Capital Appraisal Service of Thibodaux has answers to "Frequently Asked Questions"
Define the term "Appraisal"
Define the term "Appraisal"(Top) The appraisal process is an evaluation that generates an opinion of value. There are three "common approaches to value" which helps the appraiser come to this opinion or estimate. One of the processes in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the home, less the depreciation and physical dilapidation, adding the land value. The most common approach in finding the likely sales price of a house is the Sales Comparison Approach which involves concluding a comparison to similar homes nearby. The Sales Comparison Approach is commonly the most accurate and clearest indicator of a liklely sales price for a home. One of the least common approaches in appraising residential properties is the Income Approach, which is commonly used to determine the market value of a property based on what an investor would pay based on the income produced by the building.
What does an appraiser do?(Top) An appraiser produces a fair and credible determination of market value, in the support of real estate transactions. Appraisers show their expert conclusions in appraisal reports.
Why would I request services from Capital Appraisal Service of Thibodaux?(Top) There are many reasons to obtain an appraisal from Capital Appraisal Service of Thibodaux with the most common reason being real estate and mortgage transactions. A few other reasons for ordering an report include:
What is the difference between an appraisal and a comparative market analysis (CMA)?(Top) Frankly, it's night and day. What the CMA depends on are vague trends. An appraisal relies on comparable sales that can be validated by public record. Also, the appraisal checks other factors like condition, area and replacement costs. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
But the most significant factor is who's creating 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 a career on valuing real estate in and around Lafourche County creates the appraisal. Moreover, the appraiser is an independent voice, with no vested interest in the value conclusion, unlike the real estate agent, whose income is tied to the value of the home.
Once the assignment is done, what assurance is there that the value conclusion is legitimate?(Top) In the documentation of an appraisal, each appraiser must make sure of the following:
Who are an appraiser's customers?(Top) Commonly, appraisers are hired by lenders to estimate the value of real estate involved in a loan transaction - to make sure the property is truly adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.
Where does an appraiser get the information used to estimate values in Lafourche County or other areas?(Top) Collecting data is one of the primary roles of an appraiser. Data can be divided into Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.
General data is gathered from a number of sources. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. Tax records and other public documents verify actual sales prices in a market. Appraisers often have to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.
And last but not least, the appraiser assembles general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.
Why should I hire a licensed appraiser?(Top) Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. 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 parties settling an estate or divorce, an appraisal from Capital Appraisal Service of Thibodaux is the best way to ensure assets are divided properly. A home is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.
What exactly is PMI and how can I get rid of it?(Top) PMI stands for Private Mortgage Insurance. This supplemental policy takes care of the lender in the event a borrower defaults on the loan and the market price of the property is lower than the loan balance. 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.
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. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any shrubs and move any items that would get in our way while we measure the structure. Indoors, make sure we can easily access appliances like furnaces and water heaters.
You can make the inspection go faster and improve the accuracy of the appraisal report by having the following things on hand:
How does an appraiser define "Market Value"?(Top) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Once complete, who actually owns the appraisal report?(Top) For mortgage transactions, the lender orders the appraisal, either directly or through a third party. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is entitled to a copy of the report - 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 cases, the appraiser may state the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can use the appraisal for any purpose.
Are some home improvements more worthwhile than others?(Top) It really depends on the market. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.
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, work that may not increase your value would be painting just for the sake of redecorating.