Mark D Young Appraisal Services has answers to "Frequently Asked Questions"
Define the term "Appraisal"
Define the term "Appraisal"(List of questions) The appraisal process is an estimation that produces an opinion of value. There are three "common approaches to value" which helps the appraiser come to this opinion or estimate. The Cost Approach is one of the processes that real estate appraisers use to find value; it involves concluding what the improvements would cost minus physical deterioration, adding the land value. Another of the processes is the Sales Comparison Approach - which concerns finding a comparison to other similar properties within a close vicinity which have recently sold. 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.
What does an appraiser do?(List of questions) An appraiser produces an objective and well justified determination of market value, in the support of real estate exchanges. Appraisers document their professional analysis in appraisal reports.
What are the reasons a person would request services from Mark D Young Appraisal Services?(List of questions) There are a lot of reasons to obtain an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for ordering an report include:
How is an appraiser different than a home inspector? (List of questions)The appraiser is not a home inspector and does not do a complete home inspection. The purpose of a home inspection is to evaluate the structure of the property from bottom to top. Commonly, a home inspection report will discuss the amenities and the requirements of the property: air conditioning (weather permitting), electrical functions, 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.
My agent performed a CMA for me. Is that the same as an appraisal?(List of questions) Simply put, it's like comparing broadband and dial-up. The CMA uses market trends to generate most of their business. An appraisal relies on comparable sales that can be proven by public record. The appraisal report will also include neighborhood and building values. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.
The person behind the report is frankly the biggest difference between a CMA and an appraisal. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, Idaho licensed professional who has formed a career on valuing homes in and around Ada County is behind the appraisal. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a previously agreed upon fee for assignments, regardless of their outcome.
What does the appraisal report contain? (List of questions)Each report should demonstrate a believable value opinion and should document the following:
Once the assignment has been delivered, how can I have confidence that the value conclusion is veritable?(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 mortgage lenders to estimate the value of property involved in a loan transaction - to make sure the subject is indeed adequate collateral for the loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.
Where does Mark D Young Appraisal Services get the data used to estimate values in Ada County or other areas?(List of questions) One of the primary activities of an appraiser is to gather data. Data can be classified as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.
General data is received from a variety of places. Local Multiple Listing Services (MLS) have information on recently sold homes that could be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood system.
And last but not least, the appraiser assimilates 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?(List of questions) If you're making any kind of financial decision and the value of your home matters, you'll want a full appraisal. For those selling a home, you'll want to figure out 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 people settling an estate or divorce, an appraisal from Mark D Young Appraisal Services is the best way to ensure assets are split up properly. Simply put, a home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.
My mortgage statement has an item on it for PMI? Can I get rid of that?(List of questions) PMI is the common abbreviation for for Private Mortgage Insurance. It takes care of the lender if a borrower is unable to pay on the loan and the market price of the home is less than what is owed on the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.
How do I get ready for the appraiser?(List of questions) We start with an inspection of the property. 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. On the home's interior, pick up any clutter and make sure we can get to things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of outside walls.
To help speed things along as well as ensure a more accurate report, try if possible to have the following items:
How does an appraiser define "Market Value"?(List of questions) In real estate appraising, Market Value is commonly defined as:
Once complete, who actually owns the appraisal report?(List of questions) In most real estate transactions, the appraisal is ordered by the lender. 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 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 engaging the appraiser for things outside securing a mortgage. In these scenarios, the appraiser may define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can use the appraisal for any purpose.
Are some home improvements more worthwhile than others?(List of questions) It really depends on the market. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!
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 weren't far behind, yielding 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.