City Wide Appraisal Group has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(Go to list of questions) An appraisal is an inspection that concludes with an opinion of value. There are three "common approaches to value" which assists the appraiser arrive at this opinion or estimate. One of the processes is the Cost Approach - which is how much capital would be required to replace the improvements, less physical deterioration and other factors, then adding the land value. Another of the approaches is the Sales Comparison Approach - which involves making a comparable analysis to other similar nearby properties which have recently sold. The Sales Comparison Approach is normally the most definitive and best indicator of value for a residence. 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 income produced by the property.
Describe what an appraiser does(Go to list of questions) An appraiser produces a professional, unbiased assessment of market value, to be used in making real estate transactions. Appraisers illustate their expert analysis in appraisal reports.
Why would a person require services from City Wide Appraisal Group?(Go to list of questions) There are a lot of reasons to obtain an appraisal from City Wide Appraisal Group with the most common reason being real estate and mortgage transactions. A few other reasons for getting an appraisal include:
How is an appraisal different than a home inspection? (Go to list of questions)Appraisers do not do complete home inspections and are not home inspectors. The point of a home inspection is to investigate the structure of the home from basement to top. Usually, a home inspection report will evaluate the amenities and the requirements of the property: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.
Is an appraisal the same as a comparative market analysis(CMA)?(Go to list of questions) Simply, they have nothing in common. The CMA relies on vague trends in the market. The appraisal relies on similar definite comparable sales. Location and architectural values 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.
The credentials of the person behind the report is hands down the most significant difference between a CMA and an appraisal. 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. A certified, state licensed professional who has formed a career on valuing real estate in and around Pinellas County creates the appraisal. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a previously agreed upon sum for assignments, regardless of their value conclusion.
What does the appraisal report contain? (Go to list of questions)The main objective 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, one will customarily see the following:
After completing the appraisal, what guarantee is there that the value indicated is accurate?(Go to list of questions) In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
Who are an appraiser's customers?(Go to list of questions) Most of the time, appraisers are hired by mortgage lenders to render a value opinion on real estate involved in a loan transaction. Attorneys and CPAs also hire appraisers for asset division and estate settlements.
Where does an appraiser get the information used to estimate values in Pinellas County or other areas?(Go to list of questions) Compiling information is one of the primary functions 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 gathered by the appraiser while on site.
General data is received from a many sources. To find out about recently sold homes to be used as "comps", we often use the local Multiple Listing Service. To double-check actual sales prices, we look at tax records and other public documents that are usually online nowadays. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood servers.
And most importantly, the appraiser assimilates general data from his or her collective knowledge gained from doing assignments for other houses in the same market.
How can a licensed appraiser help me?(Go to list of questions) 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 figure out 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 people settling an estate or divorce, an appraisal from City Wide Appraisal Group is the best way to ensure assets are split up evenly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making wise financial decisions.
What exactly is PMI and how can I get rid of it?(Go to list of questions) PMI is the common abbreviation for for Private Mortgage Insurance. This additional policy protects the lender in case a borrower doesn't pay on the loan and the market price of the home is lower 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.
Should I do anything in advance of the appraisal inspection(Go to list of questions) The first step in most appraisals is the home inspection. During this process, we 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, make sure it is clutter free and that 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 exterior walls.
The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
Define "Market Value"(Go to list of questions) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Once complete, who actually owns the appraisal report?(Go to list of questions) 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 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 hires an appraiser directly. In these situations, the appraiser may define how the appraisal can be used; 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?(Go to list of questions) It really depends on the market. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.
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 were second, yielding 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.