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Bio
Southern California native born in Los Angeles. My appraisal education began in 1995 and I've been a career appraiser ever since. I've owned and operated my appraisal firm since 1998 specializing in lender and litigation appraisals in Los Angeles, Ventura and Orange Counties. During the boom, my practice grew to over 25 licensed and certified appraisers that serviced a diversified client network of loan officers, realtors and attorneys. I've trained and gave guidance to over 70 various-level appraisers of which many continue careers independently and within institutions. Under my guidance my firm produced thousands of assignments including review work, purchase money, equity, bankruptcy and private party litigation appraisals. I'm on the preferred roster of many leading institutions and selected exclusively by top realtors and attorneys. I am California State Certified (OREA#AR025719), and a member of the National Association of Real Estate Appraiser and the National Association of Review Appraisers & Mortgage Underwriters.
Collaborative Efforts:
From 1999-2002, I collaborated extensively with GlobalDMS - a leading technology company - in the development of the #1 appraisal management platform in the US and Canada today used by appraisal firms and large banks.
In 2005 I collaborated with a highly respected California accredited appraisal educator in developing an on-line interface for an interim continuing education course approved by the state, from conception to implementation.
Valuation Specialties:
Bankruptcy appraisals. Substantive reports with data-intensive narrative. Effective rebuttals to opposition motions with 100% success to date. (Call for references). Other specialties include FHA and Conventional appraisals. USPAP compliant reports delivered timely and efficiently.
Why I'm An Active Rain Member
• Further public trust of the real estate industry with continued education, practice and service.
• Focus my efforts, experience and abilities to help partners further streamline their businesses.
• Cultivate relationships with other truly commendable mortgage, realty and legal professionals.
• Reciprocate referrals and mutually grow each others network.
About Our Services
Valencia, California based appraisal firm specializing in mortgage and litigation appraisals in the Santa Clarita and San Fernando Valleys. Expertise and coverage includes most areas in the Los Angeles, Ventura and Orange Counties. Appraisal experience includes but is not limited to:
Property Types:
- Historic Properties
- Unique (hard to appraise) 2-4 Residential Income Property
- Luxury Homes
- (CTP) Tract/Spec Construction Loans
- Multi-Million Dollar Architectural Property
- Manufactured Homes
- Land
Purposes:
- Bankruptcy
- Divorce
- Mortgage Finance
- Probate
- FHA Financing
- Litigation
- City Rehabilitation Projects
RECOMMENDATIONS
Fred Gruber - First Rate Financial Group
"I have had the pleasure of working with Michael over the past 2+ years. His attention to detail and integrity sets him apart. I know I can count on Mike to give me honest and well supported results. He is approved with many lenders who also recognize his integrity and honesty. You can be confident in the work product Mike delivers. I endorse him and consider it a priveledge to be associated with someone of his honesty and integrity."
September 18, 2007
Top qualities: Great Results, Expert, High Integrity
Ron Avneri - Wachovia/World Savings
"Michael is a great appraiser and understands the real estate market very well. His knowledge of the industry and home valuations are both logical and well proven through his work. Michael's appraising ability is not limited to the house next door as I have seen his work from mobile units to multi million dollar estates. He is a great source for finding a property's real value."
October 29, 2007
Kaye Thomas - Real Estate West
Hi Michael,
I just wanted to thank you for the appraisal you did for my clients... via Brain Brady in Redondo Beach. The detail was very impressive...truly one of the best appraisals I have seen in a long time...and so quick.
Many Thanks
December 22, 2007
Ricardo Bueno - World Wide Credit Corp.
"Detailed, knowledgeable, timely, and caring, Michael produces top quality work and is always available to aid you in researching whatever information you need. I should note that not all appraisers take the time to provide that kind of support. Michael's use of technology ensured that I was updated on my appraisal order from beginning up until receipt of my order and thereafter. I didn't have to call for updates or sit wondering when the work would be completed. This is an excellent quality given the need for timeliness in execution in our industry. Thank you Michael for you excellent work! My client feels as strongly as I do about the quality of your work."
April 29, 2008
General Definitions and Valuation Concepts
Fair Market Value is the price a property would bring if freely offered on the open market with both a willing buyer and seller.
The following can be assumed of all fair market sales:
- Buyer and seller are operating in their own interest
- Buyer and seller are knowledgeable about the transaction and make careful decisions
- The property is available for a reasonable time on the open market
- The sale is for cash or trade, or is specifically financed
- Normal financing, available to qualified borrowers, is used
Price is what is paid for something. Cost represents expenses in money, labor, material or sacrifices in acquiring or producing something. Value has to do with the present and future anticipated enjoyment, or profit of something. Value has four elements:
- Demand - the desire to buy and the ability to pay
- Utility - usefulness
- Scarcity - the fewer available, the more valuable
- Transferability - the title must be marketable, unclouded
Certain forces influence value. The forces include:
- Environmental and physical characteristics - quality of conveniences, availability of schools, shopping, public transportation, churches, and similarity of land use.
- Social ideals and standards - population growth and decline, age, marriage, birth, divorce and death rates all combine to cause changes in social patterns.
- Economic influences - some of the economic forces are natural resources, industrial and commercial trends, employment trends, wage levels, availability of money and credit, interest rates, price levels, tax loads, regional and community economic base, new development and rental and price patterns.
- Political government regulations
- Other factors - directional growth, location, utility, size, corner influence, shape, thoroughfare conditions, exposure, business climate, plottage or assemblage, topography and soil, obsolescence, building restrictions and zones
Principles of valuation include:
- Principle of conformity - when land uses are compatible and homes are similar in design and size.
- Principle of change - economic, environmental, government and social forces are always dynamic, causing changing values in real property.
- Principle of substitution - the foundation of estimating the value of real property.
- Principle of supply and demand - increasing or decreasing will reduce the price in the market.
- Principle of highest and best use - based on the reasonable use of real property at the time of appraisal that is most likely to produce the greatest net return to the land.
- Principle of progression - a lesser valued property will be worth more because of the presence of a greater valued property nearby.
- Principle of regression - a greater valued property will be worth less because of the presence of a lower valued property nearby.
- Principle of contribution - the worth of an improvement is what it adds to the entire property's market value, regardless of the actual cost of the improvement.
- Principle of anticipation - probable future benefits to be derived from a property from a property will increase the value.
- Principle of competition - when considerable profits are being made, competition is created.
- Principle of balance - when contrasting, opposing or interacting elements are in balance in a neighborhood or area, value is created.
- Principle of three stage life cycles - development, maturity and old age
The appraisal process has four steps:
- State the problem - the appraiser must identify and describe the property to be evaluated and indicate the purpose of the appraisal
- Gather data
- Decide on the appraisal method to be used - sales or market comparison approach, cost approach, income approach
- Reconcile or correlate the data for final value estimates - to examine the values derived by the various approaches and decide which of the values is the most appropriate for the subject property. This figure is used as the final estimate of value for the property.
The second step of the appraisal process, gather data, involves site analysis. The appraiser must evaluate all legal data connected with the site and consider the physical factors of the site.
The legal data includes:
- Legal description
- Taxes
- Zoning and general plan
- Restrictions and easements
- Determination of other interests in property
The physical factors of the site include:
- Shape of the lot
- Topography and soil conditions
- Corner influence
- Relations of site to surroundings
- Availability of public utilities
- Encroachment
- Landscaping and subsurface land improvements
Buildings and other permanent structures are also taken into consideration during the site analysis and include:
- On-site improvements - structures permanently attached to the land, such as buildings, swimming pools and fences.
- Off-site improvements - areas bordering site improved by the addition of streetlights, sidewalks, greenbelts and curbs.
Appraisal methods (Step 3) that can be used are:
- Sales (Market) Comparison Approach uses the principle of substitution to compare similar properties. This like-kind comparison takes into consideration neighborhood location, size, age, architectural style, financing terms, and general price range. Certain elements such as financing terms, time of sale, sale conditions, location, physical features, income from the property will cause estimates of value to vary.
Two advantages of the sales comparison approach are 1.) It is the most easily understood method of valuation and most commonly used by real estate agents, and 2.) It is easily applied for the sale of single-family homes
Four disadvantages of sales comparison approach are 1.) Finding enough recently sold similar properties to get comparable values, 2.) Correctly adjusting amenities to make them comparable to the subject property, 3.) Older sales may be unreliable with changing economic conditions, 4.) Difficulty in confirming transaction details.
The procedures for this approach are to 1.) Find similar properties, select and verify data, 2.) Select appropriate elements of comparison, adjust sales price of each comparable, 3.) Adjust sales prices of comparables by subtracting the adjustment if the subject property is inferior to the comparable and by adding the adjustment if the subject property is superior.
- Cost approach adds the value of the land, as if vacant, to the cost to rebuild the appraised building as new, less the depreciation to determine the value of the entire property. The formula for determining value based on cost approach is:
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Value of the land
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Cost to build structure new
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Accrued depreciation
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=
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Value of property
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The procedure for using the cost approach is to 1.) Estimate the value of the land as if it were vacant, using comparable land sales, 2.) Estimate the replacement or reproduction cost of the existing building as of the appraisal date, 3.) Estimate the amount of accrued depreciation to the improvements, 4.) Deduct the amount of the accrued depreciation form the replacement cost to find the estimate of the depreciation value of the improvements, 5.) Add the estimated present depreciated value for the improvements to the value of the land.
Methods to estimate the cost of a new building include:
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- Square-foot method - is the most common. The size of the building in question is compared by square foot, to the size of the other buildings with the same area.
- Cubic -foot method - takes height as well as area into consideration.
- Quantity survey method - detailing estimate of all labor and materials used in the components of a building.
- Unit-in place cost method - cost of the units in the building as installed in is computed and applied to the structure cost.
The three main types of depreciation are:
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- Physical Deterioration - can come over wear and tearnegligent caredamage by dry rot or termites severe changes in temperature.
- Functional Obsolescence - poor architectural design and style can contribute to this as
- Can a lack of modern facilities, out of date equipment changes in styles of construction
- Income or capitalization approach - the value of the property is based on its capacity to continue producing an income
The formula to estimate the value of income property is to divide net income by the capitalization rate. To determine net income 1.) Calculate annual effective gross income, 2.) Determine operating expenses, 3.) Calculate net operating income (add together all expenses not including debt service and subtract from effective gross income)
Types of appraisal reports include:
- Letter form report
- Short form report
- Narrative report
An appraisal report should contain:
- A final conclusion of value
- Date of the valuation
- Date of the appraisal report
- Description of the property
- Information of the city and neighborhood
- Information on the approach used
- Signature and certification of appraiser
All individuals who appraise real property in *federally related transactions must be licensed by the state of California and must complete continuing education courses every four years. (* Language is currently pending revision.)
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