TRA-Times Realty Appraisals, Inc. has answers to "Frequently Asked Questions"
Define the term "Appraisal" Define the term "Appraisal" (Top)The procedure of producing an appraisal consists of an estimation which leads to an opinion of value. This opinion or estimate is arrived at by using a formal process that commonly uses the three main "common approaches to value". The Cost Approach is one of the processes that appraisers use to find the value of a house; it involves figuring what the improvements would cost without physical deterioration, adding the land value. The Sales Comparison Approach involves finding similar houses in close proximity and discerning value based on making a comparison of those homes to the house being appraised. Being the most common approach, the Sales Comparison Approach tends to be the most precise and best indicator of market value for a home. The Income Approach is mainly used for determining the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.What does an appraiser do? (Top)An appraiser generates a fair and credible assessment of market value, in the support of real estate exchanges. Appraisers show their conclusions in appraisal reports.What are the reasons I would need your services? (Top)There are a lot of reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for purchasing an appraisal report include:
How is an appraisal different than a home inspection? (Top)The appraiser is not a home inspector nor does he/she do a full home inspection. An inspection is a third-party investigation of the accessible structure and appliances of a property, from the roof to the foundation. The stereotypical home inspector's report will contain an evaluation of the condition of the home'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.What is the difference between an appraisal and a comparative market analysis (CMA)? (Top)To be blunt, it's apples and oranges. The CMA uses market trends to generate most of their business. The appraisal is reliant on specific verifiable comparable sales. In addition, the appraisal verifies other factors like condition, neighborhood and construction costs. 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 frankly the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. A certified, Pennsylvania licensed professional who made their livelihood on valuing properties in and around Delaware County is behind the appraisal. Further, the appraiser is an unbiased voice, with no vested interest in the property's value, unlike the real estate agent, who gets a commission based upon the value of the home. What can I expect to see in my appraisal report? (Top)The main point of an appraisal report is to provide a value opinion, and depending on the scope of the report, one will customarily see the following:
Once the report is done, how can I have confidence that the final number is accurate? (Top)In the documentation of an appraisal, each appraiser must make sure of the following:
Who hires TRA-Times Realty Appraisals, Inc. (Top)Commonly, appraisers are called upon by mortgage lenders to render a value opinion on real estate involved in a loan transaction - to make sure the house is truly adequate collateral for the loan. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.Where does TRA-Times Realty Appraisals, Inc. get the data used to estimate values in Delaware County or other areas? (Top)Gathering data is one of the primary things an appraiser performs. Data can be split into Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.General data is received from a many sources. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood servers. And last but not least, the appraiser gathers general data from his or her collective knowledge gained from doing assignments for other properties in the same market. Why should I hire a licensed appraiser? (Top)Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. If you're selling your home, an appraisal will help you determine the most appropriate price. When buying, you can avoid overpaying by getting an independent appraisal. For parties settling an estate or divorce, an appraisal from TRA-Times Realty Appraisals, Inc. is the best documentation to ensure assets are split up properly. A home is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.What exactly is PMI and how can I get rid of it? (Top)PMI is an acronym for Private Mortgage Insurance. PMI protects the lender if a borrower defaults on the loan and the value of the property is less than the balance of 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 status of its amenities. On the home's interior, pick up any clutter and make sure 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 outside walls.You can make the inspection go faster and improve the quality of the appraisal report by having the following things on hand:
Define "Market Value" (Top)In real estate appraising, Market Value is commonly defined as:
Who actually owns the appraisal report? (Top)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 report - it's usually included with all the other closing documents - but is not allowed 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 situations, the appraiser may state the purpose of the appraisal; 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. Are some home improvements more worthwhile than others? (Top)The answer to this is different depending upon the location of the home. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homesAs 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, yielding 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating. |