Dewar Appraisal Services has answers to "Frequently Asked Questions"
Define the term "Appraisal"
Define the term "Appraisal"(List of questions) An appraiser provides an evaluation that leads to an opinion of value. This opinion or estimate is concluded using a formal method that commonly utilizes the three main "common approaches to value". One of the processes in use is the Cost Approach, which evaluates what it would cost to replace the improvements to the house, minus depreciation and physical deterioration, adding the land value. The Sales Comparison Approach deals with searching for comparable homes in the vicinity and figuring out the value based on making a comparison of those prior sales to the house being investigated. The Sales Comparison Approach is normally the most definitive and clearest indicator of a liklely sales price for a home. One of the least common approaches in appraising houses is the Income Approach, which is mainly used to determine the market 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 determination of market value, often in the context of a real estate exchange. Appraisers present their professional analysis in appraisal reports.
What would cause me to request your services?(List of questions) There are many reasons to purchase an appraisal from Dewar Appraisal Services with the most common reason being real estate and mortgage transactions. Some other reasons for obtaining an appraisal include:
Is an appraisal the same as a home inspection? (List of questions)The appraiser is not a home inspector and does not do a comprehensive home inspection. A third-party home inspector will inspect the structure of the house, from the roof to the bottom. Generally, 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 capacity of the home such as the attic, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.
What is the difference between an appraisal and a comparative market analysis (CMA)?(List of questions) Simply, they share nothing in common. The CMA depends on indefinite local market trends. An appraisal is based on comparable sales that can be verified by public record. Area and architectural values are also important in an appraisal. All a CMA does is generate a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
But the largest differentiator is the person behind the report. A CMA is created by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat fee for assignments, regardless of their value conclusion.
What can I expect to see in my appraisal report? (List of questions)Every appraisal should demonstrate a supported estimate of value and will clearly state the following:
After completing the report, how can I have assurance that the value conclusion is accurate?(List of questions) In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
Who do appraisers work for?(List of questions) Mortgage lenders are an appraiser's typical client, requesting their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.
Where does Dewar Appraisal Services get the information used to estimate values in Lowndes County or other areas?(List of questions) One of the most important activities of an appraiser is to gather property data. Data can be categorized as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.
General data is received from a many places. To find out about recent sales to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. Tax records and other public documents verify actual sales prices in a market. Appraisers routinely have 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 service.
And most importantly, the appraiser assimilates general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.
What can a full appraisal do for 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. When selling your home, an appraisal will help you determine the most appropriate price. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from Dewar Appraisal Services is the best documentation to ensure assets are split up fairly. A house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.
My mortgage statement has an item on it for PMI? Can I get rid of that?(List of questions) PMI is an acronym for Private Mortgage Insurance. It takes care of the lender if a borrower doesn't pay on the loan and the value of the home 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.
How do I get ready for the appraiser?(List of questions) We start with an inspection of the home. 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. Inside, pick up any clutter and make sure we can access things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of outside walls.
You can make things go faster and improve the accuracy of the appraisal report by having the following things on hand:
How does an appraiser define "Market Value"?(List of questions) In real estate appraising, Market Value is commonly defined as:
Once complete, who actually owns the appraisal report?(List of questions) For mortgage transactions, the lender orders the appraisal, either directly or through a third party. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The buyer is entitled to a copy of the appraisal - 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 noted otherwise, the home owner can do whatever they want with the appraisal.
How can I get the most ROI out of home improvements?(List of questions) The added value of a particular amenity truly depends on the local market. 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%. On the contrary, work that may not add value would be painting just for the sake of redecorating.