Campbell & Associates Appraisers, Inc. has answers to "Frequently Asked Questions"
Define the term "Appraisal"
Define the term "Appraisal" (See list of FAQ's)The appraisal process is an evaluation that produces an opinion of value. There are three "common approaches to value" which helps the real estate appraiser conclude this opinion or valuation. One of the three is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, then adding the land value. Easily the most common approach in figuring the likely sales price of a home is the Sales Comparison Approach which involves concluding a comparison to similar homes nearby. Generally speaking, the Sales Comparison Approach is the most accurate indicator of market value of a house. The Income Approach is generally used for determining 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 (See list of FAQ's)An appraiser forumlates a professional, unbiased opinion of market value, in the support of real property exchanges. Appraisers exhibit their expert findings in appraisal reports.
What would cause me to request your services? (See list of FAQ's)There are a lot of reasons to get an appraisal from Campbell & Associates Appraisers, Inc. with the most common reason being real estate and mortgage transactions. Other reasons for getting an appraisal include:
Is an appraisal the same as a home inspection? (See list of FAQ's)Home inspectors do not provide an opinion of value and do not do appraisal reports. An inspection is a third-party evaluation of the accessible structure and systems of a home, from the top to the foundation. Generally, a home inspection report will explain the amenities and the necessities of the home: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural integrity 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)? (See list of FAQ's)To be blunt, it's like comparing broadband and dial-up. What the CMA depends on are ill-defined trends. An appraisal utilizes comparable sales that can be verified by records. Area and construction values 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 biggest difference is who's creating the report. A CMA is written by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. The appraisal is produce by a licensed, certified professional who has made a career 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 accept a flat fee for assignments, regardless of their value conclusion.
What's in an appraisal report? (See list of FAQ's)Each report should reflect a credible estimate of value and will identify the following:
Upon completion of the report, how can I have assurance that the value indicated is veritable? (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 do appraisers work for? (See list of FAQ's)Typically, appraisers are called upon by mortgage lenders to render a value opinion on property involved in a loan transaction - to make sure the property is truly adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.
Where does Campbell & Associates Appraisers, Inc. get the information used to estimate values? (See list of FAQ's)One of the most important activities of an appraiser is to compile property data. Data can be categorized as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.
General data is gathered from a numerous sources. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. Tax records and other public documents reveal actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood service.
And most importantly, the appraiser assembles general data from his or her past experience in doing assignments for other properties in the same market.
Why should I hire a licensed appraiser? (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 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, be sure you're not overpaying by getting an independent appraisal. For people settling an estate or divorce, an appraisal from Campbell & Associates Appraisers, Inc. is the best documentation to ensure assets are split up evenly. A house 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? (See list of FAQ's)PMI stands for Private Mortgage Insurance. This added policy protects the lender if a borrower defaults on the loan and the market price of the house is less than the loan balance. 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.
How do I get ready for the appraiser? (See list of FAQ's)We begin with an inspection of the home. 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 get in our way while we measure the structure. Indoors, make sure we can easily access appliances like furnaces and water heaters.
You can make our visit go faster and improve the quality of the appraisal report by having the following things on hand:
Define "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. 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 scenarios, the appraiser may define how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.
Are some home improvements more worthwhile than others? (See list of FAQ's)It really depends on the market. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.
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 (when done well) as long as your home doesn't then become atypical for your neighborhood in terms of size.