The Truth About Appraisals: Knowing the Guidelines Solves the Mystery

Kenai Peninsula AppraisalThe appraisal process often baffles consumers. They may feel that their Kenai Peninsula home is worth a higher dollar amount, and so the appraised value doesn’t always make sense to them. It is important to know that the appraiser is completely independent from lenders, buyers, sellers, and real estate agents, and that the guidelines to which they adhere are dictated by the Uniform Standards of Professional Appraisal Practice (USPAP) and Fannie Mae. In most states, the mortgage lenders must also disclose the purpose of the appraisal, as each transaction carries its own set of rules.


In essence, these important guidelines help appraisers put a fair market value on Kenai and Soldotna area homes based on comparable sales in the same area, and the home must be bracketed in size and value.


For example, there is no set dollar figure associated with a great view, shop, hot tub, bathroom upgrades, etc. If a homeowner installs a custom bathroom that cost them $20,000, but the local marketplace supports the value of a bathroom at $5,000, then that item will be bracketed as [$15,000] on the appraisal.


Upgrades can usually be expressed at a higher percentage of their value in newer Kenai homes because the only way to obtain those upgrades was to put more money into the cost of building the home. On the other hand, the upgrading or remodeling of an older home is rarely reflected in full in the final appraisal. This is because typically 25-40% of the project involves demolition and the fixing of issues that aren’t uncovered until the project has already begun, such as plumbing or wiring that may need updating.


Ultimately, the value of the upgrades must be supported by comparable examples within the same marketplace. These comparisons must be drawn from current market activity within the last six months. This is a safeguard to prevent appraisers from attaching too high a value to the home in question, and opening up the appraisal for review. This guideline further states that appraisers can only base their opinion on the value of home sales that have actually closed within close proximity to the subject property.  In the Kenai Peninsula real estate market it can be challenging at times to find a comparable property within a mile, the norm for most markets.


As a loan professional, I make a point to follow the appropriate guidelines at all times, including the guidelines in the Home Valuation Code of Conduct, which among other things prohibits a lender from having any contact with or influence on how the appraiser values a home. Staying up-to-date on the rules of my industry helps to create easier and much smoother closings for my borrowers.


Aaron Swanson                                                    

Mortgage Planning Specialist # AK 194627

Residential Mortgage # AK 167729

Phone: 907-260-9701

Fax: 907-260-9727

equal housing lender

How to Price Your Home To Sell

inv_supply_pricesPROPER PRICING
For every property there are three prices.
The one the buyer wants to pay.
The one the seller wants to profit from.
The one the market will bear.


One of the hardest topics up for discussion is price. Real estate is more than a product and homes are more than furniture and dishes. They are a collection of memories and emotions. Unfortunately the emotions that home sellers attach to their property are not the factors that a disinterested buyer would attach. When pricing your home it is important to look at it as a buyer would.

What are the factors that influence price.


Location, Market factors, Asking Price, Condition, Presentation


Lets start with the two you cannot control easily. Location, location, location is one that can’t be altered. It is set in stone or concrete. Some area are better seller than others and properties by water or with a view can usually sell for more then comparable homes without. The same is true of a neglected 1950’s neighborhoods compared to a new subdivision built in the 2000’s.


The overall market, such as inventory, absorption rate, and interest rate can always change and effect how buyers value your home. But is out of the control of agent and seller, but must be taken into consideration when pricing a property. The 2013 real estate market in Kenai and Soldotna is about 25% better than 2012 by number of sales and prices are appreciating. At the same time interest rates are climbing and will reduce the purchasing power of buyers.


The seller can control the asking price, the condition both inside and out and the staging to make the home welcoming. Most sellers make the mistake of pricing their home with only the asking price without considering the condition or presentation. Any experienced agent will tell you that you need to factor in all three. A well priced home that is in good condition will take longer to sell if it is not available for showing during the evenings and weekends. A vacant home with pricing that matches it best comparable properties in it neighborhood will never sell for top dollar if the drywall is messed up and the dogs and cat have soiled the carpet.


Buyers have more information on homes than ever before! Most of the time they can start without an agent to guide them. When a home come into the market most of the pool buyers have already been through the existing inventory and rush in to look at the fresh inventory. When the home is correctly priced it encourages agent and buyers enthusiasm. Enthusiasm leads to showing, showings leads to a sales. After a while a home will develop a bad reputation and will turn into the ugly duck that make all the other homes look good. You don’t want to be the home that helps other homes sell.


The properly priced home will sell faster and ultimately for a higher price. When overpriced it take longer to sell, the longer it is on the market, the lower the sales price to list price. The market is picky so both the condition of the market and home must be considered when pricing. The market has no feeling for what you need out of the home. It will only recognize how the home fits with other homes.


So remember the market determine the value.

Maintain Your Alaska Septic System

Alaska DEC Septic System

For many new to Alaska and the Kenai Peninsula, septic systems are a foreign concept. The vast majority of Americans, at least the ones moving from a city of any size, had city sewer and water. Both the city of Kenai and the city of Soldotna have city sewer and water within the core of the communities, but you often lose access if you are farther than two miles from a stop light, cross the Kenai River or simply don’t live in town. For rural communities with large lots and a dispersed population (The Alaska Kenai Peninsula) septic systems are the only cost effective option. It is estimated that 30% to 40% of the Alaska’s population use a septic system.


The primary purpose of the system is to move human waste out of the house and protect the ground water. During the homestead days of the 50’s and 60’s a wood crib was used to disperse the waste.  Wood cribs were popular and cheap.  The only problem is that most contaminate the ground water. This was not an issue until the homesteader started to have neighbors who placed a well nearby. Modern septic systems were designed to reduce the impact that your sewage would have on your drinking water. If you have concerns, a local inspector can test the water for contaminants.

So What Is A Septic


The system consists of a septic tank and a drainage field above and separated from the ground water. The septic tank is fairly standard, most importantly it needs to be sized appropriately for the number of bedrooms and baths it will serve. The septic tank’s purpose is to separate the solids from the liquids. Once the liquid waste leaves the tank it moves into the drainage field where it is dispersed, hopefully. There are several types of drainage field designs ranging from trench and engineered mounds to the occasional pit. The big difference between a wood crib and modern engineered septic is the spacing and type of soils and gravels placed in the drainage field to separate the sewage from the water table. This allows an opportunity for the grey water to be filtered by nature’s bugs before it is sucked up by your downhill neighbors well.


When considering a home, make sure that your drainage field is at least 100 feet from your well and your neighbor’s well. It is also a good idea to make sure that your well is at least 100 feet from any surrounding septic drainage fields. If you have questions on septic design check out the State of Alaska Certified Installers Manuel. The local Alaska DEC office in Soldotna can be reached at 907 262 3402.

What is different about Alaska septic systems?

The ground temperature. In the majority of the US the ground temp is in the 60’s. Alaska’s ground temp is in the 40’s four feet below an average lawn. Why is this important? Most types of bacteria can’t survive at this cool of a temperature, so… solids in the holding tank don’t breakdown as fast or at all. Additionally, many companies advertise septic additives to boost the bacteria level in your tanks. What they don’t tell you is that if the temps are below 55 degrees most of their bugs die.


If you recently bought or are buying a home with a septic you need to know the basics of maintaining it. To learn more about what not to put down the drain review “How to destroy your septic”. The most important rules to maintain your septic system are below.


Rule # 1: If you did not personally make it, don’t put it in the septic. The system is designed for human waste only. No food, feminine hygiene products or oils.


Rule # 2: Have your tank pumped at least every year and a half. If you have the money, doing it annually is cheap insurance. Remember Alaska’s ground temp is cool and slows decay. It is not uncommon to have a significant buildup of solids after a year, particularly for a large household.


Rule # 3: For all you tourists and snow birds. Never dump your RV waste tank into the septic holding tank. A septic holding tank is design to accommodate a bath tub of water at a time. A standard RV waste tank will easily flood the holding tank, forcing solids through and into the drainage field, instantly plugging it up. Very bad, very expensive. Alaska DEC requires that most failed systems have the drainage field COMPLETELY replaced. That can run from $6,000 for a deep trench to $20,000+ for an engineered mound.


The State of Alaska DEC has a fairly good site on Alaska septic systems including a list of certified installers.


Is Your Kenai Home Not Selling: LEAVE The Property During Showings

African-American woman being stalked by a criminalOne of the best actions you can take to sell your Kenai property is to leave during a showing. Kenai homes are very personal spaces and home shoppers can feel awkward when touring someone else’s personal space – particularly when the homeowner is stalking them in the hallway. Many buyers are very reluctant to look at the property when they feel like they are intruding. They want to look at the property at their leisure. They want to look in cabinets, peak in closets, discuss the property openly and honestly with their family and realtor. They will not do that if the seller is there.


Many homeowners feel that no one can SELL a home better than the person who has lived in it. The problem is that home shoppers hate to be sold, but they are very interested in making an informed decision.  This is what agents do best, educate the buyers about the area, homes and address concerns. So please give the buyer and the agent the opportunity to explore the unique attributes of your Kenai home without feeling pressured. Take a drive, take a walk, just please don’t be around to talk.


Spring Project For Your Soldotna Home: Color Tips

This may give you some ideas if you are planning on make a few changes this spring.  Buyer’s of Soldotna real estate & homes for sale are very sensitive to color choices.  The home that doesn’t need to be repainted or updated will often sell better than a unique home with individualized color choices.

eclectic-dining-roomTaste a Rainbow: 11 Top Home Decorating Colors and How to Use Them
Prime yourself for spring painting season with our color-happy guide to working with popular shades around the home

Before You Leave Your Kenai Home….

Kenai hands-homeThe last thing you want to do while you’re on a trip is to worry about someone burglarizing your Kenai home. Use this checklist to add some peace of mind to your travel plans.

  • Ask a trusted friend – to pick up your mail and newspaper and keep the yard free of trash and advertisements.
  • Stop your mail but maybe not your newspaper – you can easily handle this online by going to the US Postal Service’s Hold Mail Service. A recent story implicated an employee from a major newspaper who was passing customer hold requests to burglars.
  • Don’t post about your trip on Facebook and Twitter until you return – some burglars actually look for this type of announcement to schedule their activities.
  • Do your neighborhood watch – especially if you’re going to be gone for more than just a few days. Let your monitoring service know when you’ll be gone and if someone will be checking on your home for you.
  • Light timers make it look like someone is home – use several set for different times to better simulate someone at home.
  • Do unplug certain appliances – TVs, computers, toaster ovens that use electricity even when they’re off and to protect them from power surges.
  • Don’t hide a key – burglars know exactly where to look for your key and it only takes them a moment to check under the mat, above the door, in the flower pot or in a fake rock.

These easy-to-handle suggestions may protect your belongings while you’re gone while adding a level of serenity to your trip.