GREETINGS FROM VERNA ACKER
REALTY EXECUTIVES Elite
414.534.7400
FOR YOUR INFORMATION:
Real Estate Information from Western Racine County; Waterford, WI 53185
October 3, 2000

TABLE OF CONTENTS
*Appraisers & Appraisals

Dale Peterson of Peterson & Associates, LLP, has provided the following discussion on appraisals. His web site is: http://www.peterson-assoc-llp.com. You can e-mail to Dale and/or Chad at dalep@peterson-assoc-llp.com. Dale has been in the appraisal business for many years. His office is in Burlington. I am sure that he will be glad to answer any questions that you might have.

WHAT IS AN APPRAISAL?
An appraisal is defined as an opinion of value by professional appraisal standards (Uniform Standards of Professional Appraisal Practice). Appraisers consider appraising to be both part art and part science. You probably already have an opinion of the value of your home. Your opinion and a professional appraiser's may be the same. But appraisers are required to be objective and impartial in their analyses and opinions. A professional appraiser has been trained in appraisal methodology and looks at how your home compares with current sales of homes similar to yours. The appraiser also considers other factors like price trends, proximity to commercial, industrial, income properties and numerous other factors. He/She must comply with all professional appraisal standards and presents these findings to the client in a comprehensive written report.

WHAT IS THE DIFFERENCE BETWEEN AN APPRAISER AND A REAL ESTATE AGENT?
Real Estate Agents are for the most part sales persons. They provide a form of an appraisal called a broker's price opinion to assist sellers with their listing presentations. Typically no fees are charged for this service.

Most sellers get three (3) to four (4) broker price opinions before putting their home on the market. If the owner finds a wide spread in these opinions it is highly recommended that they obtain an appraisal. Reputable Broker/Salespersons will even recommend an appraisal if there is a big difference in these opinions. An appraisal is a necessity if you are going to try and sell your home by yourself.

WHO CAN DO AN APPRAISAL?
In the state of Wisconsin anyone can do an appraisal for non- lending purposes. However, only state licensed and/or certified appraisers are subject to discipline by the state regulatory agency. Most lending institutions, especially those adhering to federal regulations, use only state licensed or certified appraisers.

WHY DO SOME APPRAISERS WALK THROUGH MY HOUSE AND OTHERS JUST DRIVE BY?
The type of appraisal needed for a mortgage loan depends on many risk factors, such as loan to value ratios, loan amount, borrower's credit, etc. This determination is made by your lending institution. Some loans may be made using your real estate tax bill with no “human” appraiser involved.

CAN I USE THE APPRAISAL WITH ANOTHER LENDER?
Sometimes appraisals can be transferred to another lender. The original lender must release the appraisal to the new lender. Please understand, the original lender is not obligated to do this for you. The appraisal must also be relatively recent, normally no more than six(6) months old. Under current regulations, the appraiser cannot give the appraisal to another lender.

WHO OWNS THE APPRAISAL?
The appraisal is “owned” by the client who ordered it (who called the appraiser). If the lender ordered it, even though you paid for it, it is the property of the lender. If you ordered the appraisal, typically for non- lending purposes, you own it. By Federal Law, you are entitled to a copy of the appraisal from your lender. Most lenders require your request in writing and have you sign a release. Under the ethics provision of the Uniform Standards of Professional Appraisal Practice, the appraiser is not able to give you a copy nor discuss any part of the appraisal with you.

WHEN DO YOU NEED YOUR OWN APPRAISER?
When getting a mortgage loan, the lender typically orders the appraisal. That does not mean you can't request a certain appraiser; an appraiser that you feel confidence in. On other occasions property owners, buyers, sellers, or their attorneys often hire appraisers for determining a fair sale price, divorce, estates, gifts, property disputes, eminent domain, PMI removal, contesting tax assessments, partnership dissolution, etc.

WHAT SHOULD I LOOK FOR IN HIRING AN APPRAISER?
You need to consider the purpose of the appraisal, the type of property and the experience of the appraiser. Choose an appraiser carefully. If it is for lender related actions such as PMI removal, a first mortgage or a second mortgage, talk with your lender. Make sure your choice is on their approved list. Don't be afraid to interview the appraiser. Make sure you are comfortable with the individual that will be entering your home.

If it is for non-lending purposes, select an appraiser with experience in the area you are requiring. If it is for tax purposes, be sure to select a well-qualified appraiser to minimize the hassles with the IRS. Using a state licensed or certified appraiser, at a minimum, is a very good idea. Make sure the appraiser is well known with many years of experience, knowledge and expertise in your area of concern. You will be happy you did in the long run. Appraisals are not cheap. Make sure you don't have to do it twice.

PETERSON & ASSOCIATES, LLP, is a full time property appraisal firm serving Racine, Kenosha and Walworth Counties. We make it easy to order your appraisal 24 hours a day, 7 days a week. You can call out office at 262.763.8161, Fax your order to 262.763.8860 or fill out the easy order form provided for your convenience at our web site, http://www,peterson-assoc-llp.com. CAN WE BE OF SERVICE TO YOU!!

Verna's Note:
In every profession there are some who are better than others and some that do their job with more credibility than others. Appraisal work is no different. When you order your appraisal or the lender orders it, be sure to question whether or not they are accustomed to doing appraisals in the area of your property. Not long ago I had a buyer do an e-loan. The loan was being processed in California. They told me that they had Wisconsin appraisers. When questioned, however, the young lady I spoke to had no idea where Racine County was!! Also, when you get your appraisal, take a minute to drive by the comparable that are used to establish value. It isn't difficult to see if the comparables are like your property or not. It is important! Recently I saw an appraisal that used a 4 level “mansion” of nearly 5,000 s.f. in a subdivision of homes that were all newer and in the $450,000-$900,000 range as a “comp” for an older 3 family home with business zoning. The value of the document you are paying for depends upon the credibility and professionalism of the appraiser. Also, never forget that sometimes the buying public may not agree with the value opinion of an appraiser. Just because the appraiser says a number, doesn't mean that the buying public will agree. This is especially true if your property has features that are not typical or a location that may not be considered typical.

GREETINGS FROM VERNA ACKER
REALTY EXECUTIVES Elite
414.534.7400
FOR YOUR INFORMATION:
Real Estate Information from Western Racine County; Waterford, WI 53185
October 11, 2000

TABLE OF CONTENTS
Credit Scoring

CREDIT SCORES
Undisclosed Numeric Ratings Determine Loans For Individuals Just three little digits can determine whether you receive a new credit card, a car loan, or a home mortgage, and what interest rate you will pay. Yet credit scores are not generally disclosed to consumers, and some lawmakers are pushing to change that. Legislation is being proposed that would require credit bureaus to disclose to consumers all the information in their files, including credit scores. In California, the first-ever state bill to do so has cleared the legislature and is awaiting Gov. Gray Davis' signature. Similar measures have been proposed in New York and Tennessee. The legislation has support from consumer groups, Realtors, and lawmakers.

Factors Used to Calculate Credit Scores by Fair, Isaac and Co., Inc:

PAST PAYMENT HISTORY
*Account payment information on specific types of accounts (credit cards, retail accounts, mortgages, installment loans, etc.)
*Presence of adverse public records, such as bankruptcy filings, legal judgements, lawsuits, liens against property and wage attachments, collection actions and delinquent payments
*How long delinquent payments were past due
*Amount past due on delinquent account or in collection actions
*Time elapsed since past due items, adverse public records or collection actions occurred
*Number of past-due items on file
*Number of accounts paid as agreed

AMOUNT OF CREDIT OWED
*Total amount owed on accounts
*Amounts owed on specific types of accounts
*Number of accounts with money owed
*Proportion of credit lines used
*Proportion of installment loan amounts still owed

LENGTH OF TIME CREDIT ESTABLISHED
*Time elapsed since accounts opened
*Time elapsed since accounts opened, by specific types of accounts
*Time elapsed since most recent account activity

SEARCH FOR AND ACQUISITION OF CREDIT
*Number of recently opened accounts and proportion of total accounts that are recently opened
*Number of recent applications by consumer for new credit
*Time elapsed since recent account openings by types of accounts.
*Time elapsed since application for credit
*Re-establishment of positive credit history following past payment problems

TYPES OF CREDIT ESTABLISHED
*Number of specific types of accounts

Perhaps the most common known as the FICO model (shown above), r ates consumers as credit risks on a scale from 300 to 900. A range of about 620-640 is often considered a “passing” grade; below that level, consumers are denied credit or offered “sub-prime” loans at higher interest rates.

The criteria for rating consumers include past payment history of all types of accounts, incidences of delinquent payments, amount of money owed to creditors in relation to income and length of time credit has been established.

MY NOTE: I understand that you are also penalized if your record shows that you have checked your credit rating, etc. on your existing accounts or if you have connected with a credit bureau recently to check your status.

GREETINGS FROM VERNA ACKER
REALTY EXECUTIVES Elite
414.534.7400
FOR YOUR INFORMATION:
Real Estate Information from Western Racine County; Waterford, WI 53185
October 17, 2000

TABLE OF CONTENTS
Chimney Linings

What if the home you are buying is only 12 years old, yet the inspector finds the brick lining of the fireplace coming loose? In this situation, all of the mortar is crumbling. Wouldn't you expect a fireplace to last much longer than 12 years? What could be the problem?

ANSWER: This situation is common and could be due to the absence of a chimney cap. In many areas, metal caps are not required on masonry chimneys, but they should be. Chimneys generally develop a coating of creosote on their inner linings. That is why we hire chimney sweeps. When rainwater mixes with creosote, a mild acid is formed. This solution gradually seeps into the masonry lining, neutralizing the alkaline bond in the mortar.

RESULT: The mortar begins to weaken and disintegrate.

SOLUTION: To prevent this degenerative process, the installation of an approved chimney cap is recommended. In the meantime, avoid using the fireplace until it has been evaluated by a certified chimney sweep.

NOTE: This information was provided by Don Melton of HouseMaster Home Inspections. I recommend Don frequently and many of the customers and clients that I have referred his way have expressed their pleasure regarding the work he does. He can be reached at 1-800-767-3131. Don serves Southeastern Wisconsin.

GREETINGS FROM VERNA ACKER
REALTY EXECUTIVES Elite
414.534.7400
FOR YOUR INFORMATION:
Real Estate Information from Western Racine County; Waterford, WI 53185
October 31, 2000
HAPPY HALLOWEEN!!!!!

TABLE OF CONTENTS
1031 Exchange

*Taken from the 1031 EXCHANGE NEWSLETTER
The Expression 1031 exchange refers to an Internal Revenue Code section numbered 1031. In summary, this law says that if investment property is exchanged for like-kind investment property then capital gains will not have to be paid in the year of the exchange.

Like-kind has been broadly defined by the IRS to include ANY kind of real estate for ANY other kind of real estate. For instance, an apartment building can be traded for a farm or a mobile home park can be traded for a warehouse. In this regard, real estate is a very special investment tool because very few other investments can be exchanged with this flexibility.

The use of 1031 allows the property owner/exchanger to change the shape of their real estate investment. Perhaps the owner wants an investment that is easier to manage. Maybe they want an investment that provides better cash flow. Perhaps they would want a property yet to be developed. Use of a 1031 exchange allows the owner to meet their changing needs while at the same time having no present tax liability from the exchange. It's a great tool.

Here is the rule of thumb to follow: If no tax liability is to be incurred, the owner must trade equal or greater both equity and fair market value. This means that all cash received from the relinquished property must be used a down payment on the replacement property. And, the replacement property must be equal or larger in fair market value to the relinquished property. From: www.1031x.com For more newsletters go to: http://www.1031x.com/newsletters.cfm

NOTE: For a complete manual on the 1031 exchange, go to my web site at http://www.vernacker.com. I went to an attorney's seminar. The attorney who did the presentation gave me permission to post the manual in its entirety. Use the search engine to locate it.