Southern Belle Appraisals has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal (See list of FAQ's)The appraisal process is an evaluation that generates an opinion of value. This opinion or estimate is found through a formal method that typically utilizes three "common approaches to value". One of the methods in use is the Cost Approach, which finds what it would cost to replace the improvements to the property, less the depreciation and physical dilapidation, 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 making a comparison to similar properties nearby. The Sales Comparison Approach is normally the most definitive and best indicator of value for a residential property. 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.
Describe what an appraiser does (See list of FAQ's)An appraiser offers a fair and credible assessment of market value, in the support of real estate exchanges. Appraisers document their professional findings in appraisal reports.
What are the reasons I would request services from Southern Belle Appraisals? (See list of FAQ's)There are a lot of reasons to get an appraisal from Southern Belle Appraisals with the most common reason being real estate and mortgage transactions. Other reasons for getting an report include:
How is an appraiser different than a home inspector? (See list of FAQ's)The appraiser is not a home inspector nor does he/she do a complete home inspection. A third-party home inspector will inspect the structure of the home, from the roof to the bottom. The usual house inspector's report will contain an evaluation of the condition of the home's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.
My agent performed a CMA for me. Is that the same as an appraisal? (See list of FAQ's)Frankly, they share nothing in common. The CMA relies on indistinct trends in the market. The appraisal relies on specific definite comparable sales. Location and architectural prices are also a priority in an appraisal. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.
The credentials of the person creating the report is actually 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, generate CMA's. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Further, the appraiser is an independent party, with no vested interest in the property's value, unlike the real estate agent, who gets a commission based upon the price of the home.
What does the appraisal report contain? (See list of FAQ's)Every appraisal should indicate a believable estimate of value and should document the following:
Upon completion of the appraisal, how can I have assurance that the value conclusion is legitimate? (See list of FAQ's)In the documentation of an appraisal, each appraiser must ensure the following:
Who engages the services of appraisers? (See list of FAQ's)Most of the time, appraisers are called upon by lenders to render a value opinion on a house involved in a loan transaction - to make sure the property is truly adequate collateral for the loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.
Where does Southern Belle Appraisals get the information used to estimate values in Central Florida or other areas? (See list of FAQ's)One of the main things an appraiser does is to collect property data. Data can be classified as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.
General data is received from a numerous places. Local Multiple Listing Services (MLS) have information on recently sold homes that could be used as comparables. To verify actual sales prices, we look at items in the assessor's office and other public documents. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood system.
And most importantly, the appraiser assembles general data from his or her collective knowledge gained from doing assignments for other properties in the same market.
Why should I hire a licensed appraiser? (See list of FAQ's)An appraisal is a valuable tool anytime your home's value is pertinent to a financial decision. For those selling a home, you'll want to figure out a 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 people settling an estate or divorce, an appraisal from Southern Belle Appraisals is the best documentation to ensure assets are divided fairly. A home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.
My mortgage statement has an item on it for PMI? Can I get rid of that? (See list of FAQ's)PMI is short for for Private Mortgage Insurance. This supplementary policy covers the lender in the event a borrower defaults on the loan and the market price of the property is less than what the borrower still owes on the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.
Should I do anything in advance of the appraisal inspection (See list of FAQ's)We start with an inspection of the home. 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 condition of its features. 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 move any items that would get in our way while we measure the structure. On the inside, make sure we can easily access items like furnaces and water heaters.
To help speed things along as well as ensure a more accurate report, attempt if possible to have the following items:
How does an appraiser define "Market Value"? (See list of FAQ's)In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Who has rights to the appraisal report? (See list of FAQ's)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 certainly 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.
This rule doesn't apply when a home owner engages an appraiser directly. In these cases, 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? (See list of FAQ's)A home's location - what city it is in and even what part of that city - is key to this popular question. 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.
No matter where you go, however, renovating a kitchen is almost always a safe move. 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 were second, yielding 85%. Adding bedrooms and baths can also boost the value of your home (when done well) as long as your home doesn't then become overbuilt for your neighborhood in terms of size.