Dedicated Appraisal Services, Inc has answers to "Frequently Asked Questions"
Define the term "Appraisal"
Define the term "Appraisal"(List of questions) The appraisal process is an estimation that produces an opinion of value. This opinion or estimate is figured by using a formal method that usually uses the three main "common approaches to value". The Cost Approach is one of the methods that appraisers use to find value; it involves figuring what the improvements would cost less physical depreciation, adding the land value. Easily the most common approach in finding the likely sales price of a home is the Sales Comparison Approach which concerns concluding a comparison to comparable properties nearby. Generally speaking, the Sales Comparison Approach is the most accurate indicator of market value of a house. 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 income produced by the property.
What does an appraiser do?(List of questions) An appraiser provides a fair and credible opinion of market value, in the support of real property exchanges. Appraisers illustate their expert findings in appraisal reports.
What are the reasons someone would need your services?(List of questions) There are a lot of reasons to order an appraisal from Dedicated Appraisal Services, Inc with the usual reason being real estate and mortgage transactions. Some other reasons for ordering an appraisal include:
How is an appraiser different than a home inspector? (List of questions)Home inspectors do not produce an opinion of value and are not appraisers. An inspection is a third-party investigation of the available structure and systems of a property, from the top to the foundation. The general house inspector's report will contain an evaluation of the condition of the property'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.
Is an appraisal the same as a comparative market analysis(CMA)?(List of questions) Frankly, they have nothing in common. The CMA depends on vague trends in the market. An appraisal relies on comparable sales that can be proven by public record. In addition, the appraisal verifies other factors like condition, area and building prices. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.
But the most significant factor is the person behind the report. Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, Texas licensed professional who made a career on valuing properties in and around Tarrant County creates the appraisal. Further, the appraiser is an independent party, with no conditional interest in the value conclusion, unlike the real estate agent, whose income is tied to the price of the home.
What can I expect to see in my appraisal report? (List of questions)The main objective of an appraisal document is to give a value opinion, and depending on the scope of the report, one will customarily see the following:
After completing the appraisal, how can I have confidence that the value indicated is trustworthy?(List of questions) In communicating an appraisal report, each appraiser must make sure of the following:
Who employs appraisers?(List of questions) Typically, appraisers are employed by mortgage lenders to render a value opinion on property involved in a loan transaction - to make sure the property is truly adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.
Where does Dedicated Appraisal Services, Inc get the information used to estimate values in Tarrant County or other areas?(List of questions) One of the most important activities of an appraiser is to assimilate data. Data can be described as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.
General data is gathered from a number of places. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. To double-check actual sales prices, we use tax records and other public documents that are usually online nowadays. Appraisers routinely need to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet 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 doing assignments for other properties in the same market.
How can a licensed appraiser help me?(List of questions) If you're involved in some sort of financial decision and the value of your home is relevant, you'll want to hire a licensed appraiser. For those selling a home, you'll want to figure out the price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Dedicated Appraisal Services, Inc is the best way to ensure assets are divided evenly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making smart financial decisions.
My mortgage statement has an item on it for PMI? Can I get rid of that?(List of questions) PMI is an acronym for Private Mortgage Insurance. This supplemental plan guards the lender in the event a borrower defaults on the loan and the value of the property is less 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?(List of questions) We start with an inspection of the home. 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. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house . Trim any bushes and relocate any items that would make it difficult to measure the structure. On the inside, make sure the appraiser can get to items like furnaces and water heaters.
You can make our visit go faster and improve the quality of the appraisal report by having the following things on hand:
How does an appraiser define "Market Value"?(List of questions) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Does the appraisal belong to the bank or the consumer?(List of questions) For mortgage transactions, the lender requests 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 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 state how the appraisal can be used; 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.
Which home renovations add the most to the price?(List of questions) A home's location - what city it is in and even what part of that city - is key to this popular question. 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 are right up there with kitchens, returning 85%. On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.