High Country Appraisals, Inc. has answers to "Frequently Asked Questions"
Define the term "Appraisal"
Define the term "Appraisal"(Top) The method of creating an appraisal consists of an inspection which leads to an opinion of value. This opinion or estimate is arrived at by a formal method that typically utilizes the three main "common approaches to value". One of the processes in use is the Cost Approach, which finds what it would cost to replace the improvements to the home, less the depreciation and physical deterioration, plus the land value. The Sales Comparison Approach involves finding similar properties in the vicinity and figuring out the value based on making a comparison of those properties to the property being appraised. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a residential property. One of the least common approaches in appraising homes is the Income Approach, which is mainly used to figure the value of a property based on what an investor would pay based on the capital produced by the building.
What does an appraiser do?(Top) An appraiser forumlates an objective and well supported determination of market value, to be used in making real estate transactions. Appraisers demonstrate their professional analysis in appraisal reports.
What would cause me to need a real estate appraisal?(Top) There are many reasons to get an appraisal from High Country Appraisals, Inc. with the usual reason being real estate and mortgage transactions. Other reasons for purchasing an appraisal report include:
How is an appraisal different than a home inspection? (Top)Appraisers do not do provide house inspections and are not home inspectors. The purpose of a home inspection is to evaluate the structure of the house from foundation to top. The usual home inspector's report will contain an evaluation of the integrity of the property's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.
Is an appraisal the same as a comparative market analysis(CMA)?(Top) Honestly, they have nothing in common. What the CMA relies upon are superficial trends. The appraisal is reliant on similar proven comparable sales. The appraisal report will also include neighborhood and construction prices. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.
The person creating the report is hands down the most significant difference between a CMA and an appraisal. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, North Carolina licensed professional who made their livelihood on valuing real estate in and around Watauga County creates the appraisal. Further, the appraiser is an independent party, with no vested interest in the value conclusion, unlike the agent, who gets a commission based upon the price of the home.
What's in an appraisal report? (Top)The main objective of an appraisal document is to give a value opinion, and depending on the scope of the report, you'll usually see the following:
After completing the appraisal, how can I have assurance that the final number is legitimate?(Top) In the documentation of an appraisal, each appraiser must make sure of the following:
Who hires an appraiser?(Top) Mortgage lenders are an appraiser's typical client, requiring their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.
Where does an appraiser get the information used to estimate values in Watauga County or other areas?(Top) Compiling data is one of the primary roles of an appraiser. Data can be classified 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 received from a number of places. To research recently sold homes to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. Tax records and other public documents reveal actual sales prices in a market. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood product.
And last but not least, the appraiser assimilates general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.
How can a licensed appraiser help me?(Top) If you're making some sort of financial decision and the value of your home is relevant, you'll want a full appraisal. If you're selling your home, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. When buying, you can avoid overpaying by commissioning an independent appraisal. For those settling an estate or divorce, an appraisal from High Country Appraisals, Inc. is the best way to ensure assets are split up fairly. 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 an acronym for Private Mortgage Insurance. This supplementary plan takes care of the lender if a borrower doesn't pay on the loan and the market price of the house is less than the loan balance. 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) We begin with an inspection of the property. 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 features. Inside, pick up any clutter and make sure we can find our way to things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of exterior walls.
The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
How does an appraiser define "Market Value"?(Top) In real estate appraising, Market Value is commonly defined as:
Does the appraisal belong to the bank or the consumer?(Top) For mortgage transactions, the lender orders 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.
It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these cases, the appraiser may define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can use the appraisal for any purpose.
Are some home improvements more worthwhile than others?(Top) 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
No matter where you go, however, renovating a kitchen is almost always a safe move. 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 were second, returning 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.