Fee Simple, Leasehold, and Leased Fee Explained In 3 Minutes

Fee Simple, Leasehold, and Leased Fee Explained In 3 Minutes

What’s the real difference between leasehold, leased fee, and fee simple?   Fee Simple Fee simple is the form property ownership people are most familiar with.  The term means you have absolute ownership- you own the rights to the entire property, including the land and buildings on it. This is often called “The bundle of rights.” You can occupy the property, you could rent out a room, you could paint it purple.  And provided your local laws allow it; you can re-zone it, you can sub-divide it, add square footage, tear it down, whatever you want.  It’s your property. Leased Fee & Leasehold When there is a lease involved, the landlord has leased fee ownership, and the tenant has leasehold rights.  When a property owner wants to lease out a portion of their property, usually they do so because they want to make money.  They want to collect a fee.  They want to collect that fee from someone who wants to occupy their property- that person want’s to hold the rights to live there, or to occupy the property.  If you get in an argument with your landlord (who has leased fee ownership) and he or she tells you to pack your things and leave, you don’t have to.  Assuming the lease says so, you have the rights to occupy the property (why would you sign a lease that says otherwise?), meaning your landlord would have to formerly evict you. Leasehold rights are less significant when we are discussing renting a room or house. Typically they are more important when you are talking about owning a property where you own the...
Things You Need to Know About Seller Concessions

Things You Need to Know About Seller Concessions

To provide the most accurate appraisal, real estate appraisers need to know as much as you can tell them about your deal.   Real estate appraisers need to take everything about your property into consideration when trying to determine how much it’s worth, and your concessions are no exception.  An important part of any real estate transaction, unreported or unmentioned concessions have the potential to drastically change your property’s value during an appraisal- and more often than not, that change is for the worse.   What is a Concession? In layman’s terms, a concession is anything the seller offers to help sway a buyer into putting their signature down on a deal.  The seller walks away with a little less, and the buyer walks away with a little more.  You could call it a little back-scratching.  Some common forms of concessions:   – Paying the loan origination fees or closing costs – Giving cash back for repair costs – Non-realty transaction items (personal property). – Cold hard cash back to the buyer   Here’s 2 Quick Examples:   A Cash Concession (the most common): Let’s say you want to buy a new home for $100,000, but are a little unsure of the price- and the front porch needs some work.  You need to put 10% down and $5,000 in closing costs on that new home- you would need $15,000 at closing.  The seller knows you are a bit uncertain, and offers you $5,000  to pay the closing costs.  Whether they pay the closing costs out of their pocket, or give you the cash  at the closing table- you still only need...
What’s the Difference Between Remodeling, Renovating, and Restoring?

What’s the Difference Between Remodeling, Renovating, and Restoring?

Are remodeling and renovating different?  Yes they are.  These two terms are often used interchangeably in real estate.  As real estate appraisers, whenever we see the word “remodeled” in one of our comparable descriptions, we always do a little fact-checking just to be safe.  After scrolling through tons of comparable photos for every report, we find that more often than not, the agent’s description is wrong. What is a Renovation? ‘ “Renovation” is a rather specific term, literally meaning “to make new again.”  The term is (or should be) mostly applied to cosmetic changes- new kitchen faucets, counter-tops or cabinet handles, interior paint… these are all examples of renovation.  Renovations don’t normally require any real structural work, and are almost always cheaper and less time-consuming then remodeling. We see lines like “renovated with new paint!” in listing descriptions a lot- but getting a new cabinet or a fresh coat of paint alone is not a renovation.  Renovation speaks more to a bigger picture- to take an out-of-date aspect of a property and update it into the modern age. What is Remodeling?   Remodeling means “to change the structure of.”  The couple at the top of this article are definitely remodeling.  If you add carpet, siding, and a ceiling to your basement (effectively making it a finished basement), that’s remodeling.  Getting an addition to your property is remodeling. Take a look at the picture: These people went all out.  The cabinets have been completely redone, as well as the tiles on the wall, all of the appliances… they even added an island.  They did not “renovate” to update a property into the...
3 Quick Ways to Spot a Bad Appraisal

3 Quick Ways to Spot a Bad Appraisal

“I may not be an appraiser- but I KNOW this house is worth more.” -Everyone who isn’t an appraiser   Peolpe make mistakes. I actually misspelled “people” when starting this article, but decided I wouldn’t correct it- it relates perfectly to the article.  You noticed my error, but simply overlooked it and kept on reading.  It’s okay to overlook things like that when you’re reading- but not when you’re selling a home.   Low appraisals are a popular topic in real estate these days.  Lots of people say it’s because there’s a depressed market or that there are too many foreclosures but not as many people consider that there’s a mistake in the actual report.  And even if you do consider that as a possibility, how do you find it?     All good agents look over their appraisals.  In fact, all good agents look closely over their appraisals.  But no agent can slave over a report, examining every last detail with a microscope- and that’s okay.  Here are a few things to keep in mind when reviewing a real estate appraisal.   1. Confirm your gross living area (if you can). The Gross Living Area  carries a lot of weight in a real estate appraisal. Gross Living Area (GLA) is measured as the above-ground square footage in a property that can be heated and cooled.  If a property hasn’t been updated with additional living space since the last appraisal (no matter how long ago), see if you can get your hands on it.  While no two appraisers will measure a home the same way, the measurements should at least be close.  If not, you should bring...