Precision Appraisal & Review has answers to "Frequently Asked Questions"
What is an appraisal? What is an appraisal? (Top)An appraiser provides an evaluation that produces an opinion of value. There are three "common approaches to value" which assists the real estate appraiser arrive at this opinion or valuation. The Cost Approach is one of the processes that appraisers use to find value; it involves concluding what the improvements would cost less physical degradation, adding the land value. Another of the approaches is the Sales Comparison Approach - which deals with discovering a comparison to other similar properties within a close proximity which have recently sold. Being the most common approach, the Sales Comparison Approach tends to be the most accurate and best indicator of market value for a home. One of the least common approaches in appraising houses is the Income Approach, which is mainly used to find the market value of a property based on what an investor would pay based on the income produced by the property.Describe what an appraiser does (Top)An appraiser generates a fair and credible opinion of market value, in the support of real property exchanges. Appraisers document their professional conclusions in appraisal reports.Why would a person require services from Precision Appraisal & Review? (Top)There are many reasons to get an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal include:
How is an appraisal different than a home inspection? (Top)Appraisers do not do perform house inspections and are not home inspectors. The point of a home inspection is to investigate the structure of the house from basement to top. The general property inspector's report will include an evaluation of the integrity of the property's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.Is an appraisal the same as a comparative market analysis(CMA)? (Top)Frankly, it's like comparing Shakespeare to reality TV. The CMA relies on vague market trends. Appraisals use similar sales which are verifiable resources. The appraisal report will also include location and building values. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.The person creating the report is hands down the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, create CMA's. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a flat fee for work they perform, regardless of their outcome. What are the contents of an appraisal report? (Top)Each appraisal should indicate a supported estimate of value and will clearly state the following:
Once the assignment has been delivered, what assurance is there that the value indicated is accurate? (Top)In communicating an appraisal report, each appraiser must ensure the following:
Who are an appraiser's customers? (Top)Typically, appraisers are employed by lenders to render a value opinion on real estate involved in a loan transaction. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.Where does Precision Appraisal & Review get the information used to estimate values in Wayne and Monroe County or other areas? (Top)Compiling information is one of the primary functions of an appraiser. Data can be divided into Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.General data is gathered from a number of places. To research recent sales to be used as "comps", we typically go to the local Multiple Listing Service. To double-check actual sales prices, we use tax records and other public documents that are usually online nowadays. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood product. And last but not least, the appraiser assimilates general data from his or her past experience in creating appraisals for other houses in the same market. How can a licensed appraiser help me? (Top)An appraisal is a valuable tool anytime your home's value is pertinent to some financial decision. For those selling a home, you'll want to figure out the price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from Precision Appraisal & Review is the best way to ensure assets are split up evenly. A house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.My mortgage statement has an item on it for PMI? Can I get rid of that? (Top)PMI is short for for Private Mortgage Insurance. This additional policy takes care of the lender in the event a borrower defaults on the loan and the value of the house is less than the balance of the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.
How do I get ready for the appraiser? (Top)The first step in most appraisals is the property inspection. What this entails is the appraiser, after setting up an appointment, personally going through the home - recording the layout of the rooms, taking photos and documenting the general condition of its features. On the home's interior, make sure it is clutter free and that we can find our way to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of outside walls.To help expedite our work plus ensure a more accurate report, try if possible to have the following items:
What does "Market Value" mean? (Top)In real estate appraising, Market Value is commonly defined as:
Once complete, who actually owns the appraisal report? (Top)For mortgage transactions, the lender orders the appraisal, either directly or through a third party. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The buyer is certainly entitled to a copy of the appraisal - it's usually bundled with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.This rule doesn't apply when a home owner engages an appraiser directly. In these scenarios, the appraiser may define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can do whatever they want with the appraisal. Which home renovations add the most to the price? (Top)The answer to this is different depending upon the location of the home. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.No matter where you go, however, renovating a kitchen is almost always a safe move. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms are right up there with kitchens, returning 85%. Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size. |
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