Classic Consultants & Appraisers, LLC. has answers to "Frequently Asked Questions"
Define the term "Appraisal"
Define the term "Appraisal"(List of questions) The method of producing an appraisal report deals with an evaluation which leads to an opinion of value. The appraiser must use a number of "approaches," typically three, to conclude the estimation of market value. One of the methods in use is the Cost Approach, which finds what it would cost to replace the improvements to the property, minus age and physical deterioration, plus the land value. The Sales Comparison Approach involves finding similar homes in close proximity and finding value based on comparing those homes to the house being appraised. The Sales Comparison Approach is commonly the most definitive and best indicator of value for a residence. The third approach is the Income Approach, which is the most important method 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 assessment of market value, to be used in making real estate transactions. Appraisers show their expert investigation in appraisal reports.
What are the reasons a person would request your services?(List of questions) There are a lot of reasons to purchase an appraisal from Classic Consultants & Appraisers, LLC. with the usual reason being real estate and mortgage transactions. Some other reasons for getting an appraisal include:
Is an appraisal the same as a home inspection? (List of questions)The appraiser is not a home inspector and does not do a comprehensive home inspection. A third-party home inspector will judge the structure of the house, from the roof to the foundation. Generally, a home inspection report will explain the amenities and the requirements of the house: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, visible 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 apples and oranges. The CMA uses market trends to conduct most of their business. Appraisals use comparable sales which are verifiable resources. The appraisal report will also include area and building values. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
Who's behind the report is hands down 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 have specific competence when it comes to home valuation. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Moreover, the appraiser is an independent voice, with no vested interest in the value of a home, unlike the real estate agent, who gets a commission based upon the price of the home.
What does the appraisal report contain? (List of questions)Every appraisal should reflect a supported estimate of value and should clearly state the following:
Once the appraisal has been delivered, how can I have assurance that the final number is accurate?(List of questions) In the documentation of an appraisal, each appraiser must ensure the following:
Who are an appraiser's customers?(List of questions) Most of the time, appraisers are hired by mortgage lenders to estimate the value of a home involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.
Where does Classic Consultants & Appraisers, LLC. get the information used to estimate values in Essex County or other areas?(List of questions) Collecting information is one of the primary occupations of an appraiser. Data can be categorized as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.
General data is gathered from a many sources. To find out about recently sold homes to be used as "comps", an appraiser will often go to the local Multiple Listing Service. Tax records and other public documents verify actual sales prices in a market. 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 collective knowledge gained from creating appraisals for other houses in the same market.
How can a licensed appraiser help me?(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 doesn't leave your home on the market too long; 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 Classic Consultants & Appraisers, LLC. is the best documentation to ensure assets are divided fairly. Simply put, a home is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.
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. This added plan takes care of the lender in case a borrower defaults on the loan and the market price of the house is less than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.
Does the appraiser need anything from the homeowner in advance?(List of questions) The first step in most appraisals is the property inspection. 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 status of its features. Inside, make sure it is clutter free and that we can get to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of exterior walls.
You can make things go faster and improve the accuracy of the appraisal report by having the following things on hand:
Define "Market Value"(List of questions) In real estate appraising, Market Value is commonly defined as:
Once complete, who actually owns the appraisal report?(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 entitled to a copy of the appraisal - it's usually bundled 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 engaging the appraiser for things outside securing a mortgage. In these situations, the appraiser may define how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can use the appraisal for any purpose.
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, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes
As a rule, the best ROI from renovating a home comes in the kitchen. 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 weren't far behind, returning 85%. Adding bedrooms and baths can also help the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.