Rushmore Appraisal Group, LLC has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(List of questions) The appraisal process is an evaluation that produces an opinion of value. The appraiser will use a few "approaches," typically three, to come to the estimation of market value. The Cost Approach is one of the processes that real estate appraisers use to find the value of a home; it involves discerning what the improvements would cost without physical deterioration, adding the land value. Easily the most common approach in finding the value of a house is the Sales Comparison Approach which involves figuring a comparison to comparable homes close by. The Sales Comparison Approach is commonly the most accurate and best indicator of a liklely sales price for a home. The third approach is the Income Approach, which is the best method in appraising income producing properties - it deals with estimating what an investor would pay based on the money generated by the property.
What does an appraiser do?(List of questions) An appraiser generates an unbiased and well justified determination of market value, to be used in making real estate transactions. Appraisers summarize their investigation in appraisal reports.
What would cause me to require a real estate appraisal?(List of questions) There are a lot of reasons to order an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for getting an report include:
What is the difference between an appraisal and a home inspection? (List of questions)The appraiser is not a home inspector and he or she does not do a complete home inspection. An inspection is a third-party evaluation of the accessible structure and appliances of a property, from the roof to the bottom. Generally, a home inspection report will evaluate the amenities and the necessities of the property: air conditioning (weather permitting), electrical services, 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 visible structures.
Is an appraisal the same as a comparative market analysis(CMA)?(List of questions) Simply put, it's like comparing opera to country. The CMA relies on vague trends in the market. An appraisal utilizes comparable sales that can be verified by records. Location and construction values are also precedent in an appraisal. All a CMA does is generate a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
But the largest differentiator is the person creating the report. A CMA is created by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Further, the appraiser is an independent party, with no conditional interest in the property's value, unlike the real estate agent, whose income is tied to the price of the home.
What's in an appraisal report? (List of questions)The main purpose of an appraisal report is to provide a value opinion, and depending on the scope of the report, one will customarily see the following:
Upon completion of the appraisal, how can I have certainty that the final number is valid?(List of questions) In communicating an appraisal report, each appraiser must make sure of the following:
Who engages the services of appraisers?(List of questions) Mortgage lenders are an appraiser's typical customer, needing 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 Rushmore Appraisal Group, LLC get the data used to estimate values in Fairfield County or other areas?(List of questions) One of the most important things an appraiser does is to compile property data. Data can be categorized as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.
General data is collected from a variety of sources. To research recent sales to be used as "comps", we typically use the local Multiple Listing Service. To verify actual sales prices, we look at items in the assessor's office and other public documents that are usually online nowadays. Appraisers often need 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 assimilates general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.
Why do I need a professional appraisal?(List of questions) If you're involved in any kind of financial decision and the value of your home is relevant, you'll want an appraisal. If you're selling your home, an appraisal will help you determine the most appropriate price. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from Rushmore Appraisal Group, LLC is the best documentation to ensure assets are split up properly. A house is often the single, largest financial asset anybody owns. Knowing its true value means you can make the right financial decisions.
My mortgage statement has an item on it for PMI? Can I get rid of that?(List of questions) PMI is an acronym for Private Mortgage Insurance. PMI takes care of the lender if a borrower defaults 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.
Do you need anything from the homeowner in advance?(List of questions) We begin with an inspection of the home. 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. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house . Trim any shrubs and move any items that would get in our way while we measure the structure. Indoors, make sure we can easily access items like furnaces and water heaters.
You can make the inspection go faster and improve the accuracy of the appraisal report by having the following things on hand:
What is "Market Value?"(List of questions) In real estate appraising, Market Value is commonly defined as:
Does the appraisal belong to the bank or the consumer?(List of questions) 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 certainly entitled to a copy of the appraisal - it's usually bundled with all the other closing documents - but is not allowed 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 scenarios, the appraiser may stipulate 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 do whatever they want with the appraisal.
How can I get the most ROI out of home improvements?(List of questions) Like all things real estate, this is dependent on a home's location. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.
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 were second, returning 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.