Appraise-Virginia has answers to "Frequently Asked Questions"
What is an appraisal?
What is an appraisal?(See list of FAQ's) An appraisal report is a thought process that concludes with an opinion of value. The real estate appraiser will use a number of "approaches," typically three, to arrive at 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 property, minus depreciation and physical dilapidation, adding the land value. The Sales Comparison Approach involves finding comparable properties nearby and discovering the value based on comparing those homes to the home being appraised. Generally speaking, the Sales Comparison Approach is the most accurate indicator of market value of a home. The Income Approach is generally used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.
What does an appraiser do?(See list of FAQ's) An appraiser offers an objective and well substantiated assessment of market value, in the support of real property exchanges. Appraisers exhibit their professional findings in appraisal reports.
Why would I request a real estate appraisal?(See list of FAQ's) There are a lot of reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for purchasing an appraisal report include:
How is an appraiser different than a home inspector? (See list of FAQ's)Home inspectors do not estimate an opinion of value and are not appraisers. An inspection is a third-party investigation of the available structure and mechanical systems of a home, from the roof to the foundation. Generally, a home inspection report will explain the amenities and the requirements of the home: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.
My agent performed a CMA for me. Is that the same as an appraisal?(See list of FAQ's) Simply, they share nothing in common. The CMA uses market trends to generate most of their business. Appraisals use similar sales which are verifiable resources. The appraisal report will also contain area and building prices. 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.
The person behind the report is frankly the biggest difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, state licensed professional who bases a career on valuing real estate in and around New Kent County is behind the appraisal. Moreover, the appraiser is an unbiased voice, with no conditional interest in the value of a home, unlike the agent, whose income is tied to the value of the home.
What does the appraisal report contain? (See list of FAQ's)Each report should demonstrate a believable value opinion and should document the following:
Once the report is done, how can I have confidence that the value indicated is trustworthy?(See list of FAQ's) In communicating an appraisal report, each appraiser must ensure the following:
Who engages the services of appraisers?(See list of FAQ's) Mortgage lenders are an appraiser's typical client, needing their services to ensure real estate 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 Appraise-Virginia get the information used to estimate values in New Kent County or other areas?(See list of FAQ's) One of the main tasks an appraiser performs is to collect data. Data can be split into Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.
General data is gathered from a many sources. Local Multiple Listing Services (MLS) provide information on recently sold homes that might be used as comparables. Tax records and other public documents verify actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood system.
And most importantly, the appraiser gathers general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.
Why do I need a professional appraisal?(See list of FAQ's) If you're involved in some sort of financial decision and the value of your home matters, you'll want an appraisal. 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. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from Appraise-Virginia is the best way to ensure assets are divided evenly. 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 short for for Private Mortgage Insurance. This additional plan takes care of the lender in the event a borrower is unable to pay on the loan and the market price of the property is lower than the balance of the loan. 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(See list of FAQ's) We begin 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. Inside, pick up any clutter and make sure we can get to things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of exterior walls.
The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
What does "Market Value" mean?(See list of FAQ's) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Once complete, who actually owns the appraisal report?(See list of FAQ's) For mortgage transactions, the lender orders 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 certainly 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.
It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these cases, the appraiser may define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not noted 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) 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.
No matter where you go, however, renovating a kitchen is almost always a safe move. 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.