Greg Easter Appraisals has answers to "Frequently Asked Questions"
What is an appraisal?
What is an appraisal?(Return to top) An appraisal report is an evaluation allowing the appraiser to come to an opinion of value. There are three "common approaches to value" which assists the appraiser conclude this opinion or estimate. One of the processes in use is the Cost Approach, which finds what it would cost to replace the improvements to the home, minus depreciation and physical dilapidation, adding the land value. The most common approach in finding the likely sales price of a house is the Sales Comparison Approach which involves making a comparison to similar houses nearby. Usually, the Sales Comparison Approach is the most definite indicator of market value of a residential property. The third approach is the Income Approach, which is the best method in appraising income producing properties - it deals with estimating what an investor would pay based on the income generated by the property.
Describe what an appraiser does(Return to top) An appraiser provides a fair and credible determination of market value, often in the context of a real estate sale. Appraisers show their professional investigation in appraisal reports.
What are the reasons I would need services from Greg Easter Appraisals?(Return to top) There are many reasons to order an appraisal from Greg Easter Appraisals with the most common reason being real estate and mortgage transactions. Some other reasons for purchasing an appraisal include:
What is the difference between an appraisal and a home inspection? (Return to top)Home inspectors do not figure out an opinion of value and do not use the same forms as appraisers. An inspection is a third-party investigation of the available structure and systems of a home, from the roof to the bottom. Commonly, a home inspection report will explain the amenities and the requirements of the property: air conditioning (weather permitting), electrical functions, 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.
Is an appraisal the same as a comparative market analysis(CMA)?(Return to top) Simply put, it's like comparing Shakespeare to reality TV. The CMA relies on indefinite local market trends. Appraisals use similar sales which are verifiable resources. The appraisal report will also contain location and construction values. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
The person behind the report is hands down 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. A certified, state licensed professional who has formed their livelihood on valuing homes in and around Davidson County is behind the appraisal. Further, the appraiser is an unbiased voice, with no vested interest in the property's value, unlike the agent, whose income is tied to the price of the home.
What can I expect to see in my appraisal report? (Return to top)Each appraisal must demonstrate a supported value opinion and will clearly state the following:
Once the report has been completed, how can I have certainty that the value conclusion is trustworthy?(Return to top) In communicating an appraisal report, each appraiser must ensure the following:
Who employs appraisers?(Return to top) Mortgage lenders are an appraiser's typical client, requesting their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.
Where does Greg Easter Appraisals get the information used to estimate values in Davidson County or other areas?(Return to top) Compiling information is one of the primary occupations of an appraiser. Data can be described as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser while on site.
General data is gathered from a variety of sources. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. Tax records and other public documents verify actual sales prices in a market. Appraisers often have to report when a property is 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 houses in the same market.
Why should I hire a licensed appraiser?(Return to top) If you're making some sort of financial decision and the value of your home is relevant, you'll want an appraisal. When selling your house, an appraisal helps you set the most appropriate price. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from Greg Easter Appraisals is the best way to ensure assets are divided fairly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making the right financial decisions.
What exactly is PMI and how can I get rid of it?(Return to top) PMI stands for Private Mortgage Insurance. This additional policy covers the lender if a borrower defaults on the loan and the market price of the house is less than the loan balance. 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.
Should I do anything in advance of the appraisal appointment(Return to top) We start with an inspection of the property. 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. 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 relocate any items that would get in our way while we measure the structure. On the inside, make sure we can easily access items like furnaces and water heaters.
To help expedite our work plus ensure a more accurate report, attempt if possible to have the following items:
Define "Market Value"(Return to top) In real estate appraising, Market Value is commonly defined as:
Once complete, who actually owns the appraisal report?(Return to top) For mortgage transactions, the lender requests 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 bundled with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.
The exception to this rule is when a home owner hires an appraiser directly. In these scenarios, the appraiser may state how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stipulated 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?(Return to top) The answer to this is different depending upon the location of the home. For example, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!
As a rule, the best ROI 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 are right up there with kitchens, returning 85%. On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.