount for which he can obtain, by purchase of a site and construction of a building, with undue delay, a property of equal desirability and utility. Appraisers typically make use of published cost figures when calculating the cost to construct a building. These sources of data are available online and in printed form. Land value is determined by a comparison of the subject site with other similar sites that have recently sold.

The Sales Comparison Analysis

While cost and income considerations are important, the Sales Comparison Analysis is regard as the industry standard for residential properties. Appraisers get to know the neighborhoods in which they work. To assure that any effects (positive or negative) of its location will be reflected in the sales comparison analysis, the appraiser should select comparable sales from within the same neighborhood whenever possible. If this is not possible, the appraiser may need to make “neighborhood” or “location” adjustments for any sales that are not subject to this same neighborhood characteristic.

The same is true of other aspects of your Virginia Beach real estate, such as the size, quality and features of the buildings. Differences that the market reacts to are adjusted in the comparable sales to reflect what is present in the “subject” property that is being appraised. If a sold home features a fireplace and the subject does not have one, but the market considers a fireplace to be important, the appraiser make a downward adjustment to the sale price of the comparable sold home because it did have one and the property being appraised does not. The reverse is true when the home being appraised has a feature that other homes that have sold do not have. The basic question is what features are present in a property that buyers are willing to pay extra to get, or will pay less if it they are not there? When differences exist, the appraiser must determine how much a typical buyer will add or deduct for it.

The Income Approach

This technique is typically used in appraising income-producing properties. It is a technique whereby the gross or net income of an income producing property is capitalized at a rate which provides a return of interest on the money invested and a recapture of the capital investment in the improvement over a reasonable term of the investment. Capitalization is accomplished for simple residential properties such as rented homes or duplexes by the use of a Gross Rent Multiplier. This involves multiplying the total monthly rent of a property times a number (GRM) found by dividing the sale prices of similar properties by their monthly rents. Commercial and industrial properties involve more complex formulas to determine their value in the income approach, such as cash flow analysis.

What’s your Virginia Beach real estate worth?

A credit score is a number that helps lenders predict how likely you are to make your payments on time. This score affects your ability to obtain credit and helps determine what you pay for credit cards, auto loans, and mortgages on Virginia Beach real estate. Even your insurance rate is related to your score. The higher your score, often referred to as a FICO score, the more apt you are to be approved for and pay a lower interest rate on new loans.

What do the numbers mean?

FICO scores range from 300 to 850, with most people scoring in the 600s and 700s, and are generally rated from excellent to very bad.

• Above 800 is considered excellent. This rating reflects that fact that you pay bills on time, have a strong credit history, and have not filed for bankruptcy. You use your credit responsibly.

• Between 750 and 800 falls into the very good category. You are considered a very low risk because of your history of paying bills on time and acting responsibly.

• Between 700 and 750 puts you in the low risk range. You my have missed some payments in the past, but you current record is good. You do not have an excessive amount of credit card debt.

• Between 650 and 700, or fair, means you are a moderate risk. Your credit history may include older negative items, too many recent applications for new credit, or a higher than normal credit card debt.
  

• Between 600 and 650 is a bad score, and you are deemed a high risk for purchasing Virginia Beach real estate. Your score most likely reflects high credit card debt, late payments, collections, or bankruptcy, and you may well be turned down for new credit.

• Below 600 is considered very bad, and you are viewed as a very high credit risk. If you are approved at all, it will be at a much high interest rate–or you may even need a cosigner or a very large down payment in order to secure a loan.

Because you have not yet established a credit history due to lack of credit cards and/or loans, you may have no credit score. Opening a new credit card account and using it responsibly for a few months should alleviate this problem.

What makes up the credit score?

Your payment history comprises 35% of the score, with the amount of debt you have affects about 30%. 15% of the score is derived from the length of your credit history, with 10% resulting from recent new credit applications. Other factors such a s a variety of credit types make up the final 10%.

How can you improve your score?

• Use you credit cards to establish a positive and consistent pattern of payment.

• Check your credit report for inaccuracies. This is a common problem, so look for and report misinformation.

• Have a variety of debt. In addition to a mortgage on your Virginia Beach real estate, add auto loans and credit cards to the mix. It is important to demonstrate good money management in more than one area.

The three major credit reporting agencies are Equifax, Experian, and Transunion. You are entitled to one free credit report a year from each of the three.

REQUIREMENTS: All real estate brokers and sales agents must be licensed by their state. Although the rules and regulations of individual states vary, most require educational courses, a written examination, and license renewal every 1 or 2 years. Usually between 30 and 90 hours of formal coursework are required in topics such as real estate principles, contracts, and ethics to ensure that the agent has a thorough knowledge of the fundamentals and legal aspects of the field. Many states also have a continuing education requirement. In addition, many agents are members of the National Association of Realtors, an organization designed to provide an exchange of ideas to improve the industry as needed in order to protect the consumer and provide quality service.

SERVICES PROVIDED: A good agent wears many hats and is knowledgeable about many aspects of real estate. An agent handling your Virginia Beach real estate business should:

• be familiar with your target area

• represent a buyer or seller in the purchase or sale of real estate

• search for suitable buyers and/or properties

• assist in procuring financing for your Virginia Beach real estate
  

• examine comparable sales to determine fair market value

• ensure that all terms of the contract are met

QUALITIES TO LOOK FOR: You will want someone who:

• is organized

• is knowledgeable about the business

• is confident in his abilities

• is skilled in negotiations, contracts, and financing

• acts in your best interest

• is ethical and trustworthy

• maintains confidentiality

• is open in disclosing pertinent facts

HOW THE AGENT IS PAID: Since all agents work with a broker, they are paid a portion of the sales commission (commonly paid by the seller). Percentage divisions of the commission vary, but often office costs, such as advertising, are deducted from the agreed upon amount. Neither the buyer nor the seller pays the agent directly.

It is important that you choose a real estate agent wisely and that you establish and maintain a good working relationship with him/her. Carefully check credentials, ask about services provided, and determine his familiarity and success in the area before signing any agreement.

So what does this mean for you? If you purchased your Virginia Beach real estate by the April 30^th, you now have until September 30^th, 2010, to close on your property. (Note: the new legislation applies only to those who did so. The purchase deadline was not extended.) Other than date changes, the terms of the original program still apply, allowing tax credits of up to $8000 for first-time buyers and $6500 for repeat buyers.

Included in the current bill are special provisions for members of the U.S. military forces, the foreign service, and the intelligence community. For those who fall into these categories and have been ordered on an extended (90 days or more between after December 31, 2008, and before May 1, 2010) tour outside the United States, the new extension allows for a binding contract to be in place on or before April 30, 2011, and a closing to take place on or before June 30, 2011. In addition, a person who is forced to return to the U.S. for medical reasons before completing the 90 day tour may qualify for a one year extension.

What do you need to do to claim the credit for your Virginia Beach real estate purchase on your taxes?

• If your 2009 return has not yet been filed, claim it on Form 1040 for tax-year 2009. While you cannot file this return electronically, you can still use IRS Free File to prepare and print it. When you send it in, you must attach special documentation and IRS Form 5405.

• If you have already filed for 2009, claim the tax credit on an amended return using Form 1040X. Remember to check the above site for specific documents to include with your new return.

You may also wait and claim the credit on your 2010 tax return.

A home inspection is of primary importance because it allows you to obtain an unbiased professional assessment of all the components of the property. It is a step necessary for you to decide if you will stay with your original offer, renegotiate based on documented issues and needed repairs, or back away from the purchase of that piece of  Virginia Beach real estate altogether.

Selecting a qualified inspector is vital. Your realtor can provide you with the names of reputable firms, or you can go online to research services offered and credentials. Specific information you should know about the inspector and the inspection process included the following:

1. Credentials and background: Is he/she licensed in your state? Is he affiliated with any respected organizations such as the American Society of Home Inspectors? Membership in these groups requires that inspectors follow strict guidelines about ethics and continuing education. Be sure to inquire about experience and training. A construction-based background is a plus, as is attending a college with an emphasis on construction or attending a home inspection school.

2. Fees: Although you don’t want to spend money unnecessarily, this is not a place to scrimp. Your house purchase is a very large investment, and you need to know as much as you can about it. Do remember that money spent on a quality inspection now will be returned to you by avoiding unexpected costly repairs in the future.  The price of an average inspection varies depending on the age, size, and condition of the house. Some inspectors base their fees on the list price of the Virginia Beach real estate. Get estimates from all you contact, but don’t assume that the lowest priced is the best choice for you.

3. Type of report: Some inspectors use computer generated onsite reporting, some a handwritten checklist, and others a computer generated report you won’t receive for few days. By and large, the last option is in your best interests since it gives the inspector time to review his findings, look up any questions he may have, and send you a detailed, descriptive report. He should also be able to provide you with pictures of the problem areas. Feel free to ask him for a sample report.

4. The actual inspection: Make sure that you will be allowed to accompany the inspector and ask questions as he checks out the house and grounds. This is a good time for you to become familiar with the home‘s inner workings, locate shut-off valve and breaker panels, and pick up tips on operating and maintaining different systems.

A thorough home inspection of an average home should take between 2 ½ and 4 hours and should cover both internal and external components of the property. Major items examined should include:

a. Siding, foundation, brickwork, etc.

b. Insulation

c. Deck, roof, garage

d. Attic/basement

e. Driveway and walkways

f. Electrical system

g. Plumbing

h. Doors and windows

i. Heater, air conditioner, and hot water heater

j. Ceilings, walls, and moldings

Having your Virginia Beach real estate inspected will allow you to make an informed decision about the purchase of a house and will provide you with both essential knowledge and peace of mind.

The age of formality and overindulgent features has gone by. Buyers of Virginia Beach real estate are giving up formal dining and living rooms and passing on libraries, parlors, and studies, opting instead for casual great rooms in which to entertain and enjoy family togetherness. Features currently in demand include the following:

STORAGE SPACE: A double car garage is a must since most homeowners use half of it for storage. Ditto for walk-in closets, a basement or attic, storage space  under stairs, and pantries.

ROOMS: The kitchen (with an island), family room, and master bedroom remain the three most important rooms, and they will most likely increase in size. Living and dining rooms, however, will tend to disappear. Another growing trend is a first floor master bedroom suite, a feature especially desired by seniors.

TECHNOLOGY READINESS: The majority of buyers want cable/satellite readiness and high speed internet access. Also valued are homes wired for surround sound, an HD feed, and in-wall speakers.

ENERGY EFFICIENCY: In addition to energy-saving appliances, potential buyers are looking for Virginia Beach real estate that has high-efficiency insulation and windows. Also popular are built-in recycling bins and tankless water heaters. In addition, stone and brick exteriors are preferred.

HOME OFFICES: Space in which to work from home continues to be in great demand. Most buyers will gladly exchange a third bedroom or dining room for a functional office.

OUTSIDE ROOMS: Quickly gaining in popularity is the creation of an outside room that extends the home’s living space and incorporates nature into one’s life. Most desired are outside kitchens and entertainment areas.

Being aware of new home design trends can be beneficial to both the buyer and seller of Virginia Beach real estate. If you are selling your home, it would certainly be in your best interests to incorporate some of the new trends into your home whenever possible and stress these features to potential buyers.

Search all Virginia Beach real estate and homes for sale.

Before undertaking such a project, you should first decide on a location and then make a master plan, one that can be implemented in steps. Select a space that can be easily viewed from your home’s interior so that it will feel like an extension of your house. Easy access to the space from the house is also preferable.

The size and scope of an outdoor living space can vary greatly, ranging from a screened in porch to a large area featuring a spa or pool. Whatever the size, however, you will want to consider function, features, furniture, and flora.

FUNCTION: Most outdoor rooms begin as an extension of your kitchen and include some type of grill, space for food preparation, and often a small refrigerator or modular cabinetry.  Other defined areas may include a conversational grouping, a quiet secluded spot for reading or resting, or an area set aside for family activities such as badminton, croquet, or playing in the sandbox or on children’s equipment. Spas and pools generally define their own space.

FEATURES: The features you choose for the outside room of your Virginia Beach home will do much to enhance your enjoyment and use. Current favorites include pergolas, cabanas, gazebos, and arbors for shade; fire pits or fireplaces for warmth in chilly months; stationary benches or wall seats; and fish ponds, rain barrels, and fountains which reuse natural rainfall and provide soothing sounds to foster relaxation.

In terms of both practicality and appearance, lighting is another important feature. Not only will it allow use of your outdoor space at night, it will also increase the aesthetics of the area. Low-voltage up-lighting (lights in or on the ground) and down-lighting (lights mounted in trees) are each effective in highlighting areas of interest. The use of LED lights or spotlights is becoming quite popular, as is specialty lighting such as Chinese lanterns, strings of themed lights, and underwater lighting.

FURNITURE: Basic furniture pieces usually include a table and chairs for dining and extra chairs for seating. Chaises, umbrellas tables, and side tables are also of value, and              separate spaces are sometimes defined by the addition of outdoor rugs and carpets, now available in a variety of sizes, shapes, and colors–all weather-resistant!  In addition, a new generation of outdoor fabrics has arrived, providing many style choices for outdoor decorating. The non-fade, weather resistant materials are quite durable and easy to clean with just soap and water.

FLORA: The use of low-maintenance and native vegetation will do much to add to the beauty to your outdoor space. In-ground or container plants can be used to define different spaces, bridge the space between your house and the outside room, invite birds and butterflies to your yard, and provide shade, color, and fragrance. Water plants are also becoming popular and are virtually maintenance-free.

As you create your outdoor paradise, keep in mind that not only are you investing in many years if enjoyment; you are also increasing the resale value of your Virginia Beach home.

The age of formality and overindulgent features has gone by. Buyers of  Virginia Beach real estate are giving up formal dining and living rooms and passing on libraries, parlors, and studies, opting instead for casual great rooms in which to entertain and enjoy family togetherness. Features currently in demand include the following:

STORAGE SPACE: A double car garage is a must since most homeowners use half of it for storage. Ditto for walk-in closets, a basement or attic, storage space  under stairs, and pantries.

ROOMS: The kitchen (with an island), family room, and master bedroom remain the three most important rooms, and they will most likely increase in size. Living and dining rooms, however, will tend to disappear. Another growing trend is a first floor master bedroom suite, a feature especially desired by seniors.

TECHNOLOGY READINESS: The majority of buyers want cable/satellite readiness and high speed internet access. Also valued are homes wired for surround sound, an HD feed, and in-wall speakers.

ENERGY EFFICIENCY: In addition to energy-saving appliances, potential buyers are looking for Virginia Beach real estate that has high-efficiency insulation and windows. Also popular are built-in recycling bins and tankless water heaters. In addition, stone and brick exteriors are preferred.

HOME OFFICES: Space in which to work from home continues to be in great demand. Most buyers will gladly exchange a third bedroom or dining room for a functional office.

OUTSIDE ROOMS: Quickly gaining in popularity is the creation of an outside room that extends the home’s living space and incorporates nature into one’s life. Most desired are outside kitchens and entertainment areas.

Being aware of new home design trends can be beneficial to both the buyer and seller of Virginia Beach real estate. If you are selling your home, it would certainly be in your best interests to incorporate some of the new trends into your home whenever possible and stress these features to potential buyers.

In essence, by becoming a landlord you are operating a business, making major decisions which can affect your family, setting and adhering to a budget, and spending time overseeing and maintaining the property. For a period of years, at least two and more likely five, you will be employed as your own property manager. You must then find a steady flow of good tenants, draw up leases, collect rents, make repairs, keep accurate records re: income and expenses, file taxes, obtain permits, find suitable insurance, and establish a workable relationship with your tenants.

You must also know–and follow–federal, state, and municipal health and safety codes and landlord/tenant rights and responsibilities. Simply put, your responsibilities as a landlord include the following:

• Make and keep property habitable

• Make and pay for repairs arising from ordinary wear-and-tear.

• Refrain from turning off utilities

• Provide written notice in the case of transfer of ownership

• Comply with statutes involving discrimination

Basic tips for becoming a successful landlord include:

• Have a carefully written lease, one that will stand up in court if disputes with your tenant cannot be resolved. Be specific; who mows the lawn/ who disposes of trash? Who pays for what?

• Know the law!!! Both you and your tenant have rights and responsibilities, and you need to be aware of all of them.

• Establish a friendly, fair, but firm relationship with your tenants. Treat them with respect and be forthright about your expectations.

Investing in Virginia Beach real estate has quite a few tax advantages, such as mortgage interest and property tax deductions, operating expense and travel write-offs, and the depreciation factor. Because you will be dealing with so many possibilities, it is a good idea to consult your tax attorney or CPA to avoid complications and ensure your highest deductible amount.

Undaunted? Still hoping to become a landlord of your Virginia Beach real estate? Make sure you cover all your bases, do adequate research, and find a spirit of adventure–and then, GOOD LUCK!

Or contact us to become Property Managers of your Virginia Beach real estate.