Hornor Appraisal Company has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(Top) The appraisal process is an evaluation that produces an opinion of value. The appraiser will use a several "approaches," typically three, to conclude the estimation of market value. One of the processes in use is the Cost Approach, which is what it would cost to replace the improvements to the property, less the depreciation and physical dilapidation, plus the land value. The Sales Comparison Approach involves searching for similar homes in close proximity and discerning value based on making a comparison of those homes to the home in question. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a residential property. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it involves estimating what an investor would pay based on the capital generated by the property.
What does an appraiser do?(Top) An appraiser offers a professional, unbiased assessment of market value, to be used in making real estate transactions. Appraisers document their findings in appraisal reports.
Why would a person request your services?(Top) There are a lot of reasons to order an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for purchasing an appraisal report include:
My agent performed a CMA for me. Is that the same as an appraisal?(Top) Frankly, they share nothing in common. What the CMA depends on are vague trends. The appraisal depends on similar proven comparable sales. Also, the appraisal verifies other factors like condition, neighborhood and building prices. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
But the biggest difference is who's behind 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. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Moreover, the appraiser is an independent party, with no vested interest in the property's value, unlike the agent, whose income is tied to the price of the home.
After completing the report, how can I have assurance that the value conclusion is trustworthy?(Top) In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
Who employs appraisers?(Top) Typically, appraisers are hired by lenders to render a value opinion on property involved in a loan transaction - to make sure the real estate is truly adequate collateral for the loan. Attorneys and CPAs also hire appraisers for divorce and estate settlements.
Where does Hornor Appraisal Company get the data used to estimate values in Phillips County or other areas?(Top) One of the most important activities of an appraiser is to collect property data. Data can be split into Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.
General data is gathered from a variety of places. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. Tax records and other public documents verify actual sales prices in a market. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood service.
And most importantly, the appraiser assembles general data from his or her past experience in creating appraisals for other properties in the same market.
What can a full appraisal do for me?(Top) If you're making any kind of financial decision and the value of your home is relevant, you'll want a full appraisal. If you're selling your house, an appraisal helps you set a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Hornor Appraisal Company is the best way to ensure assets are divided properly. A house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making smart financial decisions.
What exactly is PMI and how can I get rid of it?(Top) PMI is short for for Private Mortgage Insurance. This additional plan covers the lender in case a borrower doesn't pay on the loan and the value of the property is less than what is owed 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?(Top) We start with an inspection of the home. During this process, the appraiser 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. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house . Trim any landscaping and relocate any items that would make it difficult to measure the structure. Indoors, make sure the appraiser can get to items like furnaces and water heaters.
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"?(Top) In real estate appraising, Market Value is commonly defined as:
Who has rights to the appraisal report?(Top) In most real estate transactions, the appraisal is ordered by the lender. 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 bundled with all the other closing documents - but is not entitled 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 cases, the appraiser may define how the appraisal can be used; 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.
Which home renovations add the most to the price?(Top) A home's location - what city it is in and even what part of that city - is key to this popular question. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes
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, returning 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 atypical for your neighborhood in terms of size.