New England Appraisal Services, Inc has answers to "Frequently Asked Questions"
Define the term "Appraisal"
Define the term "Appraisal"(Top) The method of writing an appraisal report deals with an estimation which leads to an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or valuation. The Cost Approach is one of the approaches that appraisers use to find value; it involves finding what the improvements would cost less 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 concluding a comparison to similar homes close by. Usually, the Sales Comparison Approach is the most accurate 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 involves estimating what an investor would pay based on the capital generated by the property.
Describe what an appraiser does(Top) An appraiser offers a fair and credible determination of market value, in the support of real estate exchanges. Appraisers show their expert investigation in appraisal reports.
What are the reasons a person would need services from New England Appraisal Services, Inc?(Top) There are a lot of reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for ordering an appraisal report include:
Is an appraisal the same as a comparative market analysis(CMA)?(Top) Simply, they share nothing in common. The CMA depends on indistinct trends in the market. The appraisal is reliant on similar valid comparable sales. The appraisal report will also include neighborhood and construction values. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.
Who's creating the report is hands down the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, create CMA's. A certified, state licensed professional who bases their livelihood on valuing homes in and around Hampden County creates the appraisal. Moreover, the appraiser is an unbiased voice, with no conditional interest in the value conclusion, unlike the real estate agent, who gets a commission based upon the value of the home.
Once the report has been delivered, what guarantee is there that the value conclusion is veritable?(Top) In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
Who hires an appraiser?(Top) Commonly, appraisers are called upon by lenders to estimate the value of property involved in a loan transaction - to make sure the house is indeed adequate collateral for the loan. Attorneys and CPAs also hire appraisers for asset division and estate settlements.
Where does New England Appraisal Services, Inc get the information used to estimate values in Hampden County or other areas?(Top) One of the main tasks an appraiser must accomplish is to collect data. Data can be classified as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.
General data is gathered from a numerous places. To find out about recently sold homes to be used as "comps", we often go to the local Multiple Listing Service. Tax records and other public documents reveal actual sales prices in a market. Appraisers often need 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 service.
And last but not least, the appraiser assembles general data from his or her past experience in doing assignments for other houses in the same market.
Why should I hire a licensed appraiser?(Top) 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. If you're buying, it makes sure you don't overpay. 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. Without knowing its real value, wise financial decisions are impossible.
What exactly is PMI and how can I get rid of it?(Top) PMI is short for for Private Mortgage Insurance. This added plan guards the lender in case a borrower is unable to pay on the loan and the value of the house is lower than the balance of the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.
How do I get ready for the appraiser?(Top) We begin with an inspection of the home. 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. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any shrubs and move any items that would make it difficult to measure the structure. On the inside, make sure we can get to items 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:
How does an appraiser define "Market Value"?(Top) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Once complete, who actually owns the appraisal report?(Top) In most real estate transactions, the appraisal is ordered by the lender. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is entitled to a copy of the report - 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 cases, the appraiser may state 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?(Top) It really depends on the market. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes
No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 weren't far behind, yielding 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.