The Blaine Group has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(Go to list of questions) The appraisal process is an estimation that generates an opinion of value. This opinion or estimate is figured through a formal method that typically utilizes three "common approaches to value". One of the processes in use is the Cost Approach, which is what it would cost to restore the improvements to the home, less the age and physical dilapidation, adding the land value. Another of the methods is the Sales Comparison Approach - which concerns making a comparable analysis to other similar properties within a close vicinity which have recently sold. The Sales Comparison Approach is normally the most definitive and clearest indicator of a liklely sales price for a residential property. One of the least common approaches in appraising residential properties is the Income Approach, which is generally used to find the value of a property based on what an investor would pay based on the income produced by the building.
Describe what an appraiser does(Go to list of questions) An appraiser produces an objective and well supported determination of market value, to be used in making real estate transactions. Appraisers show their investigation in appraisal reports.
Why would a person need your services?(Go to list of questions) There are many reasons to get an appraisal with the most common reason being real estate and mortgage transactions. Some other reasons for purchasing an report include:
Is an appraisal the same as a home inspection? (Go to list of questions)The appraiser is not a home inspector and does not do a comprehensive home inspection. The point of a home inspection is to evaluate the structure of the home from foundation to attic. The standard home inspector's report will include an evaluation of the condition of the house's heating system, 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.
Is an appraisal the same as a comparative market analysis(CMA)?(Go to list of questions) Frankly, it's like comparing sugar and saccharin. The CMA utilizes market trends to conduct most of their business. An appraisal utilizes comparable sales that can be proven by public record. Location and construction prices are also a priority in an appraisal. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.
But the biggest difference is the person behind the report. Real estate agents produce 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 properties in and around Ellis County is behind the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a flat fee for assignments, regardless of their outcome.
What's in an appraisal report? (Go to list of questions)The main point of an appraisal document is to give a value opinion, and depending on the scope of the report, you'll usually see the following:
Upon completion of the report, how can I have assurance that the value conclusion is veritable?(Go to list of questions) In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
Who engages the services of appraisers?(Go to list of questions) Mortgage lenders are an appraiser's most likely client, using their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.
Where does The Blaine Group get the information used to estimate values in Ellis County or other areas?(Go to list of questions) Compiling information is one of the primary occupations of an appraiser. Data can be described as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.
General data is received from a many places. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. To double-check actual sales prices, we use tax records and other public documents that are usually online nowadays. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood system.
And most importantly, the appraiser gathers general data from his or her collective knowledge gained from doing assignments for other houses in the same market.
Why should I hire a licensed appraiser?(Go to list of questions) An appraisal is a valuable tool whenever your home's value is pertinent to some financial decision. For those selling a home, you'll want to figure out a price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from The Blaine Group is the best documentation to ensure assets are split up evenly. A house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.
My mortgage statement has an item on it for PMI? Can I get rid of that?(Go to list of questions) PMI is the common abbreviation for for Private Mortgage Insurance. It covers the lender in case a borrower defaults on the loan and the value of the house is lower than what is owed on the loan. 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.
How do I get ready for the appraiser?(Go to list of questions) We begin with an inspection of the property. 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 the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any shrubs and relocate any items that would make it difficult to measure the structure. On the inside, make sure we can get to items like furnaces and water heaters.
You can make our visit go faster and improve the quality of the appraisal report by having the following things on hand:
What is "Market Value?"(Go to list of questions) In real estate appraising, Market Value is commonly defined as:
Does the appraisal belong to the bank or the consumer?(Go to list of questions) In most real estate transactions, the appraisal is ordered by the lender. 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 appraisal - 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.
The exception to this rule is when a home owner engages an appraiser directly. In these situations, the appraiser may state how the appraisal can be used; 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.
I want to get more for my house. Where should I spend money renovating?(Go to list of questions) The added value of a particular amenity truly depends on the local market. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want
No matter where you go, however, renovating a kitchen is almost always a safe move. 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 weren't far behind, yielding 85%. Adding bedrooms and baths can also help 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.