Value Able LLC has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal (Return to top)The process of performing an appraisal report consists of an investigation which forms an opinion of value. The real estate appraiser will typically use a several "approaches," typically three, to conclude the estimation of market value. The Cost Approach is one of the approaches that appraisers use to find value; it involves concluding what the improvements would cost without physical deterioration, plus the land value. The most common approach in finding the likely sales price of a house is the Sales Comparison Approach which concerns figuring a comparison to comparable homes nearby. The Sales Comparison Approach is commonly the most definitive and clearest indicator of a liklely sales price for a residential property. One of the least common approaches in appraising homes is the Income Approach, which is generally used to determine the market value of a property based on what an investor would pay based on the income produced by the building.
What does an appraiser do? (Return to top)An appraiser generates an objective and well substantiated determination of market value, to be used in making real estate transactions. Appraisers reveal the details of their professional analysis in appraisal reports.
What would cause me to request services from Value Able LLC? (Return to top)There are many reasons to order an appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for purchasing an report include:
Is an appraisal the same as a home inspection? (Return to top)Appraisers do not do complete home inspections and are not home inspectors. A third-party home inspector will inspect the structure of the house, from the top to the foundation. The archetypal house inspector's report will include 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 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)? (Return to top)To be blunt, it's like comparing sugar and saccharin. What the CMA relies upon are superficial trends. The appraisal is based on similar proven comparable sales. The appraisal report will also contain location and construction costs. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
But the most significant factor is the person behind the report. 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 produce by a licensed, certified professional who has made a career 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 accept a flat fee for work they perform, regardless of their value conclusion.
What's in an appraisal report? (Return to top)The main point of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, you'll usually see the following:
After completing the report, what guarantee is there that the value conclusion is veritable? (Return to top)In the documentation of an appraisal, each appraiser must ensure the following:
Who engages the services of appraisers? (Return to top)Typically, appraisers are hired by mortgage lenders to render a value opinion on property involved in a loan transaction - to make sure the real estate is truly adequate collateral for the loan. Attorneys and CPAs also hire appraisers for divorce and estate settlements.
Where does Value Able LLC get the data used to estimate values in Clark County or other areas? (Return to top)Collecting data is one of the primary functions of an appraiser. Data can be categorized as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.
General data is received from a variety of sources. To research recently sold homes to be used as "comps", we often use the local Multiple Listing Service. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers often need to report when a property is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.
And most importantly, the appraiser gathers general data from his or her past experience in creating appraisals for other properties in the same market.
Why should I hire a licensed appraiser? (Return to top)If you're making 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 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. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Value Able LLC is the best way to ensure assets are divided properly. A home is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.
How do I get ready for the appraiser? (Return to top)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 status of its features. On the home's interior, pick up any clutter and make sure 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.
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"? (Return to 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? (Return to top)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 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.
This rule doesn't apply when a home owner hires an appraiser directly. In these cases, the appraiser may stipulate the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can use the appraisal for any purpose.
Which home renovations add the most to the price? (Return to top)The added value of a particular amenity truly depends on the local market. For example, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!
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, an improvement that may not increase your value would be painting just for the sake of redecorating.