Marlowe Appraisal & RE Inc. has answers to "Frequently Asked Questions"
Define the term "Appraisal"
Define the term "Appraisal"(Top) An appraisal is a thought process allowing the appraiser to come to an opinion of value. There are three "common approaches to value" which helps the appraiser arrive at this opinion or valuation. One of them is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value. Another of the processes is the Sales Comparison Approach - which concerns making a comparable analysis to other similar properties within a close proximity which have recently sold. Being the most commonly used approach, the Sales Comparison Approach tends to be the most accurate and best indicator of market value for a house. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it deals with estimating what an investor would pay based on the capital produced by the property.
What does an appraiser do?(Top) An appraiser forumlates a fair and credible assessment of market value, often in the context of a real estate purchase. Appraisers present their professional investigation in appraisal reports.
Why would I request services from Marlowe Appraisal & RE Inc.?(Top) There are a lot of reasons to purchase an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for getting an report include:
My agent performed a CMA for me. Is that the same as an appraisal?(Top) Frankly, they have nothing in common. The CMA depends on indistinct local market trends. Appraisals use comparable sales which are verifiable resources. The appraisal report will also include neighborhood and building costs. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.
The credentials of the person behind the report is hands down 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 Lake County creates the appraisal. Moreover, the appraiser is an independent party, with no vested interest in the value of a home, unlike the real estate agent, whose income is tied to the price of the home.
Once the report has been completed, what assurance is there that the final number is veritable?(Top) In the documentation of an appraisal, each appraiser must ensure the following:
Who are an appraiser's customers?(Top) Mortgage lenders are an appraiser's typical client, requiring their services to ensure a home involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.
Where does an appraiser get the information used to estimate values in Lake County or other areas?(Top) One of the primary tasks an appraiser performs is to gather data. Data can be divided into Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.
General data is gathered from a numerous places. To look up recent sales to be used as "comps", we typically use the local Multiple Listing Service. Tax records and other public documents reveal actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood servers.
And last but not least, the appraiser gathers general data from his or her collective knowledge gained from doing assignments for other properties 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 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. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. Simply put, a house 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?(Top) PMI is short for for Private Mortgage Insurance. This supplementary plan takes care of the lender in case a borrower is unable to pay on the loan and the market price of the home is less than the loan balance. 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.
How do I get ready for the appraiser?(Top) We begin with an inspection of the home. During this process, the appraiser 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. 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 bushes so we can be free to get an accurate measurement of exterior walls.
You can make things go faster and improve the quality of the appraisal report by having the following things on hand:
How does an appraiser define "Market Value"?(Top) In real estate appraising, Market Value is commonly defined as:
Who has rights to the appraisal report?(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.
It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these scenarios, 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 do whatever they want with the appraisal.
How can I get the most ROI out of home improvements?(Top) A home's location - what city it is in and even what part of that city - is key to this popular question. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want
As a rule, the most value returned from renovating a home comes in the kitchen. 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, yielding 85%. Adding bedrooms and baths can also help the value of your home (when done well) as long as your home doesn't then become an oddball for your neighborhood in terms of size.