Hanlin Real Estate Service has answers to "Frequently Asked Questions"
Define the term "Appraisal"
Define the term "Appraisal"(See list of FAQ's) An appraisal is an inspection that concludes with an opinion of value. This opinion or estimate is concluded through a formal method that commonly uses three "common approaches to value". The Cost Approach is one of the approaches that real estate appraisers use to find value; it involves discerning what the improvements would cost minus physical degradation, adding the land value. The Sales Comparison Approach involves searching for comparable properties in the vicinity and finding value based on making a comparison of those homes to the home being appraised. The Sales Comparison Approach is commonly the most accurate and clearest indicator of value for a home. The Income Approach is primarily used for finding the market value of income-producing properties based on what an investor would pay based on the amount of income a property produce.
What does an appraiser do?(See list of FAQ's) An appraiser offers a fair and credible assessment of market value, in the support of real estate exchanges. Appraisers illustate their professional analysis in appraisal reports.
Why would a person require a real estate appraisal?(See list of FAQ's) There are many reasons to order an appraisal from Hanlin Real Estate Service with the most common reason being real estate and mortgage transactions. Other reasons for ordering an report include:
What is the difference between an appraisal and a home inspection? (See list of FAQ's)Home inspectors do not estimate an opinion of value and are not appraisers. The point of a home inspection is to evaluate the structure of the house from foundation to top. The stereotypical house inspector's report will contain an evaluation of the condition of the house's heating systems, 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)?(See list of FAQ's) Honestly, they have nothing in common. What the CMA relies upon are vague trends. Appraisals use similar sales which are verifiable resources. Area and construction costs are also a priority in an appraisal. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
Who's behind the report is frankly the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, create CMA's. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Further, the appraiser is an unbiased party, with no vested interest in the value of a home, unlike the agent, who gets a commission based upon the value of the home.
What can I expect to see in my appraisal report? (See list of FAQ's)The main point of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:
Once the appraisal has been completed, what guarantee is there that the value indicated is legitimate?(See list of FAQ's) In the documentation of an appraisal, each appraiser must ensure the following:
Who engages the services of appraisers?(See list of FAQ's) Commonly, appraisers are called upon by lenders to estimate the value of property involved in a loan transaction. Attorneys and CPAs also hire appraisers for asset division and estate settlements.
Where does an appraiser get the information used to estimate values in Jay County or other areas?(See list of FAQ's) Collecting data is one of the primary tasks an appraiser engages in. Data can be classified as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.
General data is received from a variety of places. To find out about recently sold homes to be used as "comps", an appraiser will typically use the local Multiple Listing Service. To verify actual sales prices, we look at items in the assessor's office and other public documents. Appraisers routinely need to report when a property lies in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.
And last but not least, the appraiser assembles general data from his or her past experience in creating appraisals for other properties in the same market.
How can a licensed appraiser help me?(See list of FAQ's) If you're involved in any kind of financial decision and the value of your home matters, you'll want an appraisal. When selling your home, an appraisal helps you set the most appropriate price. When buying, you can avoid overpaying by getting an independent appraisal. For people settling an estate or divorce, an appraisal from Hanlin Real Estate Service is the best documentation to ensure assets are divided properly. A house is often the single, largest financial asset anybody owns. Knowing its true value means you can make informed financial decisions.
What exactly is PMI and how can I get rid of it?(See list of FAQ's) PMI is the common abbreviation for for Private Mortgage Insurance. This added plan guards the lender in case a borrower doesn't pay on the loan and the market price of the home is less than what the borrower still owes on 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.
How do I get ready for the appraiser?(See list of FAQ's) 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 exterior walls.
The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
What is "Market Value?"(See list of FAQ's) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Who has rights to the appraisal report?(See list of FAQ's) In most real estate transactions, the appraisal is ordered by the lender. 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.
This rule doesn't apply when a home owner engages an appraiser directly. In these cases, 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.
I want to get more for my house. Where should I spend money renovating?(See list of FAQ's) 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!
No matter where you go, however, renovating a kitchen is almost always a safe move. 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, work that may not add value would be painting just for the sake of redecorating.