Blue Heron Appraisal Services has answers to "Frequently Asked Questions"
Describe an appraisal (List of questions)An appraiser performs an evaluation that generates an opinion of value. The real estate appraiser must use a few "approaches," typically three, to come to the estimation of market value. 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 comparison to other similar properties within a close vicinity which have recently sold. The Sales Comparison Approach is normally the most accurate and best indicator of a liklely sales price for a house. One of the least common approaches in appraising homes is the Income Approach, which is mainly 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 produces a fair and credible opinion of market value, often in the context of a real estate exchange. Appraisers demonstrate their professional analysis in appraisal reports.What would cause me to need your services? (List of questions)There are a lot of reasons to get an appraisal from Blue Heron Appraisal Services with the usual reason being real estate and mortgage transactions. A few other reasons for getting an appraisal report include:
Is an appraisal the same as a home inspection? (List of questions)No. Home inspectors do not figure out an opinion of value and do not do appraisal reports. A third-party home inspector will judge the structure of the house, from the top to the foundation. Usually, a home inspection report will evaluate the amenities and the requirements of the property: 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 visible structures.Is an appraisal the same as a comparative market analysis(CMA)? (List of questions)Simply put, it's apples and oranges. The CMA utilizes market trends to create most of their business. An appraisal is based on comparable sales that can be validated by records. Location and building prices are also precedent in an appraisal. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.The person behind the report is actually 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 bear specific competence when it comes to home valuation. A certified, North Carolina licensed professional who has formed their livelihood on valuing real estate in and around Currituck County is behind 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 accept a previously agreed upon sum for assignments, regardless of their value conclusion. What are the contents of an appraisal report? (List of questions)The main objective of an appraisal report 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:
Once the report is done, how can I have certainty that the value conclusion is veritable? (List of questions)In the documentation of an appraisal, each appraiser must make sure of the following:
Who hires an appraiser? (List of questions)Commonly, appraisers are called upon by mortgage lenders to estimate the value of a house involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.Where does Blue Heron Appraisal Services get the data used to estimate values in Currituck County or other areas? (List of questions)One of the primary activities of an appraiser is to collect data. Data can be described as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.General data is gathered from a number of sources. To look up recently sold homes to be used as "comps", we typically use the local Multiple Listing Service. To double-check actual sales prices, we use tax records and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood service. 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? (List of questions)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 determine a price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. When buying, be sure you're not 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. Without knowing its real value, wise financial decisions are impossible.What exactly is PMI and how can I get rid of it? (List of questions)PMI is short for for Private Mortgage Insurance. This added policy covers the lender in case a borrower defaults on the loan and the value of the home is less than the loan balance. 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 the homeowner in advance? (List of questions)We begin with an inspection of the property. 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. In the yard, trim any landscaping so we can be free to get an accurate measurement of outside walls.The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
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) 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 included with all the other closing documents - but is not entitled 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 situations, 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 use the appraisal for any purpose. Are some home improvements more worthwhile than others? (List of questions)It really depends on the market. For example, if you're in a neighborhood of small to medium priced homes, a media room may not be something people in that price range want.No matter where you go, however, renovating a kitchen is often a safe investment. 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%. Adding bedrooms and baths can also help the value of your home (when done well) as long as your home doesn't then become overbuilt for your neighborhood in terms of size. |
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