Corrections or additions?
This article by Kathleen McGinn Spring was prepared for the
April 18, 2001 edition of U.S. 1 Newspaper. All rights reserved.
Value, In the Appraiser’s Eye
After a decade and a half in the residential real
estate appraisal business, Beth Ogilvie-Freda decided to go out on
her own last year, in good measure so that she could cut her hours
and spend more time with her two young children. It didn’t work out
quite that way.
"Now is a crazy time in the business," she says. "Things
are selling in under a month. In under a week. Even before they hit
the MLS." Where not long ago six months on the market was
reasonable, now "if a house doesn’t sell in a month, it starts
to get stale." The rate of activity quickly turned her part-time
business into a full-time venture, where rapidly escalating prices
make accurate appraisal more difficult than it has been in years.
Appraisal is crucial to Ogilvie-Freda’s clients, lenders that supply
mortgages that turn an offer to buy a home into a sale. It is a key
support for the mortgage application, letting lenders know what amount
the house would most likely fetch on the market should the homeowner
default on his loan. Appraisers, who are certified by the state, are
behind-the-scenes players, but their input can mean the difference
between a closing or a cratered deal. Buyers, sellers, and real estate
agents are frozen in place while the appraiser goes about his or her
Ogilvie-Freda’s work most often begins right after a buyer and seller
agree on a price and sign a contract. When a buyer contacts a lender,
the lender calls upon an appraiser like Ogilvie-Freda to put a value
on the house. In this market, determining the true value of a house
is no easy job.
"Assessments used to be helpful," Ogilvie-Freda says. "But
now, assessed values are so independent of market value." Going
to one of the meticulously organized filing cabinets in her
home office, she pulls out details on recent appraisal jobs.
a $182,000 sale price," she says. "The assessment is $86,000.
Here’s another one. Assessment, $74,800. Sale price, $188,500."
In many area towns the value the tax office put on a house remained
close to what a buyer would pay throughout the 1990s. More recently,
however, Ogilvie-Freda has seen the market propel sale prices in an
arc way above the values tax appraisers found just a few years ago.
Comparable sale data, the touchstone guide for appraisers, is trickier
to use now, too. "I appraised a house in February,"
says. "It had been sold just eight months before. The sale price
was 13 percent higher than it had been the last time, and the owners
had done nothing to it." It can take months from the time a
is signed to the time the sales price hits public records. In this
overheated market, says Ogilvie-Freda, the information is already
outdated by then.
It becomes clear the job is much more complex than counting bathrooms
and fireplaces, and noting peeling paint. Appraising is a science,
for sure, but also a highly social art, involving the ability to
observe the dynamics of communities, to tease information from a
of sources, and, yes, to bond with real estate agents.
A 1982 graduate of Princeton High School, Ogilvie-Freda went off to
Bryn Mawr (Class of 1986) to study biology. But, like many college
students, Ogilvie-Freda needed some cash, so she took a part-time
job in Bryn Mawr with Donald J. Reape and Associates, a group of
When she graduated, they offered her a full-time job, and she
After five years with her original employer,
joined TRW/Real Estate Loan Services, rising to the position of chief
appraiser and managing Pennsylvania, Delaware, and New Jersey. After
a year with that company, she and a former colleague from Donald J.
Reape founded Independence Appraisal Corporation in Saint Davids,
Pennsylvania. Finding the commute too much, she joined Valuation
Information Technology, working from her home office.
Ogilvie-Freda resigned from Valuation last June to spend more time
with her children. Soon, however, clients began to call and she
to start her own business. She does only residential appraisal for
lenders, valuing houses that are being sold or refinanced. Right now,
the bulk of her work falls into the former category, but sometimes
it is the other way around. She has done valuations on homes that
were being condemned to make way for a new highway, and on rare
is called in to value a house where an owner and his real estate agent
can’t come up with a mutually agreeable listing price. Other
spend their time giving evidence in court, but she says expert witness
work is not for her.
She is married to Mark Freda, a vice president with Goldman Sachs,
who, until recently, served as a Princeton Borough councilman. A
for 13 years, Freda decided "something had to go,"
says, when their second child was born two years ago at about the
same time he began commuting to New York City several days a week.
Ogilvie-Freda met her husband when she was a high school student,
and they both volunteered for Princeton’s Rescue Squad. Her mother,
Hilary Hays, is a psychologist who works in the Princeton University
counseling center and also has a private practice. Her step-father,
Hugh Cline, is a sociologist.
Ogilvie and Freda were married in 1988. Their daughter, Rebecca, is
in kindergarten at the Littlebrook School in Princeton, and does her
schoolwork at a desk right next to her mother’s. Their son, Alex,
is two. The Freda-Ogilvie family lives in Princeton Borough, near
the township line, in a house they have remodeled and expanded
but not, Ogilvie-Freda says emphatically, with any thought of raising
its appraised value. "The enjoyment of a home can’t be
But many other things — from the quality of the
tiles on the roof to the moisture in the basement — can be
and it’s Ogilvie-Freda’s job to take note of all of them. But, even
more important than noting the details is fitting them into a broader
For appraisers this picture becomes clear through comparing a house
with others of its ilk — comparables. In a simple world, if two
nearby homes of similar size and condition recently sold for $210,000,
the house under scrutiny would have a value of approximately $210,000.
Deciding just what is comparable, though, is the great challenge.
"It’s very rare you get down to apples and apples," says
In a new housing development comprised entirely of five bedroom
with three-car garages, each sitting on half-an-acre of treeless,
former potato field, the job is pretty straightforward. But even
a house that faces a busy street is not completely comparable to one
that sits at the end of a cul-de-sac.
Finding comparables in a development, though, is a snap compared with
finding the matches in a town like Princeton, where a single street
may include everything from a 1,200 square-foot, 50-year-old Cape
Cod with its original pink-tiled kitchen to a soaring 5,000
glass-walled contemporary. These leafy streets of cottages and
are especially challenging to appraisers because, Ogilvie-Freda says,
"first, you consider the neighborhood." In residential
it’s that mother of all real estate cliches — location, location,
A three-bedroom ranch in Hamilton will have a different value than
one in Pennington. Pick that house up and put it in the western
of Princeton, and it would have a different value than it would have
just few miles away, near the Princeton Shopping Center. The house
could be worth more if it were within walking distance of top-ranked
schools, or less if it were in a mixed commercial/residential section
that included, say, a strip club.
These factors, and so many more, make picking comparables nearby the
way to go — if possible. But it is not always possible.
I have to go out of the neighborhood to find a comparable,"
says. When there are no recent sales of similar houses near the
house, she turns to sections of town — or a nearby town —
that are the most similar. Among the factors she considers are traffic
patterns, and walking distance to shopping, schools, and services.
Often, when nearby comparables are slim, she "mixes and
using one close neighbor, and other houses from a different part of
town. In those cases, she may use more comparables — perhaps three
or four, instead of two — to establish a value.
Asked the most difficult house for which she had to find a match,
Ogilvie-Freda says: "A one-bedroom mill house in Trenton on one
acre of ground. It was historically certified; it was right on the
canal. It had everything." Everything, that is, but anything even
vaguely resembling a mate nearby. When she gets jobs like this,
says she likes to go away and think a bit. "I have to wait; I
have to digest those for a little while." In the case of the
mill house in Trenton, she had to cross the city line, and go into
nearby Ewing Township to find comparables.
The current bidding-war real estate environment enters into the choice
of comparables, too, making it important to gather sale price data
well before it makes it into online databases. Here, it helps to be
intimately familiar with the area, and to have friends in the know.
If Ogilvie-Freda finds out there is there is a sale pending, she often
can call the real estate agent involved to get the number, thereby
netting a fresh comparable to gauge the value of any nearby sales.
Homes offered FSBO, for sale by owner, also are
sources of comparables, but information on the sale prices of these
homes does not go into MLS databases. Ogilvie-Freda sees an increasing
trend toward this type of sale, and uses FSBO comparables when she
can. They are especially crucial in neighborhoods made up of a melange
of houses in many different styles, sizes, and states of repair.
Recently she was appraising a two-family house in the tree street
section of Princeton. "Houses are all very different there, block
by block," she says. She needed to find comparables, and recalled
seeing a FSBO sign on a house on Linden Lane not long before. "It
was a two-family she says, and there aren’t many two families."
"I knew I had done it before," she says of the house. "I
had all the interior information." When she drove by the house,
the FSBO sign was gone. "I went to Borough Hall to see if it had
closed," she says. Sure enough, it had, and she had netted her
comparable. "It was very helpful," she says.
Establishing comparables is the most difficult part of residential
appraisal in most cases. After these similar houses with a recent
sale in their background are found, it is a matter of adjusting the
subject house’s valuation up or down. Factors that add to, or detract
from, the final appraisal number include amenities, condition, size,
number of rooms, and position on a block.
Ogilvie illustrates by pulling out an appraisal form for a house near
her own, in the area on the north side of Harrison Street in Princeton
Borough near the shopping center. The subject house, a four bedroom
Colonial, was new construction, a rare thing in Princeton Borough.
One of the comparables she chose was a 50 year-old house in Princeton
Township. The borough and township share schools and other important
services, and Ogilvie-Freda says there is little difference between
them in housing values.
She added $15,000 to the price of the subject house, as compared with
the older house, for its youth. It also got $5,000 for an extra
$3,000 for a fireplace, and $10,000 for a one-car garage. It lost
$1,000 for a slightly smaller lot — .03 acres smaller, to be
It also lost $16,500, figured at $36 a square foot, for being smaller
inside. A location facing traffic knocked off another $10,000.
Ogilvie-Freda hastens to explain that these amounts are figured on
a percentage basis for location elements. The subject house, and its
comparables, are valued at something over $400,000. You wouldn’t take
the same $10,000 from an $80,000 house that faces traffic, she says.
Adjustments for amenities are more straightforward, but still involve
as much art as science. In some neighborhoods, for example, decks
or pools or three-car garages, are the norm, and a house without one
could be adjusted downward more than the same house in a neighborhood
where these amenities are rare. And a house with a small brick
in a neighborhood of two-story-high fieldstone fireplaces would get
a smaller upward adjustment, as would a house with a gas fireplace
in a neighborhood of wood-burning fireplaces.
Homeowners have long been told that installing a pool — at least
in the Northeast — is iffy in terms of the value it adds to a
house, and Ogilvie-Freda confirms this. "If the pool takes up
the whole backyard, it could be a negative," she says, especially
in neighborhoods that draw families with small children. If, on the
other hand, it sits in the ground on a large lot separated from the
house, it could add value.
Another iffy amenity, at least in terms of appraised value, is
that can cost a mint and adds tremendously to curb appeal.
is such a gray area," Ogilvie-Freda says of all those rose gardens
and perennial beds. "It takes a lot of maintenance," she
"It can depreciate very quickly if you don’t maintain it."
It is her job to look out for the mortgage company’s interest, she
says, and while there is insurance to cover "anything that goes
drastically wrong inside the house," ornamental bushes come with
no such guarantee. "I give landscaping some value," she says,
"but not a whole lot."
Along with making adjustments for amenities, or lack
of same, appraisers take condition into account. And once again, it
all comes down to knowing the area. "Average," says
"means average for the neighborhood." If a spit-polish
is the norm for the block, that’s what it takes to earn
Going all the way up to "good," the highest rating, would
require exceptional condition. But a house that earned only a
the step below average, in an upscale neighborhood of carefully-tended
homes, could go a notch or two higher in a less house-proud part of
The time required to gather, keep track of, and transmit all this
data has been cut in half in the 16 years she has been in the
Ogilvie-Freda says. "I used to have to develop photos, manually
do sketches, manually compute square footage, manually do the
she says. Once upon a time, way back in the ’80s, she even had to
hire a typist. Back then, rather than looking up comparables on the
computer, "I used comp books that were so out of date," she
says. "I’m 50 percent more efficient now that everything is done
electronically." Everything she needs, all the information sources
and all the tools needed to produce and send reports, are now online
or on software.
Still, she doesn’t tote a laptop along as she does appraisals,
to schedule appointments back to back and then draw up reports when
she gets home. Some appraisers have added laptops to their field kits,
though, she says. On the other end of the technology scale are a
of appraisers who "still do sketches manually." Some even
avoid digital cameras, preferring to shoot and develop film, she says,
smiling at the thought of this quaint ’90s technology.
Throughout her career, Ogilvie-Freda has done only residential
and most of her work as been for conventional lenders, but she done
some work for FHA mortgages and also for relocation companies that
are buying an employee’s house ahead of a move. "The FHA has
requirements," she says. "There are condition requirements;
they are very safety conscious." The biggest issue with FHA
she finds, is peeling paint. The lead can pose a danger to children,
and the FHA requires that it be replaced before closing. "I did
one," she says, "where there was chipping paint all around
the windows." The buyer said he was putting on vinyl windows.
Still, she had to write her appraisal subject to the paint being
Of the buyer’s reaction in that case she says, "Nobody likes a
Relocation appraisals pose difficulties of their own. "The
companies have two or three appraisals done," Ogilvie-Freda says.
They want to make very sure they are paying no more for the
employee’s house than it will fetch in the market.
In a straight what-the-market-will-fetch-sale, not directed by a
company or regulated by a government agency, there are pressures too.
Many parties have an interest in the apppraisal. Among them are the
real estate agents. If an appraisal comes in below the sale price
agreed to in a contract, the mortgage, the sale — and the agent’s
commission, could go out the window.
When she does appraisals, "the realtor meets me at the door,"
Ogilvie-Freda says. In her experience, some appraisers have an
relationship with realtors, but she says she is happy to have their
input. A key to her good relationship with realtors, she says, is
that she does her research first, arriving at the house already
about comparable sales in the neighborhood.
Then she asks agents and brokers if they know of anything that could
affect the market value of the house, perhaps a pending sale on a
comparable. "A lot of agents bring me information," she says.
Beyond their personal interest in seeing the sale go through, real
estate agents have a powerful force on their side, especially in this
market. If the buyer seeking the mortgage can’t get it, "there
are five more waiting behind him," Ogilvie says. "It’s hard
to ignore the hard fact of what things are selling for," she says.
And the bottom line is that the market value of a house is what a
buyer will pay.
Still, Ogilvie-Freda does occasionally come in with an appraisal that
is lower than the price offered for a house. "It’s no fun to cut
a value," she says. "I agonize. I exhaust all my
So involved was she in her work, in the career that came to her by
accident, that "I identified myself as a professional
Ogilvie-Freda says. Gradually, however, a new thought occurred: "I
don’t want my obituary to read `appraiser,’" she says. Spurred
on by this realization, she is including new interests in her life.
Already on Princeton’s Community Housing Board, where she is active
in working for affordable housing for lower income Princeton residents
and workers, she took a master gardener course through the Mercer
County Extension Service. She hopes to use her newfound skill to help
landscape Elm Court II, a low income housing complex to be built next
to Elm Court.
She is passionate about the need for affordable housing in Princeton.
One of her brothers, Bob Ogilvie, an ETS employee, who is deaf and
aphasic, lives in an affordable condominium. "If programs like
this weren’t in effect, he wouldn’t be able to live in the
she says. "It means so much to our family." In general, she
says, a starter home for a family in Princeton now costs between
and $350,000, well beyond the reach of many people who grew up in
Princeton, and who work there.
While landscaping Elm Court II, which has yet to be built, is still
in the future, Ogilvie-Freda is helping Littlebrook kindergarten
create a memorial garden for the late John Simone, a longtime
resident and the school’s custodian.
In another new endeavor, Ogilvie-Freda just took up cycling so she
could participate in a 350-mile bike ride from West Point to Boston
to raise money for AIDS research. She will be riding with her brother,
Bradley Ogilvie, a counselor in a Chicago resident AIDS community,
and her step-father. The family decided that whoever didn’t ride would
stay home to watch the children. "`I’ll ride!’" she reports
her step-father quickly volunteering, so her mother is the default
babysitter. Her husband will ride along on his Harley-Davidson
as part of the riders’ assistance team.
Back home, Ogilvie-Freda lives in a fast changing community, where
the value of a house truly is whatever prospective neighbors put on
it. Young families, she says, are eager to move into her neighborhood,
in many cases taking the place of owners who occupied the houses in
the ’50s, back when they were new construction. Just two houses near
her home have `For Sale’ signs outside. And both of have had `Sold’
added to the bottom. Around the corner, where Princeton Borough
becomes Township, astoundingly large homes are rising from the shells
of much more modest dwellings.
Even as far afield as Trenton, site of that unique one-bedroom mill
house, homes are moving fast in a number of neighborhoods,
says, giving Glen Afton, Hiltonia, Villa Park, "and even
as examples. She says the real estate market is different now than
it was during the last boom period. "In the late ’80s people
see that the market was going to correct itself," she says.
know now, but they want the house anyway."
— Kathleen McGinn Spring
Corrections or additions?
This page is published by PrincetonInfo.com
— the web site for U.S. 1 Newspaper in Princeton, New Jersey.