Appia Appraisal Group, LLC has answers to "Frequently Asked Questions"
Define the term "Appraisal"
Define the term "Appraisal"(See list of FAQ's) An appraiser provides an estimation that leads to an opinion of value. The real estate appraiser must use a number of "approaches," typically three, to conclude the estimation of market value. One of the methods in use is the Cost Approach, which finds what it would cost to replace the improvements to the home, less the depreciation and physical dilapidation, adding the land value. Another of the methods is the Sales Comparison Approach - which involves finding a comparable analysis to other similar nearby properties which have recently sold. Being the most commonly used approach, the Sales Comparison Approach tends to be the most accurate and best indicator of market value for a residential property. One of the least common approaches in appraising residential properties is the Income Approach, which is generally used to figure the value of a property based on what an investor would pay based on the capital produced by the property.
Describe what an appraiser does(See list of FAQ's) An appraiser offers a professional, unbiased assessment of market value, in the support of real estate exchanges. Appraisers illustate their expert investigation in appraisal reports.
Why would someone require your services?(See list of FAQ's) There are a lot of reasons to obtain an appraisal from Appia Appraisal Group, LLC with the most common reason being real estate and mortgage transactions. Some other reasons for getting an appraisal report include:
What is the difference between an appraisal and a home inspection? (See list of FAQ's)Home inspectors do not provide an opinion of value and are not appraisers. A third-party home inspector will evaluate the structure of the house, from the roof to the foundation. The standard house inspector's report will contain an evaluation of the integrity of the property's heating systems, 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.
My agent performed a CMA for me. Is that the same as an appraisal?(See list of FAQ's) To be blunt, it's like comparing Shakespeare to reality TV. The CMA uses market trends to generate most of their business. Appraisals use similar sales which are verifiable resources. Also, the appraisal looks at other factors like condition, neighborhood and building costs. 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.
The credentials of the person creating the report is actually the most significant difference between a CMA and an appraisal. 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 produce by a licensed, certified professional who makes a living 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 sum for assignments, regardless of their outcome.
What's in an appraisal report? (See list of FAQ's)Each appraisal should demonstrate a believable value opinion and will clearly state the following:
Upon completion of the report, how can I have certainty that the final number is trustworthy?(See list of FAQ's) In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
Who hires Appia Appraisal Group, LLC(See list of FAQ's) Mortgage lenders are an appraiser's most likely customer, needing their services to ensure a home 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 Washoe County or other areas?(See list of FAQ's) One of the most important things an appraiser does is to collect data. Data can be divided into Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.
General data is gathered from a many 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 courthouse documents reveal actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood servers.
And most importantly, the appraiser gathers general data from his or her past experience in doing assignments for other houses in the same market.
Why should I hire a licensed appraiser?(See list of FAQ's) If you're involved in some sort of financial decision and the value of your home is relevant, you'll want a full appraisal. For those selling a home, you'll want to determine the price that gets you the most profit but doesn't leave your home on the market too long; 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 Appia Appraisal Group, LLC is the best documentation to ensure assets are split up fairly. Simply put, a home 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?(See list of FAQ's) PMI is an acronym for Private Mortgage Insurance. PMI guards the lender in case a borrower defaults on the loan and the value of the house is less than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.
Should I do anything in advance of the appraisal appointment(See list of FAQ's) We start with an inspection of the home. 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. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house . Trim any landscaping and move any items that would make it difficult to measure the structure. On the inside, make sure the appraiser can get to items like furnaces and water heaters.
To help speed things along as well as ensure a more accurate report, attempt if possible to have the following items:
What is "Market Value?"(See list of FAQ's) In real estate appraising, Market Value is commonly defined as:
Does the appraisal belong to the bank or the consumer?(See list of FAQ's) 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.
It's different when it's the homeowner hiring 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 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?(See list of FAQ's) It really depends on the market. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes
As a rule, the best ROI from renovating a home comes in the kitchen. 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 weren't far behind, 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 overbuilt for your neighborhood in terms of size.