Elite Appraisal, Inc. has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(List of questions) An appraiser provides an estimation that produces an opinion of value. The appraiser will typically use a few "approaches," typically three, to arrive at the estimation of market value. One of the processes is the Cost Approach - which is how much it would cost to replace the improvements, less physical deterioration and other factors, then adding the land value. Another of the methods is the Sales Comparison Approach - which involves finding a comparable analysis to other similar properties within a close proximity which have recently sold. Usually, the Sales Comparison Approach is the most definite indicator of market value of a home. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it deals with estimating what an investor would pay based on the money generated by the property.
Describe what an appraiser does(List of questions) An appraiser forumlates a fair and credible opinion of market value, in the support of real property exchanges. Appraisers exhibit their findings in appraisal reports.
Why would someone request a real estate appraisal?(List of questions) There are many reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for ordering an appraisal include:
How is an appraisal different than a home inspection? (List of questions)Home inspectors do not come to an opinion of value and are not appraisers. An inspection is a third-party evaluation of the available structure and systems of a home, from the roof to the foundation. Usually, a home inspection report will discuss the amenities and the requirements of the property: air conditioning (weather permitting), electrical services, 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.
What is the difference between an appraisal and a comparative market analysis (CMA)?(List of questions) To be blunt, it's like comparing broadband and dial-up. The CMA depends on indistinct trends in the market. Appraisals use similar sales which are valid resources. The appraisal report will also contain location and building prices. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
The person behind the report is hands down the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. A certified, state licensed professional who bases a career on valuing homes in and around Miami-Dade County creates the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon sum for work they perform, regardless of their value conclusion.
What can I expect to see in my appraisal report? (List of questions)Each report should indicate a supported value opinion and will identify the following:
Upon completion of the report, what assurance is there that the value conclusion is valid?(List of questions) In communicating an appraisal report, each appraiser must make sure of the following:
Who do appraisers work for?(List of questions) Mortgage lenders are an appraiser's typical client, needing their services to ensure property 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 Elite Appraisal, Inc. get the information used to estimate values in Miami-Dade County or other areas?(List of questions) One of the primary tasks an appraiser engages in is to compile data. Data can be described as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.
General data is received from a many sources. To look up recently sold homes to be used as "comps", we typically go to the local Multiple Listing Service. 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 product.
And last but not least, the appraiser assimilates general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.
Why do I need a professional appraisal?(List of questions) 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 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. When buying, you can avoid overpaying by commissioning an independent appraisal. For people settling an estate or divorce, an appraisal from Elite Appraisal, Inc. is the best way to ensure assets are split up evenly. A house is often the single, largest financial asset anybody owns. Knowing its true value means you can make the right financial decisions.
What exactly is PMI and how can I get rid of it?(List of questions) PMI is the common abbreviation for for Private Mortgage Insurance. PMI covers the lender in case 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 inspection(List of questions) We start with an inspection of the property. 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 the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping 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.
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 (as opposed to Fair 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. 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.
This rule doesn't apply when a home owner hires an appraiser directly. 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 stipulated otherwise, the home owner can do whatever they want with the appraisal.
I want to get more for my house. Where should I spend money renovating?(List of questions) This really depends on where the home is. 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
No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 are right up there with kitchens, yielding 85%. Adding bedrooms and baths can also increase the value of your home (when done well) as long as your home doesn't then become an oddball for your neighborhood in terms of size.