Churchey Appraisal, Inc. has answers to "Frequently Asked Questions"
What is an appraisal?
What is an appraisal?(List of questions) An appraisal report is an estimation leading to an opinion of value. The real estate appraiser will use a several "approaches," typically three, to conclude the estimation of market value. One of them is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value. The Sales Comparison Approach involves searching for similar homes in the vicinity and finding value based on making a comparison of those properties to the house being investigated. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a residential property. 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 capital a property produce.
Describe what an appraiser does(List of questions) An appraiser produces a professional, unbiased assessment of market value, often in the context of a real estate exchange. Appraisers exhibit their professional investigation in appraisal reports.
What would cause me to request a real estate appraisal?(List of questions) There are a lot of reasons to order an appraisal from Churchey Appraisal, Inc. with the usual 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? (List of questions)The appraiser is not a home inspector and he or she does not do a complete home inspection. The point of a home inspection is to evaluate the structure of the home from foundation to rooftop. The general 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 accessible 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?(List of questions) To be honest, they have nothing in common. What the CMA relies upon are vague trends. Appraisals use comparable sales which are verifiable resources. Location and building costs are also a priority in an appraisal. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.
But the largest differentiator is who's creating the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Further, the appraiser is an independent voice, with no conditional interest in the value conclusion, unlike the real estate agent, whose income is tied to the price of the home.
What does the appraisal report contain? (List of questions)The main point of an appraisal report is to give a value opinion, and depending on the scope of the report, one will customarily see the following:
After completing the report, what assurance is there that the value conclusion is legitimate?(List of questions) In the documentation of an appraisal, each appraiser must make sure of the following:
Who do appraisers work for?(List of questions) Typically, appraisers are hired by lenders to estimate the value of real estate involved in a loan transaction. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.
Where does Churchey Appraisal, Inc. get the information used to estimate values in Plymouth County or other areas?(List of questions) One of the main things an appraiser does is to gather data. Data can be described as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser while on site.
General data is collected from a numerous sources. 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 use tax records and other public documents that are usually online nowadays. 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 most importantly, 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?(List of questions) 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 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. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from Churchey Appraisal, Inc. is the best documentation to ensure assets are split up properly. Simply put, a home is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.
My mortgage statement has an item on it for PMI? Can I get rid of that?(List of questions) PMI stands for Private Mortgage Insurance. This added policy covers the lender in case a borrower is unable to pay on the loan and the market price 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.
How do I get ready for the appraiser?(List of questions) The first step in most appraisals is the property inspection. 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. The best thing you can do to help is make sure we have easy access to the exterior of the house . Trim any shrubs and relocate any items that would make it difficult to measure the structure. Indoors, make sure we can get to appliances like furnaces and water heaters.
To help expedite our work as well as ensure a more accurate report, attempt if possible to have the following items:
Define "Market Value"(List of questions) In real estate appraising, Market Value is commonly defined as:
Does the appraisal belong to the bank or the consumer?(List of questions) 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 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 hiring the appraiser for things outside securing a mortgage. In these situations, the appraiser may stipulate the purpose of the appraisal; 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.
How can I get the most ROI out of home improvements?(List of questions) A home's location - what city it is in and even what part of that city - is key to this popular question. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want
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 are right up there with kitchens, yielding 85%. On the contrary, work that may not add value would be painting just for the sake of redecorating.