Sterling Appraisal Group has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(Top) The procedure of writing an appraisal report deals with an estimation which forms an opinion of value. This opinion or estimate is discerned through a formal process that commonly utilizes three "common approaches to value". 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. The Sales Comparison Approach deals with finding comparable houses in the vicinity and discerning value based on making a comparison of those prior sales to the home being appraised. The Sales Comparison Approach is normally the most definitive and clearest indicator of a liklely sales price for a residential property. The Income Approach is primarily used for finding the market value of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in.
Describe what an appraiser does(Top) An appraiser generates a fair and credible opinion of market value, often in the context of a real estate sale. Appraisers document their professional investigation in appraisal reports.
Why would someone require your services?(Top) There are a lot of reasons to purchase an appraisal from Sterling Appraisal Group with the most common reason being real estate and mortgage transactions. A few other reasons for obtaining an report include:
My agent performed a CMA for me. Is that the same as an appraisal?(Top) Honestly, they share nothing in common. What the CMA relies upon are superficial trends. An appraisal utilizes comparable sales that can be validated by public record. Location and building prices are also a priority in an appraisal. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.
But the biggest difference is who's creating the report. Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, Washington licensed professional who made their livelihood on valuing properties in and around King County is behind the appraisal. Further, the appraiser is an independent party, with no conditional interest in the value of a home, unlike the real estate agent, whose income is tied to the value of the home.
Once the report has been completed, what assurance is there that the value indicated is veritable?(Top) In communicating an appraisal report, each appraiser must make sure of the following:
Who are an appraiser's customers?(Top) Mortgage lenders are an appraiser's typical client, requiring their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.
Where does an appraiser get the information used to estimate values in King County or other areas?(Top) Compiling information is one of the primary tasks an appraiser does. Data can be classified as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.
General data is received from a numerous places. To look up recently sold homes to be used as "comps", we often go to the local Multiple Listing Service. Tax records and other courthouse documents reveal 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 collective knowledge gained from doing assignments for other properties in the same market.
What can a full appraisal do for me?(Top) Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. When selling your home, an appraisal will help you determine a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from Sterling Appraisal Group is the best way to ensure assets are divided evenly. A house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.
What exactly is PMI and how can I get rid of it?(Top) PMI is the common abbreviation for for Private Mortgage Insurance. It guards the lender in the event a borrower is unable to pay on the loan and the value of the home is less than what is owed on the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.
How do I get ready for the appraiser?(Top) The first step in most appraisals is the home 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 condition of its amenities. On the home's interior, pick up any clutter and make sure we can find our way to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of outside walls.
You can make the inspection go faster and improve the quality of the appraisal report by having the following things on hand:
What does "Market Value" mean?(Top) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Who has rights to the appraisal report?(Top) 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 hiring the appraiser for things outside securing a mortgage. In these cases, 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.
Which home renovations add the most to the price?(Top) This really depends on where the home is. 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 boost the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size.