Custom Residential Architects Network

This message has been cross posted to the following Discussion Forums: Project Delivery and Custom Residential Architects Network .
-------------------------------------------
Custom Residences are very difficult to build, especially in today's economic climate. It's hard enough to find people willing to spend more on a custom residence and even harder to find a bank willing to lend them money. I don't know if any of you have noticed how low appraisals are coming in these days, but I know for a fact sales have steadily gone up over the last few years in my area, yet this year appraisals are coming in suspiciously lower. Perhaps the appraisers are just being more conservative? OR maybe it's more is going on under the hood.

Appraisal Reform should be the top agenda for Architects, especially Residential Architects. The only houses that can boost property value in a neighborhood are the ones that just sold. Only a Speculative House can sell for the highest value per sf simply because they are the only houses that are sold as NEW. My favorite builder and I used to build many unique Speculative Houses and have almost a decade's worth of a track record of selling the most expensive houses in the area. If you know anything about how a bank determines how much they are willing to lend your clients, you know that the Value placed on your project is based on the average of the most recent sales of "Comparable" properties  in your area (AKA Comps). When you provide the highest Comps in your area, your next project is averaged against your competitors. It is impossible to get an appraisal to equal your own sales history if you're always providing the highest Comps. The guy building the cheapest, mass produced box is getting appraisals that far exceed their sales history when they get to leach off of your more successful sales. The system is designed to work against providing better quality projects while reward the ones that are least desirable, meaning the ones that sell for the least. This is the chief reason why the majority of houses built in this country are terrible, mass produced boxes. The bane of our existence. Not only does this deter better design, but it affects Sustainability, not because the people don't want it, but because it's near impossible to finance a house that costs more to build than what the Speculative Builders are already providing in your area. We can either convince the Speculative Builders to do a better job OR we can fight to change this moronic system of assigning value based on how well your competitors are doing.

Now it's hard enough to believe a lousy Spec House is valued the most per sf, but the Custom Residences we provide often are viewed as over priced because when they do sell, they're sold at USED prices because they are typically sold long after they are built and lived in by the owners that hire us. A Custom Residence designed by a professional Architect for an end user has no way of contributing to the value of the neighborhood. That is, until it eventually sells. The problem here is that OUR residences are often taxed at the highest mileage rate because they are unique for the area. At least this is what's happening to my clients. So my clients are contributing to the value of the neighborhood in the form of the highest property tax rate, yet the Real Estate Appraiser for the bank does not acknowledge these properties when it comes to determining the value of a loan for our next project. Is this not TAXATION WITHOUT REPRESENTATION? 

I have a client who built the first truly unique house for the area. It inspired many of my other clients to build nicer houses and other Architects are now designing innovative houses for the area. This is quite an accomplishment considering how closed minded the South East can be about modern design. When this client went to sell their house due to a job loss, they were infuriated by the low appraisals they were given after paying the highest mileage rate for property taxes. There was about a 20% difference in the Tax Assessor's Appraisal vs the Bank's Appraisal. Now that both spouses are working again and they were able to build a new house, they didn't want to pay taxes on another unique house, so they had me design a farm house this time.

I have another client who asked me to design a $1.3 million house and they have been given the run around by several large banks. They are paying for $700K out of pocket and decided to begin construction without securing the loan (wife is pregnant and doesn't want to wait) They are mostly completely framed now and yet another bank has backed out. The new houses of 1/2 the size are selling for about $700K. This means the bank would only have to sell the house for $600K if they default. Someone would get a very good deal paying $600K-$700K for a $1.3 million house, yet the banks can't stomach the project because it's different. They refuse to look at the track record of the builder and I as far as OUR sales are concerned. They are far more interested in the recent sales of our competitors who have a handful of lesser quality mass produced houses in the area, while we have built nearly 70 unique projects of various size, configuration, etc. Everyone of our projects has done very well at market, but they want to look at the mass produced houses that our competitor's just sold instead to determine the most likely price the house would sell for.

The system is designed to end our profession and turn people off to new and exciting design. The system must be changed and we must quit lying around and letting this non-sense happen. It's no accident that regular people live in awful houses. It's not that they have bad taste. It's because we're not paying attention to the financing aspect of the business. It's because system encourages a race to the bottom. 

I can't start a revolution by myself (and I've been trying), so for the sake of design and Architecture, let's do something about this! 

APPRAISAL REFORM SHOULD BE OUR TOP AGENDA ITEM!!!
   
-------------------------------------------
Eric Rawlings AIA
Owner
Rawlings Design, Inc.
Decatur GA
-------------------------------------------

Valuable insights.  Thanks.  The real estate notion of "resale value" suppresses innovative design.

Conrad

-------------------------------------------
Conrad Skinner AIA
Conrad Skinner Design LLC
Santa Fe NM
-------------------------------------------






Show Original Message -------------------------------------------
Original Message:
Sent: 06-29-2012 19:40
From: Eric Rawlings
Subject: Appraisal Reform - #1 Agenda for Architects

This message has been cross posted to the following Discussion Forums: Project Delivery and Custom Residential Architects Network .
-------------------------------------------
Custom Residences are very difficult to build, especially in today's economic climate. It's hard enough to find people willing to spend more on a custom residence and even harder to find a bank willing to lend them money. I don't know if any of you have noticed how low appraisals are coming in these days, but I know for a fact sales have steadily gone up over the last few years in my area, yet this year appraisals are coming in suspiciously lower. Perhaps the appraisers are just being more conservative? OR maybe it's more is going on under the hood.

Appraisal Reform should be the top agenda for Architects, especially Residential Architects. The only houses that can boost property value in a neighborhood are the ones that just sold. Only a Speculative House can sell for the highest value per sf simply because they are the only houses that are sold as NEW. My favorite builder and I used to build many unique Speculative Houses and have almost a decade's worth of a track record of selling the most expensive houses in the area. If you know anything about how a bank determines how much they are willing to lend your clients, you know that the Value placed on your project is based on the average of the most recent sales of "Comparable" properties  in your area (AKA Comps). When you provide the highest Comps in your area, your next project is averaged against your competitors. It is impossible to get an appraisal to equal your own sales history if you're always providing the highest Comps. The guy building the cheapest, mass produced box is getting appraisals that far exceed their sales history when they get to leach off of your more successful sales. The system is designed to work against providing better quality projects while reward the ones that are least desirable, meaning the ones that sell for the least. This is the chief reason why the majority of houses built in this country are terrible, mass produced boxes. The bane of our existence. Not only does this deter better design, but it affects Sustainability, not because the people don't want it, but because it's near impossible to finance a house that costs more to build than what the Speculative Builders are already providing in your area. We can either convince the Speculative Builders to do a better job OR we can fight to change this moronic system of assigning value based on how well your competitors are doing.

Now it's hard enough to believe a lousy Spec House is valued the most per sf, but the Custom Residences we provide often are viewed as over priced because when they do sell, they're sold at USED prices because they are typically sold long after they are built and lived in by the owners that hire us. A Custom Residence designed by a professional Architect for an end user has no way of contributing to the value of the neighborhood. That is, until it eventually sells. The problem here is that OUR residences are often taxed at the highest mileage rate because they are unique for the area. At least this is what's happening to my clients. So my clients are contributing to the value of the neighborhood in the form of the highest property tax rate, yet the Real Estate Appraiser for the bank does not acknowledge these properties when it comes to determining the value of a loan for our next project. Is this not TAXATION WITHOUT REPRESENTATION? 

I have a client who built the first truly unique house for the area. It inspired many of my other clients to build nicer houses and other Architects are now designing innovative houses for the area. This is quite an accomplishment considering how closed minded the South East can be about modern design. When this client went to sell their house due to a job loss, they were infuriated by the low appraisals they were given after paying the highest mileage rate for property taxes. There was about a 20% difference in the Tax Assessor's Appraisal vs the Bank's Appraisal. Now that both spouses are working again and they were able to build a new house, they didn't want to pay taxes on another unique house, so they had me design a farm house this time.

I have another client who asked me to design a $1.3 million house and they have been given the run around by several large banks. They are paying for $700K out of pocket and decided to begin construction without securing the loan (wife is pregnant and doesn't want to wait) They are mostly completely framed now and yet another bank has backed out. The new houses of 1/2 the size are selling for about $700K. This means the bank would only have to sell the house for $600K if they default. Someone would get a very good deal paying $600K-$700K for a $1.3 million house, yet the banks can't stomach the project because it's different. They refuse to look at the track record of the builder and I as far as OUR sales are concerned. They are far more interested in the recent sales of our competitors who have a handful of lesser quality mass produced houses in the area, while we have built nearly 70 unique projects of various size, configuration, etc. Everyone of our projects has done very well at market, but they want to look at the mass produced houses that our competitor's just sold instead to determine the most likely price the house would sell for.

The system is designed to end our profession and turn people off to new and exciting design. The system must be changed and we must quit lying around and letting this non-sense happen. It's no accident that regular people live in awful houses. It's not that they have bad taste. It's because we're not paying attention to the financing aspect of the business. It's because system encourages a race to the bottom. 

I can't start a revolution by myself (and I've been trying), so for the sake of design and Architecture, let's do something about this! 

APPRAISAL REFORM SHOULD BE OUR TOP AGENDA ITEM!!!
   
-------------------------------------------
Eric Rawlings AIA
Owner
Rawlings Design, Inc.
Decatur GA
-------------------------------------------

-------------------------------------------
Edward Cazayoux FAIA
Principal/architect
EnvironMental Design
Breaux Bridge LA
-------------------------------------------

I all with Eric - sign me up for the revolution.  You cannot get a professional appraisal for the good architecture that is built.  Well insulated and tight envelope - nothing, low-E glass - nothing, geothermal heat pump - nothing, extra toilet or chandler - bingo.  As Eric said - the architects bring the appraisals up that only the spec housing can take advantage of.  So the money is to be made doing spec housing as the lowest cost possible for the maximum profit.  No wonder americal architecture is finding this balancing act or midean way below good design to make a difference.  It is the results of being built into this melting pot system.  Or is this happening all over the world - developed world?

Regardless, the way banks work is not to our advantage or more important, out client's.  We need to build our revolution numbers so our voice can be heard.  I suggest that this be a nonviolent revolution - until we cannot take it anymore.  I encourage everyone, who cares, to sign up with Eric.




Show Original Message -------------------------------------------
Original Message:
Sent: 06-29-2012 19:40
From: Eric Rawlings
Subject: Appraisal Reform - #1 Agenda for Architects

This message has been cross posted to the following Discussion Forums: Project Delivery and Custom Residential Architects Network .
-------------------------------------------
Custom Residences are very difficult to build, especially in today's economic climate. It's hard enough to find people willing to spend more on a custom residence and even harder to find a bank willing to lend them money. I don't know if any of you have noticed how low appraisals are coming in these days, but I know for a fact sales have steadily gone up over the last few years in my area, yet this year appraisals are coming in suspiciously lower. Perhaps the appraisers are just being more conservative? OR maybe it's more is going on under the hood.

Appraisal Reform should be the top agenda for Architects, especially Residential Architects. The only houses that can boost property value in a neighborhood are the ones that just sold. Only a Speculative House can sell for the highest value per sf simply because they are the only houses that are sold as NEW. My favorite builder and I used to build many unique Speculative Houses and have almost a decade's worth of a track record of selling the most expensive houses in the area. If you know anything about how a bank determines how much they are willing to lend your clients, you know that the Value placed on your project is based on the average of the most recent sales of "Comparable" properties  in your area (AKA Comps). When you provide the highest Comps in your area, your next project is averaged against your competitors. It is impossible to get an appraisal to equal your own sales history if you're always providing the highest Comps. The guy building the cheapest, mass produced box is getting appraisals that far exceed their sales history when they get to leach off of your more successful sales. The system is designed to work against providing better quality projects while reward the ones that are least desirable, meaning the ones that sell for the least. This is the chief reason why the majority of houses built in this country are terrible, mass produced boxes. The bane of our existence. Not only does this deter better design, but it affects Sustainability, not because the people don't want it, but because it's near impossible to finance a house that costs more to build than what the Speculative Builders are already providing in your area. We can either convince the Speculative Builders to do a better job OR we can fight to change this moronic system of assigning value based on how well your competitors are doing.

Now it's hard enough to believe a lousy Spec House is valued the most per sf, but the Custom Residences we provide often are viewed as over priced because when they do sell, they're sold at USED prices because they are typically sold long after they are built and lived in by the owners that hire us. A Custom Residence designed by a professional Architect for an end user has no way of contributing to the value of the neighborhood. That is, until it eventually sells. The problem here is that OUR residences are often taxed at the highest mileage rate because they are unique for the area. At least this is what's happening to my clients. So my clients are contributing to the value of the neighborhood in the form of the highest property tax rate, yet the Real Estate Appraiser for the bank does not acknowledge these properties when it comes to determining the value of a loan for our next project. Is this not TAXATION WITHOUT REPRESENTATION? 

I have a client who built the first truly unique house for the area. It inspired many of my other clients to build nicer houses and other Architects are now designing innovative houses for the area. This is quite an accomplishment considering how closed minded the South East can be about modern design. When this client went to sell their house due to a job loss, they were infuriated by the low appraisals they were given after paying the highest mileage rate for property taxes. There was about a 20% difference in the Tax Assessor's Appraisal vs the Bank's Appraisal. Now that both spouses are working again and they were able to build a new house, they didn't want to pay taxes on another unique house, so they had me design a farm house this time.

I have another client who asked me to design a $1.3 million house and they have been given the run around by several large banks. They are paying for $700K out of pocket and decided to begin construction without securing the loan (wife is pregnant and doesn't want to wait) They are mostly completely framed now and yet another bank has backed out. The new houses of 1/2 the size are selling for about $700K. This means the bank would only have to sell the house for $600K if they default. Someone would get a very good deal paying $600K-$700K for a $1.3 million house, yet the banks can't stomach the project because it's different. They refuse to look at the track record of the builder and I as far as OUR sales are concerned. They are far more interested in the recent sales of our competitors who have a handful of lesser quality mass produced houses in the area, while we have built nearly 70 unique projects of various size, configuration, etc. Everyone of our projects has done very well at market, but they want to look at the mass produced houses that our competitor's just sold instead to determine the most likely price the house would sell for.

The system is designed to end our profession and turn people off to new and exciting design. The system must be changed and we must quit lying around and letting this non-sense happen. It's no accident that regular people live in awful houses. It's not that they have bad taste. It's because we're not paying attention to the financing aspect of the business. It's because system encourages a race to the bottom. 

I can't start a I by myself (and I've been trying), so for the sake of design and Architecture, let's do something about this! 

APPRAISAL REFORM SHOULD BE OUR TOP AGENDA ITEM!!!
   
-------------------------------------------
Eric Rawlings AIA
Owner
Rawlings Design, Inc.
Decatur GA
-------------------------------------------

Eric,

I'm w/ you 1000 percent. I am a Junior Designer, offering myself as a foot soldier in service of making this a top agenda item of our profession until we succeed in redressing this wrong.

What can I do to help?

A.D.

-------------------------------------------
Anthony Davis [A.D.] Assoc. AIA
Englewood NJ
-------------------------------------------






Show Original Message -------------------------------------------
Original Message:
Sent: 06-29-2012 19:40
From: Eric Rawlings
Subject: Appraisal Reform - #1 Agenda for Architects

This message has been cross posted to the following Discussion Forums: Project Delivery and Custom Residential Architects Network .
-------------------------------------------
Custom Residences are very difficult to build, especially in today's economic climate. It's hard enough to find people willing to spend more on a custom residence and even harder to find a bank willing to lend them money. I don't know if any of you have noticed how low appraisals are coming in these days, but I know for a fact sales have steadily gone up over the last few years in my area, yet this year appraisals are coming in suspiciously lower. Perhaps the appraisers are just being more conservative? OR maybe it's more is going on under the hood.

Appraisal Reform should be the top agenda for Architects, especially Residential Architects. The only houses that can boost property value in a neighborhood are the ones that just sold. Only a Speculative House can sell for the highest value per sf simply because they are the only houses that are sold as NEW. My favorite builder and I used to build many unique Speculative Houses and have almost a decade's worth of a track record of selling the most expensive houses in the area. If you know anything about how a bank determines how much they are willing to lend your clients, you know that the Value placed on your project is based on the average of the most recent sales of "Comparable" properties  in your area (AKA Comps). When you provide the highest Comps in your area, your next project is averaged against your competitors. It is impossible to get an appraisal to equal your own sales history if you're always providing the highest Comps. The guy building the cheapest, mass produced box is getting appraisals that far exceed their sales history when they get to leach off of your more successful sales. The system is designed to work against providing better quality projects while reward the ones that are least desirable, meaning the ones that sell for the least. This is the chief reason why the majority of houses built in this country are terrible, mass produced boxes. The bane of our existence. Not only does this deter better design, but it affects Sustainability, not because the people don't want it, but because it's near impossible to finance a house that costs more to build than what the Speculative Builders are already providing in your area. We can either convince the Speculative Builders to do a better job OR we can fight to change this moronic system of assigning value based on how well your competitors are doing.

Now it's hard enough to believe a lousy Spec House is valued the most per sf, but the Custom Residences we provide often are viewed as over priced because when they do sell, they're sold at USED prices because they are typically sold long after they are built and lived in by the owners that hire us. A Custom Residence designed by a professional Architect for an end user has no way of contributing to the value of the neighborhood. That is, until it eventually sells. The problem here is that OUR residences are often taxed at the highest mileage rate because they are unique for the area. At least this is what's happening to my clients. So my clients are contributing to the value of the neighborhood in the form of the highest property tax rate, yet the Real Estate Appraiser for the bank does not acknowledge these properties when it comes to determining the value of a loan for our next project. Is this not TAXATION WITHOUT REPRESENTATION? 

I have a client who built the first truly unique house for the area. It inspired many of my other clients to build nicer houses and other Architects are now designing innovative houses for the area. This is quite an accomplishment considering how closed minded the South East can be about modern design. When this client went to sell their house due to a job loss, they were infuriated by the low appraisals they were given after paying the highest mileage rate for property taxes. There was about a 20% difference in the Tax Assessor's Appraisal vs the Bank's Appraisal. Now that both spouses are working again and they were able to build a new house, they didn't want to pay taxes on another unique house, so they had me design a farm house this time.

I have another client who asked me to design a $1.3 million house and they have been given the run around by several large banks. They are paying for $700K out of pocket and decided to begin construction without securing the loan (wife is pregnant and doesn't want to wait) They are mostly completely framed now and yet another bank has backed out. The new houses of 1/2 the size are selling for about $700K. This means the bank would only have to sell the house for $600K if they default. Someone would get a very good deal paying $600K-$700K for a $1.3 million house, yet the banks can't stomach the project because it's different. They refuse to look at the track record of the builder and I as far as OUR sales are concerned. They are far more interested in the recent sales of our competitors who have a handful of lesser quality mass produced houses in the area, while we have built nearly 70 unique projects of various size, configuration, etc. Everyone of our projects has done very well at market, but they want to look at the mass produced houses that our competitor's just sold instead to determine the most likely price the house would sell for.

The system is designed to end our profession and turn people off to new and exciting design. The system must be changed and we must quit lying around and letting this non-sense happen. It's no accident that regular people live in awful houses. It's not that they have bad taste. It's because we're not paying attention to the financing aspect of the business. It's because system encourages a race to the bottom. 

I can't start a revolution by myself (and I've been trying), so for the sake of design and Architecture, let's do something about this! 

APPRAISAL REFORM SHOULD BE OUR TOP AGENDA ITEM!!!
   
-------------------------------------------
Eric Rawlings AIA
Owner
Rawlings Design, Inc.
Decatur GA
-------------------------------------------