Quality Appraisal Solution and Services has answers to "Frequently Asked Questions"
What is an appraisal?
What is an appraisal?(Top) An appraisal is an investigation leading to an opinion of value. The real estate appraiser will use a number of "approaches," typically three, to arrive at the estimation of market value. The Cost Approach is one of the methods that real estate appraisers use to find value; it involves concluding what the improvements would cost minus physical degradation, adding the land value. Easily the most common approach in finding the likely sales price of a house is the Sales Comparison Approach which involves concluding a comparison to comparable homes close by. Being the most popular approach, the Sales Comparison Approach tends to be the most precise and best indicator of market value for a property. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it deals with estimating what an investor would pay based on the money generated by the property.
Describe what an appraiser does(Top) An appraiser generates a professional, unbiased assessment of market value, often in the context of a real estate purchase. Appraisers present their professional conclusions in appraisal reports.
What would cause me to require your services?(Top) There are many reasons to order an appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for getting an report include:
Is an appraisal the same as a comparative market analysis(CMA)?(Top) Simply, they have nothing in common. What the CMA relies upon are ill-defined trends. An appraisal is based on comparable sales that can be verified by public record. The appraisal report will also contain neighborhood and construction values. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
But the biggest difference is who's doing the report. Real estate agents produce CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, California licensed professional who bases a career on valuing real estate in and around Ventura County creates the appraisal. 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 collect only a previously agreed upon fee for work they perform, regardless of their value conclusion.
After completing the report, what guarantee is there that the final number is veritable?(Top) In the documentation of an appraisal, each appraiser must ensure the following:
Who employs appraisers?(Top) Most of the time, appraisers are called upon by lenders to estimate the value of a home involved in a loan transaction. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.
Where does an appraiser get the data used to estimate values in Ventura County or other areas?(Top) Compiling data is one of the primary things an appraiser does. Data can be divided into Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.
General data is received from a variety of sources. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood servers.
And most importantly, the appraiser assembles general data from his or her collective knowledge gained from doing assignments for other properties in the same market.
How can a licensed appraiser help me?(Top) Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. For those selling a home, you'll want to figure out a price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. When buying, you can avoid overpaying by commissioning an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. Simply put, a house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.
My mortgage statement has an item on it for PMI? Can I get rid of that?(Top) PMI is an acronym for Private Mortgage Insurance. PMI covers the lender in the event a borrower is unable to pay on the loan and the market price of the home is lower 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.
Do you need anything from me in advance?(Top) We begin 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 status of its amenities. Inside, make sure it is clutter free and that we can access 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.
To help expedite our work plus ensure a more accurate report, attempt if possible to have the following items:
How does an appraiser define "Market Value"?(Top) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Who has rights to the appraisal report?(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 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 hires an appraiser directly. In these scenarios, the appraiser may state 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.
Are some home improvements more worthwhile than others?(Top) It really depends on the market. 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.
As a rule, the best ROI from renovating a home comes in the kitchen. 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%. On the contrary, work that may not add value would be painting just for the sake of redecorating.