Gentry Appraisal Service,Inc. has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(List of questions) The appraisal process is an evaluation that leads to an opinion of value. The real estate appraiser will typically use a few "approaches," typically three, to come to the estimation of market value. One of the methods is the Cost Approach - which is what it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. The most common approach in finding the value of a house is the Sales Comparison Approach which concerns making a comparison to similar homes close by. Being the most commonly used approach, the Sales Comparison Approach tends to be the most accurate and best indicator of market value for a house. 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 income generated by the property.
What does an appraiser do?(List of questions) An appraiser produces an unprejudiced and well supported assessment of market value, often in the context of a real estate purchase. Appraisers exhibit their professional analysis in appraisal reports.
What would cause me to need your services?(List of questions) There are many reasons to order an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for ordering an appraisal include:
What is the difference between an appraisal and a home inspection? (List of questions)Appraisers do not do perform residential property inspections and are not home inspectors. The purpose of a home inspection is to investigate the structure of the home from basement to attic. The general home inspector's report will contain an evaluation of the integrity of the property's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.
My agent performed a CMA for me. Is that the same as an appraisal?(List of questions) Frankly, it's apples and oranges. The CMA relies on vague trends in the market. Appraisals use comparable sales which are valid resources. The appraisal report will also include area 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.
But the largest differentiator is who's behind the report. A CMA is written by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. A certified, state licensed professional who bases their livelihood on valuing properties in and around Oklahoma County creates the appraisal. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat sum for assignments, regardless of their outcome.
What does the appraisal report contain? (List of questions)The main purpose of an appraisal report is to provide a value opinion, and depending on the scope of the report, one will customarily see the following:
Upon completion of the report, what assurance is there that the value indicated is valid?(List of questions) In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
Who hires Gentry Appraisal Service,Inc.(List of questions) Mortgage lenders are an appraiser's typical client, requesting their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.
Where does Gentry Appraisal Service,Inc. get the data used to estimate values in Oklahoma County or other areas?(List of questions) One of the most important activities of an appraiser is to gather data. Data can be split into Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.
General data is collected from a numerous sources. To find out about recent sales to be used as "comps", we typically go to the local Multiple Listing Service. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood servers.
And most importantly, the appraiser assimilates general data from his or her past experience in doing assignments for other properties in the same market.
Why should I hire a licensed appraiser?(List of questions) An appraisal is a worthwhile whenever the value of your home is pertinent to a financial decision. When selling your home, an appraisal will help you determine a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from Gentry Appraisal Service,Inc. is the best documentation to ensure assets are divided fairly. A house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.
What exactly is PMI and how can I get rid of it?(List of questions) PMI is short for for Private Mortgage Insurance. It covers the lender if a borrower is unable to pay on the loan and the value of the property is lower than what is owed on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.
How do I get ready for the appraiser?(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 condition of its amenities. The best thing you can do to help is make sure we have easy access to the exterior of the house . Trim any bushes and move any items that would make it difficult to measure the structure. On the inside, make sure the appraiser can get to appliances like furnaces and water heaters.
To help expedite our work plus ensure a more accurate report, attempt if possible to have the following items:
What is "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. 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 included 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 scenarios, 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 use the appraisal for any purpose.
How can I get the most ROI out of home improvements?(List of questions) This really depends on where the home is. 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. 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, yielding 85%. Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.