LIND APPRAISALS AND ASSOCIATES has answers to "Frequently Asked Questions"
What is an appraisal?
What is an appraisal?(Top) An appraisal is an estimation leading to an opinion of value. The appraiser will typically use a several "approaches," typically three, to arrive at the estimation of market value. The Cost Approach is one of the processes that appraisers use to find value; it involves discerning what the improvements would cost minus physical deterioration, plus the land value. The Sales Comparison Approach deals with searching for comparable homes in close proximity and discerning value based on comparing those homes to the home being appraised. Being the most commonly used approach, the Sales Comparison Approach tends to be the most accurate and best indicator of market value for a property. One of the least common approaches in appraising residential properties is the Income Approach, which is generally used to figure the value of a property based on what an investor would pay based on the income produced by the building.
What does an appraiser do?(Top) An appraiser provides an unbiased and well supported opinion of market value, to be used in making real estate transactions. Appraisers reveal the details of their professional findings in appraisal reports.
What would cause me to need services from LIND APPRAISALS AND ASSOCIATES?(Top) There are many reasons to purchase an appraisal from LIND APPRAISALS AND ASSOCIATES with the usual reason being real estate and mortgage transactions. Some other reasons for ordering an appraisal report include:
My agent performed a CMA for me. Is that the same as an appraisal?(Top) Frankly, it's apples and oranges. The CMA uses market trends to conduct most of their business. Appraisals use comparable sales which are verifiable resources. The appraisal report will also contain neighborhood and construction costs. All a CMA does is generate a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.
But the most significant factor is who's creating the report. Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. The appraisal is produce by a licensed, certified professional who makes a living 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 collect only a flat fee for work they perform, regardless of their outcome.
Once the assignment has been completed, how can I have a guarantee that the final number is accurate?(Top) In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
Who hires an appraiser?(Top) Mortgage lenders are an appraiser's most likely customer, requiring their services to ensure real estate 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 LIND APPRAISALS AND ASSOCIATES get the data used to estimate values in New Haven County or other areas?(Top) Compiling information is one of the main things an appraiser engages in. Data can be classified as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.
General data is collected from a numerous sources. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. To verify actual sales prices, we look at tax records and other public documents that are usually online nowadays. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood product.
And last but not least, 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?(Top) An appraisal is a worthwhile anytime your home's value is pertinent to some financial decision. When selling your house, an appraisal assists you in setting the most appropriate price. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.
My mortgage statement has an item on it for PMI? Can I get rid of that?(Top) PMI stands for Private Mortgage Insurance. It protects the lender in case a borrower doesn't pay on the loan and the market price of the house is less than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.
How do I get ready for the appraiser?(Top) 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. Inside, pick up any clutter and make sure we can get to 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.
You can make things go faster and improve the quality of the appraisal report by having the following things on hand:
How does an appraiser define "Market Value"?(Top) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Who has rights to the appraisal report?(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 included with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.
This rule doesn't apply when a home owner engages an appraiser directly. 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 stipulated 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?(Top) This really depends on where the home is. 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.
No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 are right up there with kitchens, yielding 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.