Evans Appraisal Services has answers to "Frequently Asked Questions"
Define the term "Appraisal" Define the term "Appraisal" (List of questions)The appraisal process is an evaluation that produces an opinion of value. This opinion or estimate is concluded using a formal process that generally utilizes three "common approaches to value". One of the processes is the Cost Approach - which is how much capital would be required to replace the improvements, minus physical deterioration and other factors, then adding the land value. Easily the most common approach in figuring the value of a home is the Sales Comparison Approach which deals with figuring a comparison to comparable homes nearby. Being the most common approach, the Sales Comparison Approach is generally the most accurate and best indicator of market value for a residential property. The Income Approach is generally used for finding the market value of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in.What does an appraiser do? (List of questions)An appraiser produces a fair and credible assessment of market value, to be used in making real estate transactions. Appraisers present their professional conclusions in appraisal reports.What would cause me to need services from Evans Appraisal Services? (List of questions)There are a lot of reasons to obtain an appraisal from Evans Appraisal Services with the most common reason being real estate and mortgage transactions. Other reasons for getting an appraisal report include:
How is an appraisal different than a home inspection? (List of questions)The appraiser is not a home inspector and he or she does not do a comprehensive home inspection. An inspection is a third-party evaluation of the livable structure and electrical and mechanical systems of a house, from the top to the bottom. Usually, a home inspection report will explain the amenities and the requirements of the home: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.What is the difference between an appraisal and a comparative market analysis (CMA)? (List of questions)Simply put, it's like comparing broadband and dial-up. The CMA uses market trends to generate most of their business. The appraisal is reliant on similar valid comparable sales. Also, the appraisal verifies other factors like condition, area and building prices. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.Who's creating the report is frankly the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to accept a previously agreed upon fee for assignments, regardless of their outcome. What can I expect to see in my appraisal report? (List of questions)Each report should indicate a credible value opinion and should clearly state the following:
After completing the appraisal, how can I have confidence that the value indicated is veritable? (List of questions)In the documentation of an appraisal, each appraiser must make sure of the following:
Who hires Evans Appraisal Services (List of questions)Mortgage lenders are an appraiser's typical client, needing their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also hire appraisers for divorce and estate settlements.Where does an appraiser get the information used to estimate values in Berks County or other areas? (List of questions)One of the primary things an appraiser does is to compile property data. Data can be described as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.General data is gathered from a numerous places. To research recently sold homes to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. To verify actual sales prices, we research tax records and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood servers. And last but not least, the appraiser assimilates general data from his or her collective knowledge gained from doing assignments for other properties in the same market. What can a full appraisal do for me? (List of questions)If you're making any kind of financial decision and the value of your home is relevant, you'll want an appraisal. If you're selling your home, an appraisal will help you determine the most appropriate price. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. Simply put, a home 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? (List of questions)PMI is short for for Private Mortgage Insurance. This additional policy guards the lender if a borrower is unable to pay on the loan and the market price of the home is less than what the borrower still owes on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.
Should I do anything in advance of the appraisal inspection (List of questions)The first step in most appraisals is the property inspection. During this process, we will come to your home and measure it, determine the layout of the rooms inside, confirm all aspects of the home's general condition, and take several photos of your house for inclusion in the report. Inside, pick up any clutter and make sure we can get to things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of outside walls.You can make things go faster and improve the accuracy of the appraisal report by having the following things on hand:
What is "Market Value?" (List of questions)In real estate appraising, Market Value is commonly defined as:
Who has rights to the appraisal report? (List of questions)For mortgage transactions, the lender orders the appraisal, either directly or through a third party. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is entitled to a copy of the report - 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.The exception to this rule is when a home owner hires an appraiser directly. In these cases, the appraiser may define how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can use the appraisal for any purpose. How can I get the most ROI out of home improvements? (List of questions)Like all things real estate, this is dependent on a home's location. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.No matter where you go, however, renovating a kitchen is almost always a safe move. According to one national survey, kitchen remodels returned an average of 88% of the investment. In other words, a $10,000 kitchen remodeling project would add approximately $8,800 to the value of the home. Bathrooms are right up there with kitchens, returning 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating. |
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