Appraisal TX has answers to "Frequently Asked Questions"
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What is an appraisal?
Describe what an appraiser does
What would cause me to request a real estate appraisal?
Is an appraisal the same as a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What's in an appraisal report?
Once the report has been delivered, how can I have confidence that the final number is accurate?
What are the requirements to be a certified appraiser?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in Cameron County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Does the appraiser need anything from the homeowner in advance?
What is "Market Value?"
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?
What is an appraisal? (See list of FAQ's)
The appraisal process is an estimation that generates an opinion of value.
This opinion or estimate is arrived at by using a formal method that usually utilizes three "common approaches to value".
One of the processes in use is the Cost Approach, which is what it would cost to replace the improvements to the home, minus depreciation and physical dilapidation, plus the land value.
Easily the most common approach in finding the value of a house is the Sales Comparison Approach which concerns concluding a comparison to comparable houses close by.
The Sales Comparison Approach is commonly the most definitive and clearest indicator of a liklely sales price for a home.
The third approach is the Income Approach, which is the most important method in appraising income producing properties - it deals with estimating what an investor would pay based on the capital generated by the property.
Describe what an appraiser does (See list of FAQ's)
An appraiser provides an objective and well supported opinion of market value, to be used in making real estate transactions.
Appraisers demonstrate their conclusions in appraisal reports.
What would cause me to request a real estate appraisal? (See list of FAQ's)
There are many reasons to purchase an appraisal from Appraisal TX with the most common reason being real estate and mortgage transactions.
Some other reasons for purchasing an report include:
For a more extensive explanation of the appraisal process click here.
- To get a loan.
- To lower your property taxes.
- To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
- To fight inflated property taxes.
- To handle an estate.
- To provide you a leg-up when purchasing real estate.
- To figure out a likely sales price when putting your home on the market.
- To ensure parties are provided just compensation in eminient domain cases.
- Because a government agency such as the IRS requires it.
- It's possible you could have to deal with being in a lawsuit - an appraisal will help.
The appraiser is not a home inspector and he or she does not do a full home inspection.
A third-party home inspector will investigate the structure of the home, from the roof to the foundation.
The general house inspector's report will include an evaluation of the condition 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 broadband and dial-up.
The CMA utilizes market trends to create most of their business.
Appraisals use similar sales which are verifiable resources.
Location and architectural values are also a priority in an appraisal.
All a CMA does is generate a "ball park figure."
Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
Who's behind the report is frankly the most significant difference between a CMA and an appraisal.
Real estate agents produce CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation.
The appraisal is created 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 previously agreed upon fee for assignments, regardless of their outcome.
Each appraisal must demonstrate a supported estimate of value and should clearly state the following:
For a more comprehensive view of what goes into an appraisal report click here: Sample Appraisal Report
- Who engaged the appraiser and whose purposes the appraisal is to serve.
- The intended use of the report.
- The reason for the assignment.
- Precisely what "value" attribute is being reported and what that value means.
- The effective date of the appraiser's opinions and conclusions.
- Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible items.
- Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
- Division of interest, such as fractional interest, physical segment and partial holding.
- What was entailed in the activity of completing the appraisal.
Once the report has been delivered, how can I have confidence that the final number is accurate? (See list of FAQ's)
In the documentation of an appraisal, each appraiser must ensure the following:
To become a state licensed appraiser, there are strenuous education requirements as well as on the jobexperience that must be logged.
Plus, appraisers must follow a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).
- That the information analysis contained in the appraisal was suitable.
- That grave errors of omission or commission were not committed individually or collectively.
- That appraisal services were not carried out in a careless or negligent manner.
- That a believable, substantiated appraisal report was communicated.
(See list of FAQ's)
Licensing and certification takes coursework, tests and real world experience.
Once licensed, he/she must then complete continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.
Who are an appraiser's customers? (See list of FAQ's)
Mortgage lenders are an appraiser's typical client, needing their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan.
Appraisers also provide opinions in litigation cases, tax matters and investment decisions.
Where does an appraiser get the information used to estimate values in Cameron County or other areas? (See list of FAQ's)
Gathering data is one of the main things an appraiser performs.
Data can be described as either Specific or General. Specific data is collected 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 number of sources.
To find out about recent sales to be used as "comps", we often use the local Multiple Listing Service.
To verify actual sales prices, we research items in the assessor's office and other public documents that are usually online nowadays.
Appraisers often have 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 last but not least, the appraiser assembles general data from his or her collective knowledge gained from doing assignments for other houses in the same market.
What can a full appraisal do for me? (See list of FAQ's)
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 the 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.
If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly.
Simply put, 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? (See list of FAQ's)
PMI is the common abbreviation for for Private Mortgage Insurance.
This supplementary policy takes care of the lender in case a borrower defaults on the loan and the value of the house is lower than the loan balance.
You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.
The money you keep from getting rid of the PMI required when you got your mortgage pays for the appraisal in no time. Appraisal TX stays current with value trends in South Padre Island and Cameron County. Contact us today.
Does the appraiser need anything from the homeowner in advance? (See list of FAQ's)
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.
Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any bushes and relocate any items that would make it difficult to measure the structure. On the inside, make sure the appraiser can easily access appliances like furnaces and water heaters.
To help expedite our work plus ensure a more accurate report, try if possible to have the following items:
- Written property agreements, such as a maintenance easement for a shared driveway.
- List of personal property to be sold with the home.
- Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
- Locate copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
- A list of "suggested" improvements if the property is to be appraised "as complete".
What is "Market Value?" (See list of FAQ's)
In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
"The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale."
Who has rights to the appraisal report? (See list of FAQ's)
For mortgage transactions, the lender orders the appraisal, either directly or through a third party.
Even though it's the buyer that eventually pays for the report, the lender is the intended user. The
buyer is certainly entitled to a copy of the report - it's usually included with all the other closing documents - but is not allowed 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 cases, the appraiser may state 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 use the appraisal for any purpose.
How can I get the most ROI out of home improvements? (See list of FAQ's)
Like all things real estate, this is dependent on a home's location.
adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.
As a rule, the most value returned 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%.
Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.
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