How Important is a Home Inspection?

How important is a Home Inspections to a new homeowner like me? Extremely Important! A house we purchased in the past had hidden health hazards that we didn't find until we tried to have carpet installed in our basement. Asbestos was hiding under the floor tiles so we were stuck having to deal with it because we didn't have a home inspection to find this hidden danger before we purchased the house. Using a reputable inspection company is important and it's easy to find comments and feedback about companies on the internet in addition to your realtor's suggestions.

 

We decided to get a home inspection when we purchased our home in Las Vegas not only to find any problems, but also because we weren't familiar with how houses are built here. For example, the hot water heater didn't have a drip pan underneath - one of the very first things we had fixed when we moved in. We were extremely thankful for that information when it decided to start its massive leaking at 3am. The pan caught the water and diverted it through a pipe leading outside. The home inspector also explained what a Heat Pump is; to look for dripping from overflow pipes; how roof tiles differ from a shingled roof; and many other informative tips.

The detailed report we received from our home inspector has been very valuable not only pointing out problems and repairs, but also maintanance tips and general construction information. It's like having an Owner's Manual on our home.

Shocking Facts About Appraisals!

Last month we had a guest speaker at our team meeting who has been doing appraisals in the Las Vegas Valley for more than 20 years. She has a stellar reputation in the industry, and usually comes to speak to us at least once a year to update us on appraisal formulas, how adjustments are made, the value of specific improvements to real estate in Las Vegas and trends in appraisal values.

But this time, a random question about how appraisers are chosen by the banks led to some shocking discoveries!

First: a little background. Because of the “mortgage meltdown,” the federal government passed specific laws requiring mortgage lenders to order appraisals through a “neutral” third party. Appraisal management companies were formed. These companies receive the appraisal order from the mortgage lender and then assign an appraiser from their “approved” list. The mortgage lender cannot ever speak to the assigned appraiser, and all communications must go through an online portal to the appraisal management company.

The general population, Las Vegas Realtors included, have been under the assumption that these appraisals were assigned in rotation to the next appraiser in line to preserve the integrity of the process. Not so!

The appraisal management company charges a fixed fee to the mortgage lender for each appraisal. When the management company receives an appraisal work order, they send out a “first come, first served” type email to all the appraisers on their list. From the responses, the management company then selects the appraiser that is willing to complete the appraisal in the shortest possible time for the lowest possible price!

So if ten appraisers respond with the same general timeline, the management company will then select the CHEAPEST appraiser. Say the appraisal fee the management company is charging the lender is $450. If one of the appraisers that responds is willing to charge only $200 and the rest are charging more, the management company gives the order to the least expensive appraiser and pockets the difference.

This means that every appraisal that is being done is being awarded to the appraiser that is willing to charge the least. YOU GET WHAT YOU PAY FOR. In most instances (though not all), these are the less experienced appraisers. (Well established appraisers like our guest speaker will not even sign up to be on the list with appraisal management companies!) In addition, because these appraisers are earning less per appraisal, they have to make up in volume for charging less, which means that they are less likely to spend the extra time to truly evaluate each subject property. They are also less likely to “reconsider” the value of an appraisal that is contested.

So it is no wonder that over the past couple of years homebuyers, sellers and Las Vegas lenders are more consistently experiencing “bad” appraisals that do not truly reflect current market value.

Two Sides to the Story - Las Vegas MMA

By Glen Tonnesen

This is off the topic of real estate, but the same principle holds true. There are usually always two sides to every story.

You know how you read an article in the newspaper and make up your mind right away based on the writer's perceptions?  I have read "The 7 Habits of Highly Effective People" by Stephen R. Covey, so I should remember the perspective of viewing both sides of the story.

 

I ran into this scenario when I read Adam Hill's article in the Las Vegas Review Journal on Friday morning.  His story told more of Dana White's side rather than Greg Jackson's side.  For those of you who do not know either of these gentlemen, Dana White is the President of UFC (Ultimate Fighting Championship) and Greg Jackson is the trainer of Jon Jones ,the light heavyweight champion.

 

Jon Jones was supposed to fight past champion Dan Henderson in what could have been the fight of the year, but Mr. Henderson suffered a knee injury and had to pull out.  No one wanted to fight Jones except for Chael Sonnen, a trash talking, tough and very dangerous foe.  Greg Jackson strongly advised Jones to pass on fighting Sonnen at this particular time, which he did.  It resulted in the first ever cancellation of an upcoming major card.  Dana White became incensed, and felt that the champion should rise to the occassion and fight whoever he puts in front of him. 

After reading that first article, I agreed with Dana White, Jones was letting everyone down.  It is a blow to our economy here in Vegas when something of this magnitude is shelved. All the other fighters on the card along with their camps and the tens of thousands of workers who would cater the event are out of luck. It brings alot of money to our great city, provides employment and (dear to my heart) allows locals to purchase homes in Las Vegas. 

 

But then I read Ed Graney's commentary in which he gives Jackson's side.  If you haven't seen an MMA fight, you are missing the best sports action today.  MMA brings us back to the Romans / Lions battles, except that no one dies, and the respect the fighters have for each other is evident at the end of the war.

But you have to be tough, fast, strong, smart and PREPARED to win in this game with so much at stake.  A bad loss can literally end a career both as an athlete and a contender who is offered the big fights.  Greg Jackson prepares his fighters for the opponents they will be facing next, and it takes a whole camp to do it, not just a couple of weeks.  They did not prepare for Sonnen, they prepared for Henderson.  Football coaches prepare  for the next team they will play and plan accordingly. Jackson did NOT want his fighter hurt because he was not properly prepared.

I along with Mr. Henderson am VERY disappointed that this card did not happen.  I love LasVegas and want to see it thrive, but sometimes s--t happens.  Just remember to look and listen at both sides before making up your mind, and please come and vist Las Vegas for all it has to offer.