SAVERY APPRAISAL SERVICES has answers to "Frequently Asked Questions"
SAVERY APPRAISAL SERVICES is always eager to handle any concerns you might have about appraisals or real estate in Tulare County.
Contact SAVERY APPRAISAL SERVICES today to see how we can help solve your valuation problems.
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An appraisal report is an estimation allowing the appraiser to come to an opinion of value.
There are three "common approaches to value" which helps the real estate appraiser conclude this opinion or estimate.
The Cost Approach is one of the processes that real estate appraisers use to find the value of a property; it involves finding what the improvements would cost without physical degradation, plus the land value.
The Sales Comparison Approach deals with finding similar houses in close proximity and discovering the value based on comparing those houses to the home in question.
Being the most popular approach, the Sales Comparison Approach is considered the most precise and best indicator of market value for a property.
The Income Approach is primarily used for determining the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.
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An appraiser provides a fair and credible determination of market value, in the support of real property exchanges.
Appraisers present their investigation in appraisal reports.
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There are a lot of reasons to purchase an appraisal with the most common reason being real estate and mortgage transactions.
Other reasons for obtaining an report include:
If you are applying for a loan.
If you would like to lower your property tax obligations.
To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
To fight improperly assessed property taxes.
If you need to settle an estate.
To provide you a leg-up when purchasing a home.
To find an honest property value when putting your home on the market.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS need an appraisal on every house.
It's possible you could have to deal with being in a lawsuit - an appraisal will help.
Click here for a more detailed explanation of the process dealing with getting an appraisal.
The appraiser is not a home inspector nor does he/she do a complete home inspection.
A third-party home inspector will inspect the structure of the property, from the top to the foundation.
Generally, a home inspection report will discuss the amenities and the requirements of the property: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.
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Frankly, it's like comparing Shakespeare to reality TV.
The CMA uses market trends to create most of their business.
The appraisal is reliant on specific definite comparable sales.
In addition, the appraisal looks at other factors like condition, area and construction costs.
All a CMA does is generate a "ball park figure."
An appraisal delivers a defensible and carefully documented opinion of value.
The credentials of the person creating the report is hands down the biggest difference between a CMA and an appraisal.
Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation.
The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties.
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 accept a previously agreed upon fee for assignments, regardless of their value conclusion.
Each appraisal must demonstrate a believable estimate of value and should document the following:
Who engaged the appraiser and other intended users.
The intended use of the report.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
Relevant property characteristics, including: location, physical characteristics, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible considerations.
All known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
Division of interest, such as fractional interest, physical segment and partial holding.
What was included in the process of completing the appraisal.
For a more comprehensive view of all that goes into an appraisal report click here: Sample Appraisal Report
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In communicating an appraisal report, each appraiser must make sure of the following:
That the information analysis contained in the appraisal was suitable.
That grave errors of omission or commission were not committed individually or collectively.
That appraisal services were not rendered in a careless or negligent manner.
That a credible, defensible appraisal report was conferred.
To become a state licensed appraiser, there are extensive education requirements as well as experience that must be logged - all with the end goal of being able to provide unbiased value opinions.
In addition, appraisers must abide by a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for working up an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).
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Typically, appraisers are called upon by lenders to render a value opinion on real estate involved in a loan transaction - to make sure the house is indeed adequate collateral for the loan.
Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.
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Collecting data is one of the primary activities of an appraiser.
Data can be classified as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specific data are documented by the appraiser while on site.
General data is received from a variety of places.
Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables.
To double-check actual sales prices, we look at items in the assessor's office and other public documents that are usually online nowadays.
Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood servers.
And most importantly, the appraiser gathers general data from his or her collective knowledge gained from doing assignments for other properties in the same market.
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Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps.
If you're selling your home, an appraisal assists you in setting the most appropriate price.
If you're buying, it makes sure you don't overpay.
If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly.
Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value means you can make informed financial decisions.
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PMI stands for Private Mortgage Insurance.
This additional plan guards the lender in case a borrower is unable to pay on the loan and the value of the house is less 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.
Is PMI something increasing your monthly mortgage payment?Call SAVERY APPRAISAL SERVICES today at (559) 562-0963 or send us an e-mail. A current appraisal could save you thousands.
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The first step in most appraisals is the property 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 status of its amenities.
On the home's interior, make sure it is clutter free and that we can find our way to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of outside walls.
The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
A plot plan or survey of the house and land (if available).
List of personal property to be sold with the home.
Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
A list of any major home improvements and enhancements, the date of their installation and their cost (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
Locate copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
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In real estate appraising, Market Value is commonly defined as:
"The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and 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: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and 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."
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For mortgage transactions, the lender requests 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 appraisal - it's usually bundled 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 cases, the appraiser may stipulate 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.
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This really depends on where the home is.
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 investment.
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, returning 85%.
Adding bedrooms and baths can also increase 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.
SAVERY APPRAISAL SERVICES 1485 Jeanette Street Lindsay, CA 93247
