ALL ISLAND VALUATION SERVICES, LLC has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(Top) An appraiser performs an estimation that produces an opinion of value. This opinion or estimate is found by a formal method that typically uses three "common approaches to value". One of the processes in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the home, minus depreciation and physical deterioration, adding the land value. Another of the processes is the Sales Comparison Approach - which involves making a comparable analysis to other similar properties within a close proximity which have recently sold. The Sales Comparison Approach is commonly the most definitive and clearest indicator of a liklely sales price for a home. The third approach is the Income Approach, which is the best method in appraising income producing properties - it involves estimating what an investor would pay based on the income produced by the property.
Describe what an appraiser does(Top) An appraiser offers an unbiased and well substantiated determination of market value, in the support of real estate exchanges. Appraisers reveal the details of their professional investigation in appraisal reports.
Why would someone require a real estate appraisal?(Top) There are many reasons to get an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal include:
How is an appraiser different than a home inspector? (Top)The appraiser is not a home inspector nor does he/she do a complete home inspection. An inspection is a third-party evaluation of the available structure and systems of a house, from the roof to the bottom. The stereotypical property inspector's report will contain an evaluation of the integrity of the property's heating system, 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.
Is an appraisal the same as a comparative market analysis(CMA)?(Top) Frankly, it's like comparing Shakespeare to reality TV. What the CMA depends on are vague trends. Appraisals use comparable sales which are verifiable resources. Area and construction prices are also important in an appraisal. 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 the person behind the report. A CMA is created by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Moreover, the appraiser is an unbiased voice, with no vested interest in the property's value, unlike the real estate agent, who gets a commission based upon the price of the home.
What's in an appraisal report? (Top)The main purpose of an appraisal report is to let the reader know the value of the real estate in question, and depending on the scope of the report, you'll usually see the following:
Upon completion of the appraisal, how can I have assurance that the final number is accurate?(Top) In the documentation of an appraisal, each appraiser must ensure the following:
Who employs appraisers?(Top) Most of the time, appraisers are called upon by mortgage lenders to render a value opinion on property involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.
Where does an appraiser get the data used to estimate values in Suffolk County or other areas?(Top) Gathering information is one of the primary functions of an appraiser. Data can be split into Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.
General data is received from a number of places. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is available 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 creating appraisals for other properties in the same market.
Why do I need a professional appraisal?(Top) If you're making some sort of financial decision and the value of your home matters, you'll want an appraisal. For those selling a home, you'll want to figure out the 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 ALL ISLAND VALUATION SERVICES, LLC is the best documentation to ensure assets are split up fairly. Simply put, 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?(Top) PMI is an acronym for Private Mortgage Insurance. This added plan covers the lender in the event a borrower is unable to pay on the loan and the market price of the property is lower than the balance of the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.
Do you need anything from me in advance?(Top) We begin with an inspection of the home. 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 features. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house . Trim any landscaping and move any items that would make it difficult to measure the structure. On the inside, make sure the appraiser can easily access items like furnaces and water heaters.
The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
How does an appraiser define "Market Value"?(Top) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Who actually owns the appraisal report?(Top) 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 bundled 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 stipulate 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.
Which home renovations add the most to the price?(Top) The answer to this is different depending upon the location of the home. 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. 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 are right up there with kitchens, returning 85%. Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.