Parkway Appraisals has answers to "Frequently Asked Questions"
Define the term "Appraisal"
Define the term "Appraisal"(Back to top) An appraisal is an evaluation that concludes with an opinion of value. The appraiser will typically use a number of "approaches," typically three, to arrive at the estimation of market value. The Cost Approach is one of the approaches that appraisers use to find the value of a home; it involves concluding what the improvements would cost without physical degradation, adding 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. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a house. One of the least common approaches in appraising homes 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 income produced by the property.
What does an appraiser do?(Back to top) An appraiser offers a professional, unbiased assessment of market value, often in the context of a real estate purchase. Appraisers summarize their conclusions in appraisal reports.
What are the reasons I would request services from Parkway Appraisals?(Back to top) There are many reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for ordering an report include:
Is an appraisal the same as a home inspection? (Back to top)Home inspectors do not generate an opinion of value and do not use the same forms as appraisers. The point of a home inspection is to evaluate the structure of the home from basement to top. The stereotypical property inspector's report will include an evaluation of the condition of the property's heating system, 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.
Is an appraisal the same as a comparative market analysis(CMA)?(Back to top) Honestly, they have nothing in common. What the CMA depends on are vague trends. The appraisal is based on specific proven comparable sales. Also, the appraisal looks at other factors like condition, area and construction prices. 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.
But the largest differentiator is who's creating the report. Real estate agents write CMA's, and they don't always know the whole market or have 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 unbiased voice, with no conditional interest in the property's value, unlike the agent, who gets a commission based upon the price of the home.
What does the appraisal report contain? (Back to top)Every report must demonstrate a supported value opinion and should clearly state the following:
Upon completion of the appraisal, how can I have assurance that the final number is veritable?(Back to top) In communicating an appraisal report, each appraiser must ensure the following:
Who do appraisers work for?(Back to top) Most of the time, appraisers are called upon by lenders to render a value opinion on a house 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 Ashe County or other areas?(Back to top) Compiling information is one of the main tasks an appraiser engages in. Data can be categorized as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.
General data is collected from a number of sources. To research recently sold homes to be used as "comps", we often use the local Multiple Listing Service. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers often need to report when a property is in a flood zone, and 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 houses in the same market.
How can a licensed appraiser help me?(Back to top) If you're making some sort of financial decision and the value of your home matters, you'll want an appraisal. If you're selling your home, an appraisal assists you in setting the most appropriate price. 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. 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?(Back to top) PMI is an acronym for Private Mortgage Insurance. It guards the lender if a borrower defaults on the loan and the market price of the property is less than what the borrower still owes on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.
How do I get ready for the appraiser?(Back to top) The first step in most appraisals is the property inspection. 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 access things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of exterior walls.
You can make our visit go faster and improve the accuracy of the appraisal report by having the following things on hand:
Define "Market Value"(Back to top) In real estate appraising, Market Value is commonly defined as:
Does the appraisal belong to the bank or the consumer?(Back to 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 included with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.
The exception to this rule is when a home owner hires an appraiser directly. 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 stated otherwise, the home owner can do whatever they want with the appraisal.
Which home renovations add the most to the price?(Back to top) This really depends on where the home is. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes
No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 help the value of your home (when done well) as long as your home doesn't then become an oddball for your neighborhood in terms of size.