Miles Hamrick Appraisal Services, Inc. has answers to "Frequently Asked Questions"
Describe an appraisal Describe an appraisal (Top)An appraiser performs an evaluation that leads to an opinion of value. There are three "common approaches to value" which assists the appraiser conclude this opinion or valuation. The Cost Approach is one of the processes that real estate appraisers use to find the value of a property; it involves finding what the improvements would cost minus physical deterioration, adding the land value. Another of the approaches is the Sales Comparison Approach - which involves finding a comparable analysis to other similar properties within a close proximity which have recently sold. The Sales Comparison Approach is commonly the most accurate and clearest indicator of value for a house. The third approach is the Income Approach, which is the best method in appraising income producing properties - it involves estimating what an investor would pay based on the income generated by the property.What does an appraiser do? (Top)An appraiser forumlates an impartial and well supported determination of market value, in the support of real estate transactions. Appraisers document their investigation in appraisal reports.What would cause me to need a real estate appraisal? (Top)There are a lot of reasons to get an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for purchasing an report include:
How is an appraiser different than a home inspector? (Top)Appraisers do not do complete home inspections and are not home inspectors. The point of a home inspection is to evaluate the structure of the property from bottom to rooftop. Usually, a home inspection report will explain the amenities and the requirements of the house: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural integrity 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)? (Top)Simply put, it's night and day. The CMA utilizes market trends to generate most of their business. An appraisal relies on comparable sales that can be validated by records. Also, the appraisal verifies other factors like condition, area and replacement costs. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.But the largest differentiator is the person creating the report. Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Moreover, the appraiser is an independent voice, with no vested interest in the property's value, unlike the real estate agent, whose income is tied to the value of the home. What are the contents of an appraisal report? (Top)Every report must reflect a credible estimate of value and should clearly state the following:
Upon completion of the appraisal, how can I have a guarantee that the final number is accurate? (Top)In the documentation of an appraisal, each appraiser must make sure of the following:
Who engages the services of appraisers? (Top)Mortgage lenders are an appraiser's most likely customer, requesting their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also hire appraisers for asset division and estate settlements.Where does Miles Hamrick Appraisal Services, Inc. get the information used to estimate values? (Top)One of the main tasks an appraiser must accomplish is to collect 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 received from a variety of places. Local Multiple Listing Services (MLS) provide data on recently sold homes that could be used as comparables. Tax records and other public documents verify actual sales prices in a market. Appraisers often need to report when a property lies in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product. And last but not least, the appraiser gathers general data from his or her collective knowledge gained from creating appraisals for other properties in the same market. Why should I hire a licensed appraiser? (Top)Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. If you're selling your house, an appraisal will help you determine a price that maximizes profit and reduces time on the market. When buying, be sure you're not overpaying by getting an independent appraisal. 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. Don't make decisions in the dark with a professional appraisal.What exactly is PMI and how can I get rid of it? (Top)PMI is an acronym for Private Mortgage Insurance. This additional plan takes care of the lender if a borrower is unable to pay on the loan and the value of the property is lower than what is owed on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.
Do you need anything from me in advance? (Top)The first step in most appraisals is the property inspection. During this process, the appraiser 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. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and relocate any items that would make it difficult to measure the structure. On the inside, make sure we can easily access items like furnaces and water heaters.To help speed things along plus ensure a more accurate report, attempt if possible to have the following items:
What does "Market Value" mean? (Top)In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Does the appraisal belong to the bank or the consumer? (Top)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 bundled with all the other closing documents - but is not allowed 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. I want to get more for my house. Where should I spend money renovating? (Top)A home's location - what city it is in and even what part of that city - is key to this popular question. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range wantNo 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, yielding 85%. Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size. |