Charlotte Metro Appraisals has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(List of questions) The procedure of creating an appraisal report deals with an evaluation which leads to an opinion of value. There are three "common approaches to value" which helps the real estate appraiser come to this opinion or valuation. One of the methods in use is the Cost Approach, which evaluates what it would cost to replace the improvements to the house, less the age and physical deterioration, plus the land value. The most common approach in finding the likely sales price of a home is the Sales Comparison Approach which involves making a comparison to similar properties close by. The Sales Comparison Approach is normally the most accurate and best indicator of a liklely sales price for a house. One of the least common approaches in appraising residential properties is the Income Approach, which is mainly used to figure the value of a property based on what an investor would pay based on the income produced by the building.
What does an appraiser do?(List of questions) An appraiser produces a professional, unbiased assessment of market value, often in the context of a real estate purchase. Appraisers present their expert findings in appraisal reports.
What are the reasons someone would need services from Charlotte Metro Appraisals?(List of questions) There are many reasons to get an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal include:
What is the difference between an appraisal and a home inspection? (List of questions)Home inspectors do not provide an opinion of value and do not use the same forms as appraisers. A third-party home inspector will judge the structure of the house, from the top to the bottom. The general house inspector's report will contain an evaluation of the condition of the house's heating system, 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.
What is the difference between an appraisal and a comparative market analysis (CMA)?(List of questions) Simply put, it's like comparing Shakespeare to reality TV. What the CMA depends on are ill-defined trends. The appraisal relies on similar verifiable comparable sales. In addition, the appraisal looks at other factors like condition, neighborhood and building prices. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.
But the biggest difference is who's creating the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Moreover, the appraiser is an independent 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 can I expect to see in my appraisal report? (List of questions)The main point of an appraisal report is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:
Once the appraisal has been delivered, how can I have confidence that the value conclusion is accurate?(List of questions) In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
Who are an appraiser's customers?(List of questions) Mortgage lenders are an appraiser's typical customer, using their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.
Where does Charlotte Metro Appraisals get the information used to estimate values in Gaston County or other areas?(List of questions) One of the primary things an appraiser does is to collect property data. Data can be split into Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.
General data is collected from a many sources. To research recently sold homes to be used as "comps", we often use the local Multiple Listing Service. To double-check actual sales prices, we look at items in the assessor's office and other public documents that are usually online nowadays. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood product.
And last but not least, the appraiser gathers general data from his or her collective knowledge gained from doing assignments for other properties in the same market.
How can a licensed appraiser help me?(List of questions) An appraisal is a valuable tool whenever your home's value is pertinent to some financial decision. When selling your house, an appraisal will help you determine the most appropriate price. 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 home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making wise financial decisions.
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. It covers the lender if a borrower doesn't pay on the loan and the market price of the house 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(List of questions) We begin with an inspection of the property. 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 status of its amenities. On the home's interior, make sure it is clutter free and that we can get to things like furnaces and water heaters. In the yard, trim any landscaping 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?(List of questions) In real estate appraising, Market Value is commonly defined as:
Who has rights to the appraisal report?(List of questions) 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 entitled to a copy of the appraisal - it's usually included 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 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 do whatever they want with the appraisal.
Which home renovations add the most to the price?(List of questions) Like all things real estate, this is dependent on a home's location. For example, 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 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 were second, yielding 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.