Ashe Appraisal, LLC has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(Top) The process of writing an appraisal consists of an investigation which leads to an opinion of value. This opinion or estimate is concluded by a formal process that typically uses the three main "common approaches to value". The Cost Approach is one of the approaches that appraisers use to find the value of a property; it involves discerning what the improvements would cost minus physical depreciation, plus the land value. The Sales Comparison Approach deals with searching for comparable properties nearby and discerning value based on making a comparison of those homes to the property in question. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a residential property. The Income Approach is mainly used for determining the market value of income-producing properties based on what an investor would pay based on the amount of income a property would bring in.
Describe what an appraiser does(Top) An appraiser generates a fair and credible assessment of market value, to be used in making real estate transactions. Appraisers demonstrate their professional findings in appraisal reports.
What would cause me to need your services?(Top) There are many reasons to purchase an appraisal from Ashe Appraisal, LLC with the most common reason being real estate and mortgage transactions. A few other reasons for ordering an report include:
Is an appraisal the same as a home inspection? (Top)Appraisers do not do complete home inspections and are not home inspectors. An inspection is a third-party investigation of the available structure and mechanical systems of a home, from the roof to the bottom. For the most part, a home inspection report will discuss the amenities and the necessities of the home: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.
What is the difference between an appraisal and a comparative market analysis (CMA)?(Top) Simply, they share nothing in common. The CMA uses market trends to conduct most of their business. Appraisals use similar sales which are valid resources. Location and architectural costs are also precedent in an appraisal. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.
The credentials of the person creating the report is frankly the most significant difference between a CMA and an appraisal. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, state licensed professional who made their livelihood on valuing real estate in and around Collin County creates the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to accept a flat fee for assignments, regardless of their value conclusion.
What are the contents of an appraisal report? (Top)Every appraisal must indicate a believable value opinion and must document the following:
Once the report has been delivered, what assurance is there that the value conclusion is veritable?(Top) In communicating an appraisal report, each appraiser must ensure the following:
Who are an appraiser's customers?(Top) Mortgage lenders are an appraiser's typical client, requesting their services to ensure property involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also hire appraisers for asset division and estate settlements.
Where does Ashe Appraisal, LLC get the data used to estimate values in Collin County or other areas?(Top) One of the most important activities of an appraiser is to collect property data. Data can be described as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser while on site.
General data is received from a variety of places. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. Tax records and other public documents reveal 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 service.
And last but not least, the appraiser assembles general data from his or her past experience in doing assignments for other houses in the same market.
Why do I need a professional appraisal?(Top) 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. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Ashe Appraisal, LLC is the best way to ensure assets are divided fairly. A home is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.
My mortgage statement has an item on it for PMI? Can I get rid of that?(Top) PMI is short for for Private Mortgage Insurance. It covers the lender in the event a borrower doesn't pay on the loan and the value of the house is less than what is owed on 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?(Top) 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 amenities. Inside, make sure it is clutter free and that we can get to things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of outside walls.
The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
What is "Market Value?"(Top) In real estate appraising, Market Value is commonly defined as:
Does the appraisal belong to the bank or the consumer?(Top) 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 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.
The exception to this rule is when a home owner engages an appraiser directly. 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 stipulated otherwise, the home owner can use the appraisal for any purpose.
Which home renovations add the most to the price?(Top) Like all things real estate, this is dependent on a home's location. 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 investment. 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, yielding 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.