Lone Star Appraisals has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(List of questions) An appraiser performs an evaluation that generates an opinion of value. The real estate appraiser will use a several "approaches," typically three, to come to the estimation of market value. One of the methods in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the house, minus age and physical dilapidation, plus the land value. Another of the methods is the Sales Comparison Approach - which concerns discovering a comparable analysis to other similar nearby properties which have recently sold. The Sales Comparison Approach is commonly the most definitive and best indicator of a liklely sales price for a residence. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it deals with estimating what an investor would pay based on the money produced by the property.
What does an appraiser do?(List of questions) An appraiser generates a fair and credible determination of market value, in the support of real property transactions. Appraisers illustate their professional findings in appraisal reports.
What are the reasons a person would require your services?(List of questions) There are a lot of reasons to purchase an appraisal from Lone Star Appraisals with the most common reason being real estate and mortgage transactions. Some other reasons for obtaining an report include:
How is an appraisal different than a home inspection? (List of questions)Home inspectors do not produce an opinion of value and do not do appraisal reports. The purpose of a home inspection is to investigate the structure of the home from basement to attic. The standard 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 visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.
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 depends on are superficial trends. Appraisals use similar sales which are valid resources. The appraisal report will also contain area and construction prices. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.
But the most significant factor is the person creating the report. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, Texas licensed professional who has formed a career on valuing real estate in and around Navarro 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 collect only a previously agreed upon sum for assignments, regardless of their outcome.
What does the appraisal report contain? (List of questions)Every report must demonstrate a believable value opinion and must clearly state the following:
Once the report is done, how can I have a guarantee that the value conclusion is trustworthy?(List of questions) In communicating an appraisal report, each appraiser must make sure of the following:
Who hires Lone Star Appraisals(List of questions) Most of the time, appraisers are called upon by mortgage lenders to estimate the value of real estate involved in a loan transaction - to make sure the house is indeed adequate collateral for the loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.
Where does Lone Star Appraisals get the information used to estimate values in Navarro County or other areas?(List of questions) Collecting data is one of the main tasks an appraiser performs. Data can be categorized 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 during an inspection.
General data is gathered from a many places. To find out about recently sold homes to be used as "comps", we typically go to the local Multiple Listing Service. To double-check actual sales prices, we look at tax records and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood service.
And most importantly, the appraiser gathers general data from his or her past experience in doing assignments for other properties in the same market.
Why do I need a professional appraisal?(List of questions) 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 house, an appraisal will help you determine a price that maximizes profit and reduces time on the market. When buying, be sure you're not overpaying by getting an independent appraisal. For those settling an estate or divorce, an appraisal from Lone Star Appraisals is the best documentation to ensure assets are divided evenly. Simply put, 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 stands for Private Mortgage Insurance. PMI takes care of the lender if a borrower defaults on the loan and the value of the property is lower 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?(List of questions) 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. The best thing you can do to help is make sure we have easy access to the exterior of the house . Trim any landscaping and move any items that would make it difficult to measure the structure. Indoors, make sure we can get to appliances like furnaces and water heaters.
To help speed things along as well as ensure a more accurate report, attempt if possible to have the following items:
What does "Market Value" mean?(List of questions) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Who actually owns the appraisal report?(List of questions) 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 appraisal - it's usually bundled with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.
The exception to this rule is when a home owner hires an appraiser directly. 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 stipulated otherwise, the home owner can do whatever they want with the appraisal.
Are some home improvements more worthwhile than others?(List of questions) It really depends on the market. 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.
As a rule, the most value returned 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, returning 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.