Myers Appraisal Service has answers to "Frequently Asked Questions"
What is an appraisal?
What is an appraisal?(List of questions) The procedure of producing an appraisal consists of an estimation which forms an opinion of value. There are three "common approaches to value" which assists the real estate appraiser arrive at this opinion or valuation. One of the processes in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the home, minus depreciation and physical dilapidation, adding the land value. The Sales Comparison Approach involves finding similar properties in the vicinity and discerning value based on making a comparison of those properties to the home being investigated. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a home. The Income Approach is generally used for finding the market value of income-producing properties based on what an investor would pay based on the amount of income a property produce.
Describe what an appraiser does(List of questions) An appraiser produces a fair and credible opinion of market value, in the support of real estate transactions. Appraisers exhibit their professional investigation in appraisal reports.
What would cause me to request a real estate appraisal?(List of questions) There are many reasons to obtain an appraisal from Myers Appraisal Service with the usual reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal include:
How is an appraisal different than a home inspection? (List of questions)The appraiser is not a home inspector nor does he/she do a comprehensive home inspection. An inspection is a third-party evaluation of the available structure and systems of a home, 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 systems, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, visible 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) To be honest, they have nothing in common. What the CMA relies upon are vague trends. Appraisals use similar sales which are valid resources. Area and building costs are also a priority in an appraisal. A CMA delivers 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 the person doing 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. A certified, Virginia licensed professional who made a career on valuing properties in and around Loudoun County creates the appraisal. Moreover, the appraiser is an independent voice, with no vested interest in the property's value, unlike the agent, whose income is tied to the price of the home.
What does the appraisal report contain? (List of questions)Every appraisal must indicate a believable value opinion and should identify the following:
Once the appraisal has been completed, what guarantee is there that the final number is trustworthy?(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) Most of the time, appraisers are employed by lenders to render a value opinion on a home involved in a loan transaction - to make sure the real estate is indeed adequate collateral for the loan. Attorneys and CPAs also hire appraisers for asset division and estate settlements.
Where does Myers Appraisal Service get the information used to estimate values in Loudoun County or other areas?(List of questions) Collecting data is one of the primary tasks an appraiser engages in. Data can be described as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.
General data is collected from a many places. To look up recently sold homes to be used as "comps", we often go to the local Multiple Listing Service. To double-check actual sales prices, we research items in the assessor's office and other public documents that are usually online nowadays. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood service.
And most importantly, the appraiser assimilates 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?(List of questions) An appraisal is a valuable tool anytime your home's value is relevant to some financial decision. 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. When buying, be sure you're not overpaying by getting an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A home 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?(List of questions) PMI is an acronym for Private Mortgage Insurance. It protects the lender in the event a borrower defaults on the loan and the value of the house is less than what the borrower still owes 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?(List of questions) 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. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and relocate any items that would make it difficult to measure the structure. Indoors, make sure we can get to appliances like furnaces and water heaters.
You can make our visit go faster and improve the quality of the appraisal report by having the following things on hand:
How does an appraiser define "Market Value"?(List of questions) In real estate appraising, Market Value (as opposed to Fair 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. Even though it's the buyer that eventually pays for the report, the lender is the intended user. 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 engages an appraiser directly. In these scenarios, 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?(List of questions) It really depends on the market. 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
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, yielding 85%. Adding bedrooms and baths can also increase the value of your home (when done well) as long as your home doesn't then become overbuilt for your neighborhood in terms of size.