JS Appraisal has answers to "Frequently Asked Questions"
Define the term "Appraisal"
Define the term "Appraisal"(List of questions) The process of performing an appraisal consists of an inspection which forms an opinion of value. There are three "common approaches to value" which assists the appraiser conclude this opinion or estimate. One of them is the Cost Approach - which is how much it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value. Another of the methods is the Sales Comparison Approach - which concerns making a comparison to other similar properties within a close proximity which have recently sold. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a house. 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 would bring in.
Describe what an appraiser does(List of questions) An appraiser generates an unbiased and well substantiated determination of market value, often in the context of a real estate purchase. Appraisers exhibit their professional investigation in appraisal reports.
What would cause me to need your services?(List of questions) There are many reasons to get an appraisal from JS Appraisal with the usual reason being real estate and mortgage transactions. Other reasons for getting an report include:
How is an appraiser different than a home inspector? (List of questions)Home inspectors do not figure out an opinion of value and are not appraisers. An inspection is a third-party investigation of the accessible structure and appliances of a house, from the top to the bottom. Generally, a home inspection report will discuss the amenities and the requirements of the home: 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, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.
Is an appraisal the same as a comparative market analysis(CMA)?(List of questions) Frankly, they have nothing in common. The CMA relies on indefinite local market trends. The appraisal is based on similar valid comparable sales. Also, the appraisal checks other factors like condition, location and construction 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 credentials of the person behind the report is actually the biggest difference between a CMA and an appraisal. Real estate agents produce CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a flat fee for work they perform, regardless of their value conclusion.
What can I expect to see in my appraisal report? (List of questions)Each appraisal must demonstrate a credible value opinion and should clearly state the following:
Once the assignment has been completed, what assurance is there that the final number is valid?(List of questions) In the documentation of an appraisal, each appraiser must ensure the following:
Who do appraisers work for?(List of questions) Most of the time, appraisers are hired by mortgage lenders to estimate the value of real estate involved in a loan transaction. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.
Where does JS Appraisal get the data used to estimate values in San Mateo County or other areas?(List of questions) One of the most important activities of an appraiser is to collect data. Data can be categorized as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.
General data is collected from a number of places. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. To double-check actual sales prices, we look at tax records and other public documents. Appraisers often have to report when a property is in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.
And most importantly, the appraiser assimilates 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?(List of questions) An appraisal is a worthwhile anytime your home's value is pertinent to some financial decision. For those selling a home, you'll want to determine 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. When buying, be sure you're not overpaying by commissioning an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. 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?(List of questions) PMI stands for Private Mortgage Insurance. PMI guards the lender in case a borrower is unable to pay on the loan and the value of the house is less than what is owed on 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.
Does the appraiser need anything from me in advance?(List of questions) 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. Inside, make sure it is clutter free and that we can access things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of outside walls.
You can make the inspection go faster and improve the quality of the appraisal report by having the following things on hand:
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 requests 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 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.
The exception to this rule is when a home owner hires an appraiser directly. In these scenarios, the appraiser may define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can do whatever they want with the appraisal.
How can I get the most ROI out of home improvements?(List of questions) The added value of a particular amenity truly depends on the local 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. 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%. On the contrary, something that may not add value would be painting just for the sake of redecorating.