What is an Appraisal?
What is ''Market Value?
What do I have to do?
Who needs a home Appraisal?
What is the difference between an Appraisal and a Home Inspection?
What is the difference between an Appraisal and a Comparative Market Analysis (CMA)?
What happens if the value indicated on the Appraisal is less than I thought it would be?
How do I obtain a copy of the appraisal?
What is PMI and how can I get rid of it?
What is an appraisal?
An appraisal report contains the formal analysis of an appraiser’s professional, unbiased opinion of market value, to be used in making real estate decisions.
This opinion or estimate is arrived at through a formal process that typically uses the sales comparison approach (which involves making a comparison to other similar, nearby properties which have recently sold.) and may also use other approaches such at Cost Approach (which is what it would cost to replace the improvements, less physical deterioration and other factors, plus the land value) or the Income Approach (estimating what an investor would pay based on the income produced by the property). The Sales Comparison Approach is normally the most accurate and best indicator of value for a residential property. Contact me for a more detailed description of the appraisal process. ewelch@welchgroup.net or 610-331-7655.
What is ''Market Value?''
Fair market value is the most probable price that a property should bring (will sell for) in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, knowledgeably and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised; (3) a reasonable time is allowed for exposure to the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale.
What do I have to do?
You will have to schedule an appointment with the appraiser to inspect your home. The inspection could take anywhere from 10 minutes to an hour, depending on the type of and complexity of your home. The appraiser will take measurements, draw the layout, take photographs and determine the general condition of the property relative to a property in “average” condition.
You can also help by ensuring the property is safe and sound and able to be easily inspected from top to bottom. Any additional information or documentation that you can provide will assist the appraiser in completing a more accurate assessment of your home. Additional information and documentation includes, but is not limited to copies of the deed, tax bills, surveys, assessments, drawings or previous appraisals.
Who needs a Home Appraisal?
Anytime the value of your home is being used to make a financial decision, an appraisal helps. If you're selling your home, an appraisal helps you set the most appropriate value. If you're buying, it helps ensure that you don't overpay. If you're the executor of an estate or in the midst of a divorce, it ensures that property is divided fairly.
Reasons for ordering an appraisal include:
- Obtain a loan.
- Lower your tax burden.
- Establish the replacement cost of insurance.
- Contest tax assessments.
- Settle an estate.
- Provide a negotiating tool when purchasing real estate.
- Determine a reasonable price when selling real estate.
What is the difference between an appraisal and a home inspection?
The appraiser is not a home inspector nor does he/she do a complete home inspection. An inspection is a third-party evaluation of the accessible structure and mechanical systems of a house, from the roof to the foundation. The standard home inspector's report will include an evaluation of the condition of the home's heating system, 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.
What is the difference between an Appraisal and a Comparative Market Analysis (CMA)?
A CMA may be provided by a Real Estate Salesperson and provides a potential value range indicated by market trends.
An appraisal relies on verifiable comparable sales and data and provides an unbiased, documented opinion of value provided by a certified professional appraiser.
The two should not be confused.
What happens if the value indicated on the appraisal is less than I thought it would be?
If the value indicated on your appraisal is less than you or your lender thought is would be. You may provided any verifiable comparable sales data or other relevant information that you feel the appraiser may have overlooked. We will be happy to review the data and use it if applicable or else explain why we can not or did not use the provided data.
We cannot arbitrarily alter an opinion of value once it has been established. To do so would be a violation of the rules and regulations that a certified appraiser must follow. Please do not ask us to circumvent our legal obligation.
How do I obtain a copy of the appraisal?
The appraisal report is owned by the intended user/client as specified when the request for services is made. It does not matter who pays for the service, the original intended user(s) is the owner of the report. You may be entitled to a copy of the appraisal report, though must obtain that copy from your lender or the requesting client.
What if I change lenders and need the appraisal to be “re-assigned” to a new lender?
We are not permitted to reassign an appraisal once it has been released. The original intended user can not be altered. A new appraisal must be ordered and the property must be re-inspected and reevaluated. A discount in the appraisal fee may apply.
What is PMI and how can I get rid of it?
PMI stands for Private Mortgage Insurance. It insures a lender against loss on homes purchased with a down-payment of less than 20%. Once equity in the home reaches 20% you can eliminate the PMI payment in your loan. Contact me for a more detailed description of the appraisal process ewelch@welchgroup.net or 610-331-7655.
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