Whitman Appraisal has answers to "Frequently Asked Questions"
Describe an appraisal Describe an appraisal (Go to list of questions)The method of performing an appraisal deals with an investigation which leads to an opinion of value. This opinion or estimate is discerned by using a formal process that typically utilizes three "common approaches to value". One of the methods in use is the Cost Approach, which finds what it would cost to restore the improvements to the house, less the depreciation and physical dilapidation, plus the land value. The Sales Comparison Approach involves finding similar homes nearby and discovering the value based on comparing those prior sales to the home being investigated. The Sales Comparison Approach is commonly the most definitive and clearest indicator of a liklely sales price for a home. One of the least common approaches in appraising residential properties is the Income Approach, which is generally used to figure the market value of a property based on what an investor would pay based on the capital produced by the building.Describe what an appraiser does (Go to list of questions)An appraiser produces an impartial and well substantiated opinion of market value, in the support of real estate transactions. Appraisers illustate their professional conclusions in appraisal reports.Why would someone need services from Whitman Appraisal? (Go to list of questions)There are a lot of reasons to get an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for ordering an appraisal report include:
What is the difference between an appraisal and a home inspection? (Go to list of questions)Appraisers do not do complete residential property inspections and are not home inspectors. An inspection is a third-party investigation of the available structure and systems of a home, from the top to the foundation. The standard house inspector's report will contain 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 visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.What is the difference between an appraisal and a comparative market analysis (CMA)? (Go to list of questions)Frankly, it's like comparing Shakespeare to reality TV. The CMA relies on indefinite trends in the market. Appraisals use comparable sales which are verifiable resources. In addition, the appraisal verifies other factors like condition, area and building costs. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.The credentials of the person behind the report is frankly the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA's. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Moreover, the appraiser is an independent party, with no vested interest in the value of a home, unlike the real estate agent, who gets a commission based upon the value of the home. What are the contents of an appraisal report? (Go to list of questions)Every report should reflect a supported value opinion and should identify the following:
Upon completion of the appraisal, what guarantee is there that the value conclusion is trustworthy? (Go to list of questions)In communicating an appraisal report, each appraiser must ensure the following:
Who do appraisers work for? (Go to list of questions)Mortgage lenders are an appraiser's typical customer, requesting their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.Where does an appraiser get the information used to estimate values in Maricopa County or other areas? (Go to list of questions)Collecting data is one of the primary occupations of an appraiser. Data can be described as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.General data is received from a many places. To find out about recently sold homes to be used as "comps", we often use the local Multiple Listing Service. To double-check actual sales prices, we look at items in the assessor's office and other public documents. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood service. 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. Why should I hire a licensed appraiser? (Go to 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 figure out a price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. When buying, you can avoid overpaying by getting an independent appraisal. For those settling an estate or divorce, an appraisal from Whitman Appraisal is the best way to ensure assets are divided fairly. Simply put, a home 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? (Go to list of questions)PMI stands for Private Mortgage Insurance. This supplemental plan covers the lender in case a borrower doesn't pay on the loan and the market price of the house is less than what is owed 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.
Should I do anything in advance of the appraisal inspection (Go to list of questions)The first step in most appraisals is the home 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. On the outside, 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:
Define "Market Value" (Go to list of questions)In real estate appraising, Market Value is commonly defined as:
Who has rights to the appraisal report? (Go to list of questions)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 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 hiring the appraiser for things outside securing a mortgage. In these situations, the appraiser may define how the appraisal can be used; 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. I want to get more for my house. Where should I spend money renovating? (Go to list of questions)The answer to this is different depending upon the location of the home. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homesNo matter where you go, however, renovating a kitchen is almost always a safe move. 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, 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 atypical for your neighborhood in terms of size. |
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