Tag: Yuan

Tips for New York Home Appraisal

If you are looking to buy a new home or just refinance your current mortgage, your lender will want to schedule an appraisal. This objective assessment helps to determine what your home is worth. Something that ranks high to all lenders is the consideration of collateral on their loan. Whether you are buying or selling, it will help you get a feel for how appraisals work. Here’s how you can prepare for your NYC home appraisal

What’s Involved? 

So what should you expect if you have someone come to your home to appraise it? An appraiser’s job is very similar to a home inspector’s position, with some tiny differences. Items that range from big to small will be taken into account by your appraiser, so that geometric mural that you did during the lockdown may need to go. 

Things That Go Into a Home Appraisal

While your potential buyer may love your place and decide that they are ok with your asking price, all lenders will require you to have your home appraised to determine its value. To help them arrive at an estimate, they will look at the following:

  • Your home’s exterior: The appraiser will look at just about every part of the construction of your home. From the roof to the foundation, walls, and flooring, these will all be the potential cause for the house’s value to decrease if the appraiser finds something wrong.
  • Size: A big part of determining the home’s value is the slot’s size and square foot of the lot. The more rooms and bathrooms that a house has can help to raise the value of the home. Knowing the floor area or FAR of the property will tell you if space has room for extensions, which can be another factor in the value. 
  • Condition: Just like your exterior, the appraiser will go over the inside of your home with a fine-tooth comb. The flooring, kitchen, plumbing, electrical, and lighting are all components that your appraiser will be assessing.
  • Improvements: Your appraiser can also help you determine what might need to be updated to increase your home’s value. Renovating a bathroom or adding an HVAC system can add years of life to the property, which helps increase the value. 

Who Receives the Appraisal Information?

The final verdict will be gathered by your appraiser and at the disposal of who ordered it; this is usually the lender. It is then up to them how the information is distributed, regardless of who paid for it. If the buyer asks for an appraisal, the lender is obligated by law to release that information. Your appraisal is valid for six months, but market prices can change quickly. Many lenders will only consider an appraisal to be valid for about three months. Any changes to the market or the property can drastically alter the value price. 

Concerns over China’s econ Echo in NY Real Estate

yuan kevin brunnockRecent headlines from the financial sector have been directly tied to the real estate market in New York. Early last week, the Chinese government made a shocking move of devaluing their currency by 1.9 percent against the US dollar. This move marks the most significant single-day reduction in value in over twenty years. 1994 was the last time that China underwent a comparable markdown. The intention behind this devaluation of the renminbi appears to be to reduce capital outflows from China and essentially encourage Chinese investors to keep their resources exclusively in the Chinese markets.

Over the past year or so, China’s economy has slowed somewhat and the central Chinese bank responded by cutting interest rates to help lending and in turn ignite some positive movement in a floundering economic atmosphere.  However, this move decreased ROI on domestic bonds so investors focused their energy and allocated more resources in other countries.

The New York real estate market proved to be one of the sectors abroad that benefitted tremendously from the influx of attention from Chinese investors. Although the devaluation of the Chinese currency does nothing to change the ROI for Chinese investors investing within China, it does mean that New York real estate just got more expensive for these Chinese investors.

It is important to keep in mind however, that while this devaluation of the Chinese currency will impact individual investors, major Chinese companies will likely be shielded from the repercussions of this action. For example, Greenland Holdings and Xinyuan Real Estate  (both listed on Hong Kong and New York stock exchanges) earn a sizable portion of their monetary resources through selling stocks and bonds that are dollar denominated outside of China, meaning there is no conversion from Yuan to USD necessary. This is a major boon for larger Chinese corporations and for the New York real estate market dependent on resources from these foreign investors.

However, it remains to be seen how independent investors from China will proceed in the New York market if they don’t have any assets to leverage that don’t require currency conversions. On face-value, the outlook may not be great, but there are some who believe otherwise. According to economist at the Brookings Institution, David Dollar, this devaluation won’t have a huge effect on Chinese investment in the U.S. He instead believes that, “The question is where the currency goes from here.”  While he acknowledges that,  “There could start to be a devaluation trend,” Dollar does, “… not think that is likely.” Only time will tell!