Taylor Appraisal Service has answers to "Frequently Asked Questions"
What is an appraisal?
What is an appraisal?(List of questions) An appraisal is an estimation that concludes with an opinion of value. There are three "common approaches to value" which assists the real estate appraiser come to this opinion or estimate. One of the processes is the Cost Approach - which is how much capital would be required to replace the improvements, less physical deterioration and other factors, plus the land value. Another of the processes is the Sales Comparison Approach - which involves discovering a comparable analysis to other similar properties within a close proximity which have recently sold. The Sales Comparison Approach is normally the most definitive and best indicator of a liklely sales price for a residence. One of the least common approaches in appraising residential properties is the Income Approach, which is generally used to find the value of a property based on what an investor would pay based on the income produced by the property.
Describe what an appraiser does(List of questions) An appraiser offers a professional, unbiased assessment of market value, in the support of real estate exchanges. Appraisers exhibit their findings in appraisal reports.
What would cause me to request a real estate appraisal?(List of questions) There are a lot of reasons to get an appraisal from Taylor Appraisal Service with the usual reason being real estate and mortgage transactions. Some other reasons for getting an appraisal include:
What is the difference between an appraisal and a home inspection? (List of questions)Appraisers do not do complete home inspections and are not home inspectors. The purpose of a home inspection is to investigate the structure of the house from bottom to attic. The stereotypical house 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.
My agent performed a CMA for me. Is that the same as an appraisal?(List of questions) To be honest, they have nothing in common. The CMA uses market trends to create most of their business. An appraisal utilizes comparable sales that can be verified by public record. Also, the appraisal looks at other factors like condition, location and replacement costs. All a CMA does is generate a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.
The person creating the report is frankly the most significant difference between a CMA and an appraisal. Real estate agents produce CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, state licensed professional who has formed a career on valuing real estate in and around Marshall County creates the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon fee for work they perform, regardless of their outcome.
What does the appraisal report contain? (List of questions)The main objective of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, you'll usually see the following:
Upon completion of the appraisal, what assurance is there that the value indicated is accurate?(List of questions) In communicating an appraisal report, each appraiser must ensure the following:
Who hires an appraiser?(List of questions) Typically, appraisers are hired by mortgage lenders to estimate the value of real estate involved in a loan transaction - to make sure the house is truly adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.
Where does Taylor Appraisal Service get the data used to estimate values in Marshall County or other areas?(List of questions) One of the main tasks an appraiser performs is to compile property data. Data can be divided into Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.
General data is received from a numerous sources. To look up recently sold homes to be used as "comps", we typically go to the local Multiple Listing Service. Tax records and other public documents reveal actual sales prices in a market. Flood zone data is retrieved 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 properties in the same market.
How can a licensed appraiser help me?(List of questions) If you're involved in some sort of financial decision and the value of your home is relevant, you'll want to hire a licensed appraiser. If you're selling your house, an appraisal will help you determine the most appropriate price. When buying, you can avoid overpaying by getting an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. 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?(List of questions) PMI is an acronym for Private Mortgage Insurance. This additional plan covers the lender if a borrower doesn't pay on the loan and the market price of the home is less than what is owed on 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.
Should I do anything in advance of the appraisal appointment(List of questions) We start with an inspection of the property. 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 amenities. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any bushes and relocate any items that would make it difficult to measure the structure. On the inside, make sure we can easily access appliances like furnaces and water heaters.
You can make things go faster and improve the accuracy of the appraisal report by having the following things on hand:
How does an appraiser define "Market Value"?(List of questions) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Who actually owns the appraisal report?(List of questions) In most real estate transactions, the appraisal is ordered by the lender. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is certainly entitled to a copy of the report - it's usually included with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.
It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these cases, the appraiser may state 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 do whatever they want with the appraisal.
Are some home improvements more worthwhile than others?(List of questions) The added value of a particular amenity truly depends on the local market. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!
As a rule, the best ROI from renovating a home comes in the kitchen. 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 were second, returning 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.