Google has finally added Saint Louis to the list of cities with ‘Street View’ functionality. I’m glad to see so much of the city has been covered already, with more to come! This is a great way to quickly explore a few properties you may be interested in and the surrounding streets.

Check it out here

Appraisals are a common part of most real estate transactions. Anytime a person applies for a loan an appraisal is ordered to help the bank determine whether or not making the loan will be a good risk. There are many other reasons to order an appraisal but in this case (seeking a loan) the appraiser is working for the bank.

Appraisals are not an exact science, but there is a very detailed process that appraisers must go through to determine value. Their intended audience is the underwriter at the bank who will be approving the loan. The appraiser’s job is to be the eyes and ears for the bank and they are required to stick to the facts. However, since no two homes are exactly alike there are many subjective “facts”

A bit about the process

First step is to gather data by researching the tax records and MLS. Apraisers must also study the subject property’s sales history for the past three years, determine the zoning for and around the subject property, acquire the tax information, study the site and select appropriate comps.

Selecting comparable properties is one of the most important factors that helps appraisers determine value.

A comp must be similar in design: a ranch home must be compared with a ranch home.

A comp must be within 1 mile radius (for the city this radius is even smaller)

A good comp must have sold within the last 6 months

A comp must be similar in site and size

Again, since no two homes are ever the same, adjustments must be made for amenities like fireplaces, spa-bathrooms and hardwood floors. The adjustments are made to the comparable properties and if the net of all the adjustments made alter the value by more than 15% either way, the comp is discarded.

Another part of the appraiser’s job is to study the terms of the contract. The appraiser is required to review all the terms of the contract, including all offers, counter offers and addendums including any kind of concession in terms of closing costs and prepaids to determine how these conditions will affect value.

The appraisal is performed at the expense of the buyer and the cost of the appraisal will be billed to the buyer at closing in the form of closing costs. While the appraisal is techinically done for the benefit of the lender it is still an important safe guard for the purchaser. According to the SLAR Appraisal Rider, the buyer has three choices if their appraisal does not meet the agreed upon purchase price stated in the contract.

1. The buyer can terminate the contract with earnest money returned to the buyer.

2. The contract can be renegotiated to reflect the value stated in the appraisal.

3. The buyer can continue with the agreed upon purchase price if the buyer can bridge the gap between appraisal and purchase price with the buyer’s own funds.

Until very recently if you lived in any home for 2 of the last 5 years you could avoid capital gains taxes. This was a nice loophole for properties that once generated cash flow. It meant that you could buy a rental property allow it to generate income and then live in it for 24 month to avoid paying capital gains. For a single person the exclusion pertained to any gain up to $250,000. A couple could exclude up to $500,000 from capital gains.

However attached to a new bill for mortgage relief is a provision that prohibits this exclusion. For example, say a couple buys a second home in 2006 to use as their vacation home. Three years later, in 2009, they sell their primary residence and move into the vacation home, making it their main home. They sell that home in 2011, realizing a gain of $200,000. Under the proposal, 20% of the gain, or $40,000 (one year of nonqualified use after 2007 divided by five years of ownership), isn’t eligible for the capital gains exclusion. The other $160,000 can be excluded from income because the two-year usage and ownership tests were met.

Read the full article here. And make sure to consult your accountant in the future when selling a second home or rental property.

WASHINGTON - Rates on 30-year mortgages were unchanged this week as a flood of new economic data did not change the general views of financial markets about inflation.

Freddie Mac, the mortgage company, reported Thursday that 30-year fixed-rate mortgages averaged 6.73 percent this week, the same as last week. That left the rate close to its high-point of the year, which was 6.74 percent set the week of June 14.

Sounds scary, but check out the monthly averages of rates in 1983.

View the monthly averages of mortgage rates between 1983 and 2007 here. 

Walk around almost any St. Louis city street in an older neighborhood and you’ll see some level of cracked and bulging sidewalks. This is typically the result of roots from a mature tree growing tired of the cement that’s layered on top of it.

Rubbersidewalks has an idea: “The modular sidewalk system allows air and water to reach the soil below, and can be pulled apart for easy tree and root maintenance, decreasing the need for urban tree removal.”

Rubbersidewalks are made from 100% recycled tire rubber, and can be collected and recycled back into the manufacturing process.

Read more about it here: Rubbersidewalks.com
Or through the Inhabitat Post: http://www.inhabitat.com/2006/02/21/rubbersidewalks/

St. Louis has a 50-50 sidewalk program for city residents; where they pick up 1/2 of the tab for any sidewalk work. I don’t think rubber sidewalks are part of this program, at least not yet.

The National Association of Realtors completed a review of academic research on the benefits of homeownership. Obviously there was an agenda but according to the study the following are a few of the social benefits that stem from homeownership.

*Higher educational performance and better behavior of children

*Lower community crime rates

*Lessened welfare dependency among households

*More household participation in civic affairs

*Better household health.

See NAR’s Social Benefits of Homeownership and Stable Housing