Hancock Appraisal Services, Inc. has answers to "Frequently Asked Questions"
Define the term "Appraisal"
Define the term "Appraisal"(Go to list of questions) An appraisal is an estimation allowing the appraiser to come to an opinion of value. There are three "common approaches to value" which assists the appraiser conclude this opinion or estimate. The Cost Approach is one of the approaches that appraisers use to find the value of a property; it involves concluding what the improvements would cost less physical depreciation, adding the land value. The Sales Comparison Approach deals with searching for similar houses in close proximity and figuring out the value based on making a comparison of those prior sales to the home being appraised. Being the most popular approach, the Sales Comparison Approach tends to be the most precise and best indicator of market value for a home. One of the least common approaches in appraising houses is the Income Approach, which is generally used to determine the value of a property based on what an investor would pay based on the income produced by the property.
Describe what an appraiser does(Go to list of questions) An appraiser offers a fair and credible assessment of market value, in the support of real property exchanges. Appraisers demonstrate their expert analysis in appraisal reports.
Why would a person need services from Hancock Appraisal Services, Inc.?(Go to list of questions) There are a lot of reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for purchasing an appraisal include:
How is an appraisal different than a home inspection? (Go to list of questions)Appraisers do not do perform residential property inspections and are not home inspectors. A third-party home inspector will judge the structure of the house, from the roof to the foundation. The archetypal property inspector's report will contain an evaluation of the integrity of the home's heating systems, 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)?(Go to list of questions) Simply, they have nothing in common. The CMA relies on indefinite local market trends. An appraisal is based on comparable sales that can be proven by public record. Area and architectural prices are also precedent in an appraisal. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.
But the biggest difference is who's creating the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. A certified, Georgia licensed professional who bases their livelihood on valuing properties in and around Camden County is behind the appraisal. Moreover, the appraiser is an independent party, with no vested interest in the value of a home, unlike the agent, whose income is tied to the value of the home.
What does the appraisal report contain? (Go to list of questions)The main point of an appraisal document is to provide a value opinion, and depending on the scope of the report, you'll usually see the following:
Once the appraisal has been delivered, how can I have assurance that the final number is accurate?(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 hires Hancock Appraisal Services, Inc.(Go to list of questions) Mortgage lenders are an appraiser's typical client, needing their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.
Where does Hancock Appraisal Services, Inc. get the data used to estimate values in Camden County or other areas?(Go to list of questions) Collecting data is one of the primary tasks an appraiser engages in. Data can be described as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.
General data is received from a number of sources. To find out about recently sold homes to be used as "comps", an appraiser will often go to the local Multiple Listing Service. To verify actual sales prices, we use tax records and other public documents that are usually online nowadays. 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 most importantly, the appraiser gathers 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?(Go to list of questions) An appraisal is a valuable tool whenever your home's value is pertinent to a financial decision. For those selling a home, you'll want to determine a price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; 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 Hancock Appraisal Services, Inc. is the best documentation to ensure assets are split up evenly. A house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making informed financial decisions.
What exactly is PMI and how can I get rid of it?(Go to list of questions) PMI is the common abbreviation for for Private Mortgage Insurance. This supplementary policy protects the lender if a borrower defaults on the loan and the market price of the home is lower than what the borrower still owes 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.
Do you need anything from me in advance?(Go to list of questions) We start with an inspection of the property. During this process, we 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 we have easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and relocate any items that would get in our way while we measure the structure. On the inside, make sure we can easily access items like furnaces and water heaters.
You can make our visit go faster and improve the accuracy of the appraisal report by having the following things on hand:
What does "Market Value" mean?(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. 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 hires an appraiser directly. In these scenarios, the appraiser may state 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.
How can I get the most ROI out of home improvements?(Go to list of questions) The answer to this is different depending upon the location of the home. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.
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%. On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.