Straight Line Appraisal, Inc. has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(Top) An appraisal is an evaluation leading to an opinion of value. There are three "common approaches to value" which assists the real estate appraiser arrive at this opinion or estimate. One of them is the Cost Approach - which is how much capital would be required to replace the improvements, minus physical deterioration and other factors, plus the land value. The most common approach in figuring the value of a house is the Sales Comparison Approach which involves making a comparison to comparable homes close by. Being the most commonly used approach, the Sales Comparison Approach tends to be the most precise and best indicator of market value for a property. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it involves estimating what an investor would pay based on the money generated by the property.
What does an appraiser do?(Top) An appraiser forumlates an objective and well substantiated determination of market value, often in the context of a real estate purchase. Appraisers illustate their investigation in appraisal reports.
What would cause me to request a real estate appraisal?(Top) There are a lot of reasons to purchase an appraisal with the most common reason being real estate and mortgage transactions. Some other reasons for getting an appraisal report include:
Is an appraisal the same as a comparative market analysis(CMA)?(Top) Simply put, it's apples and oranges. What the CMA depends on are vague trends. An appraisal is based on comparable sales that can be validated by public record. Location and construction values are also a priority in an appraisal. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.
But the most significant factor is who's doing the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA's. A certified, state licensed professional who has formed a career on valuing homes in and around Cumberland County is behind the appraisal. Moreover, the appraiser is an independent voice, with no vested interest in the property's value, unlike the real estate agent, whose income is tied to the value of the home.
Once the report is done, what assurance is there that the value conclusion is veritable?(Top) In the documentation of an appraisal, each appraiser must ensure the following:
Who employs appraisers?(Top) Most of the time, appraisers are called upon by mortgage lenders to estimate the value of real estate involved in a loan transaction - to make sure the subject is indeed adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.
Where does an appraiser get the data used to estimate values in Cumberland County or other areas?(Top) Gathering data is one of the main tasks an appraiser performs. Data can be categorized as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.
General data is gathered from a variety of places. To look up recently sold homes to be used as "comps", we typically go to the local Multiple Listing Service. Tax records and other public documents verify actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood service.
And most importantly, 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?(Top) An appraisal is a valuable tool anytime your home's value is pertinent to some financial decision. When selling your house, an appraisal assists you in setting the most appropriate price. When buying, be sure you're not overpaying by commissioning an independent appraisal. For those settling an estate or divorce, an appraisal from Straight Line Appraisal, Inc. is the best way to ensure assets are split up fairly. A house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.
What exactly is PMI and how can I get rid of it?(Top) PMI stands for Private Mortgage Insurance. PMI takes care of the lender in the event a borrower doesn't pay on the loan and the market price of the home is less than what is owed 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?(Top) The first step in most appraisals is the property inspection. 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 features. Inside, make sure it is clutter free and that we can access 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.
To help expedite our work plus ensure a more accurate report, attempt if possible to have the following items:
Define "Market Value"(Top) In real estate appraising, Market Value is commonly defined as:
Who has rights to the appraisal report?(Top) 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 certainly entitled to a copy of the appraisal - it's usually bundled 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 scenarios, the appraiser may define 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?(Top) It really depends on the market. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!
As a rule, the most value returned from renovating a home comes in the kitchen. 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 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 atypical for your neighborhood in terms of size.