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Getting a 7-Figure Home Appraised: An Interview with Michael Tierney of Tierney Appraisals

By Michael Tierney

Tell us a little bit about your company and the services you offer.

At Tierney Appraisals is a leading provider of real estate valuations for the mortgage lending marketplace. We cover Essex County, Middlesex County, and Suffolk County.

With 20+ years of experience in the business, we have a proven track record of reducing lenders time, efforts and costs in managing the appraisal process.

We are one of the leaders in this area providing appraisals for:
Primary and Secondary Mortgages, Mortgage Refinancing, Employee Relocation, Private Mortgage, Insurance Removal, Estate Planning, Divorce Settlement, Loan Modification.

What are some key things to take into account for a multimillion dollar home appraisal?

It has been my experience that when appraising properties of this type, you will be lucky to find one truly comparable property. These properties are usually very diverse, with regard to site, square footage and location. You can have a 7,000 SF house that will sell as much if not more than a 11,000 SF house due to condition or location alone. Its still a matter of Location as the number 1 factor. It is very important to take a close look at the particular market segment you are in to see where values are trending. Lower market segments may be increasing 5-8% per year while the high end segment 1,000,000+ might be stable which is the case in many towns.

Does a home appraiser need to do anything differently for 6-figure and over homes versus under 6-figure homes?

When appraising homes over 1 Million dollars you implement the same appraisal techniques for properties in a lower market segment. I usually try to have some comps with a similar GLA, some similar in location, and some in a similar condition. 5-6 comps should be used. I Don't worry too much about time/distance(within reason 2+/- years), as it is rare to find comps that fall under the guidelines for typical homes. As long as you can establish that there are other homes in this price range in the area, most lenders are okay with the high value. After all, this is probably a nice big jumbo loan that they would love to close on. Buyers in this range are typically a very good risk, and have sizable assets and a good down payment. With that in mind a credible report with an opinion of value backed up by reliable information is still crucial for the bank to make a well informed lending decision.

What factors typically play the biggest role in a multimillion dollar home's value?

After Location, condition and deferred maintenance are heavy considerations in this market segment. Lot size has to be looked at closely as the potential for additional lots within these larger-than-typical lot sizes could also play a major role in value. Many homes in my area of experience are near or on the waterfront and some have deeded beach rights. This can be a significant factor in the difference in values between the subject and comparable.

How do you evaluate some of the unique features that multimillion dollar homes might have?

I perform a competitive market analysis. This lists the features of your subject home, including the number of bedrooms and bathrooms, square footage, year of construction, heating source, air-conditioning and updated electric and then list unique features of comparable sold homes like a heated pool, custom built-in features, ornate features, tennis or basketball courts, heated garages or finished basements. This can help identify what these features contribute to the value of the home in that area. Again this is not an easy process and without a black and white answer in most cases. Compare your property with the sold properties, and adjust the price accordingly.

Do you have any tips for a waterfront homeowner before they get an appraisal?

The idea is to maximize your unique amenity over other homes with water views. Trim any bushes or trees that are blocking your water view from the home. Replace worn or broken boards in the docks or shore front decks. Paint and/or stain the entire waterfront area. Many waterfront buyers are new to the market and may not want to undertake any projects around the water. Many waterfront listings neglect this responsibility; it is an easy way to set your waterfront property apart from the rest.

Remove weeds from the sand beach area, rake beach prior to showings, build a sand castle and have a child's toy nearby. Parents and grandparents love to envision their children playing on a nice beach while they are enjoying the waterfront amenities.

What's the best way for people to contact you and your company?

I have a website at www.Tierneyappraisals.com. This will give you an idea of my credentials.

Tierney Appraisals
7 Washington Street
Beverly, MA 01915
Phone: 978-921-1776
Fax: 978-921-7476.

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