RVS, INC. has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(Go to list of questions) The process of producing an appraisal report deals with an inspection which forms an opinion of value. The real estate appraiser will use a few "approaches," typically three, to conclude the estimation of market value. One of the methods 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 involves finding similar homes in the vicinity and finding value based on comparing those prior sales to the property in question. The Sales Comparison Approach is normally the most accurate and best indicator of a liklely sales price for a residence. One of the least common approaches in appraising residential properties is the Income Approach, which is generally used to determine the value of a property based on 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 an unprejudiced and well supported determination of market value, in the support of real property exchanges. Appraisers show their professional findings in appraisal reports.
What are the reasons someone would need your services?(Go to list of questions) There are many reasons to purchase an appraisal from RVS, INC. with the most common reason being real estate and mortgage transactions. Other reasons for obtaining an appraisal report include:
What is the difference between an appraisal and a home inspection? (Go to list of questions)Appraisers do not do complete home inspections and are not home inspectors. An inspection is a third-party investigation of the available structure and electrical and mechanical systems of a property, from the top to the bottom. Generally, a home inspection report will explain the amenities and the necessities of the house: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.
My agent performed a CMA for me. Is that the same as an appraisal?(Go to list of questions) To be blunt, it's like comparing sugar and saccharin. The CMA depends on vague market trends. Appraisals use comparable sales which are valid resources. The appraisal report will also contain location and building prices. 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 most significant factor is who's behind the report. Real estate agents produce CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a flat sum for assignments, regardless of their value conclusion.
What are the contents of an appraisal report? (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:
Upon completion of the report, how can I have confidence that the value indicated is valid?(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 engages the services of appraisers?(Go to list of questions) Mortgage lenders are an appraiser's most likely client, requiring their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.
Where does an appraiser get the data used to estimate values in Chautauqua County or other areas?(Go to list of questions) Compiling data is one of the primary occupations 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 during an inspection.
General data is collected from a many sources. Local Multiple Listing Services (MLS) have information on recently sold homes that could be used as comparables. To verify actual sales prices, we research tax records and other public documents that are usually online nowadays. 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 product.
And most importantly, the appraiser assembles 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?(Go to list of questions) If you're making any kind of financial decision and the value of your home is relevant, you'll want to hire a licensed appraiser. For those selling a home, you'll want to determine the price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from RVS, INC. is the best way to ensure assets are split up properly. 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 an acronym for Private Mortgage Insurance. PMI covers the lender if a borrower doesn't pay on the loan and the market price of the house 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.
Does the appraiser need anything from the homeowner in advance?(Go to 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 status of its features. On the home's interior, pick up any clutter and make sure we can access things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of outside walls.
The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
What does "Market Value" mean?(Go to list of questions) In real estate appraising, Market Value is commonly defined as:
Who has rights to the appraisal report?(Go to 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 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 cases, 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.
I want to get more for my house. Where should I spend money renovating?(Go to list of questions) 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
No matter where you go, however, renovating a kitchen is almost always a safe move. 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, yielding 85%. On the contrary, work that may not add value would be painting just for the sake of redecorating.