Charlotte Brady has answers to "Frequently Asked Questions"
Define the term "Appraisal"
Define the term "Appraisal"(Top) The procedure of producing an appraisal deals with an investigation which leads to an opinion of value. There are three "common approaches to value" which assists the real estate appraiser come to 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 without physical deterioration, plus the land value. Easily the most common approach in figuring the value of a house is the Sales Comparison Approach which deals with figuring a comparison to similar properties close by. Generally speaking, the Sales Comparison Approach is the most accurate indicator of market value of a residential property. One of the least common approaches in appraising houses is the Income Approach, which is commonly used to find the value of a property based on what an investor would pay based on the capital produced by the building.
Describe what an appraiser does(Top) An appraiser offers a professional, unbiased assessment of market value, often in the context of a real estate purchase. Appraisers reveal the details of their professional investigation in appraisal reports.
What are the reasons I would need your services?(Top) There are a lot of reasons to get an appraisal from Charlotte Brady with the usual reason being real estate and mortgage transactions. Other reasons for purchasing an appraisal include:
What is the difference between an appraisal and a comparative market analysis (CMA)?(Top) Simply, they have nothing in common. The CMA utilizes market trends to create most of their business. The appraisal relies on specific proven comparable sales. In addition, the appraisal checks other factors like condition, area and replacement prices. 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 most significant factor is who's behind the report. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. 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 accept a previously agreed upon sum for work they perform, regardless of their value conclusion.
After completing the report, what guarantee is there that the final number is legitimate?(Top) In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
Who do appraisers work for?(Top) Typically, appraisers are hired by lenders to render a value opinion on 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 information used to estimate values in Deschutes County or other areas?(Top) One of the primary activities of an appraiser is to collect property data. Data can be described as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.
General data is collected from a numerous places. To look up recent sales to be used as "comps", an appraiser will often use the local Multiple Listing Service. Tax records and other courthouse documents reveal 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 assimilates general data from his or her past experience in creating appraisals for other houses in the same market.
What can a full appraisal do for me?(Top) An appraisal is a worthwhile anytime your home's value is relevant to some financial decision. For those selling a home, you'll want to determine the 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. 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. A home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.
What exactly is PMI and how can I get rid of it?(Top) PMI is the common abbreviation for for Private Mortgage Insurance. PMI protects the lender in case a borrower defaults on the loan and the market price of the property is lower than what is owed on the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.
Does the appraiser need anything from me in advance?(Top) We begin with an inspection of the home. 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. On the home's interior, pick up any clutter and make sure we can access things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of exterior 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 (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 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.
It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these situations, the appraiser may state the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can use the appraisal for any purpose.
How can I get the most ROI out of home improvements?(Top) Like all things real estate, this is dependent on a home's location. For example, installing 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 increase your value would be painting just for the sake of redecorating.