Lang Appraisal Service, LLC has answers to "Frequently Asked Questions"
What is an appraisal?
What is an appraisal?(Go to list of questions) The method of creating an appraisal report deals with an investigation which leads to an opinion of value. This opinion or estimate is found using a formal method that typically utilizes the three main "common approaches to value". One of the three is the Cost Approach - which is how much capital would be required to replace the improvements, minus physical deterioration and other factors, then adding the land value. The Sales Comparison Approach involves searching for comparable properties in close proximity and figuring out the value based on comparing those homes to the home being appraised. Generally speaking, the Sales Comparison Approach is the most accurate indicator of market value of a residential property. One of the least common approaches in appraising houses is the Income Approach, which is generally used to find the market 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 forumlates a fair and credible opinion of market value, often in the context of a real estate exchange. Appraisers reveal the details of their professional findings in appraisal reports.
What would cause me to request a real estate appraisal?(Go to list of questions) There are many reasons to obtain an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for purchasing an appraisal report include:
How is an appraiser different than a home inspector? (Go to list of questions)Home inspectors do not produce an opinion of value and do not use the same forms as appraisers. A third-party home inspector will inspect the structure of the home, from the roof to the bottom. The usual house inspector's report will include an evaluation of the condition of the home's heating systems, 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.
My agent performed a CMA for me. Is that the same as an appraisal?(Go to list of questions) Simply put, it's night and day. What the CMA depends on are superficial trends. Appraisals use similar sales which are verifiable resources. The appraisal report will also include neighborhood and construction prices. All a CMA does is generate a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
The person creating the report is frankly the biggest difference between a CMA and an appraisal. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, Virginia licensed professional who bases their livelihood on valuing properties in and around Warren County creates the appraisal. Moreover, the appraiser is an independent party, with no vested interest in the value of a home, unlike the real estate agent, who gets a commission based upon the price of the home.
What does the appraisal report contain? (Go to list of questions)Each report must demonstrate a supported value opinion and must clearly state the following:
Upon completion of the appraisal, what guarantee is there that the final number is veritable?(Go to list of questions) In the documentation of an appraisal, each appraiser must make sure of the following:
Who hires Lang Appraisal Service, LLC(Go to list of questions) Mortgage lenders are an appraiser's typical client, needing their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also hire appraisers for divorce and estate settlements.
Where does an appraiser get the information used to estimate values in Warren County or other areas?(Go to list of questions) Compiling data 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 specifics are noted by the appraiser during an inspection.
General data is collected from a many places. 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. Flood zone data is retrieved from FEMA data outlets, 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 doing assignments for other properties in the same market.
What can a full appraisal do for me?(Go to list of questions) An appraisal is a valuable tool whenever the value of your home is relevant to some financial decision. For those selling a home, you'll want to determine 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. When buying, you can avoid overpaying by getting an independent appraisal. For people settling an estate or divorce, an appraisal from Lang Appraisal Service, LLC is the best documentation to ensure assets are divided evenly. Simply put, a home is often the single, largest financial asset anybody owns. Knowing its true value means you can make informed financial decisions.
What exactly is PMI and how can I get rid of it?(Go to list of questions) PMI is an acronym for Private Mortgage Insurance. This added plan covers the lender if a borrower is unable to pay on the loan and the value of the house is less 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 me in advance?(Go to list of questions) 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, pick up any clutter and make sure we can find our way to things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of exterior walls.
The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
What does "Market Value" mean?(Go to list of questions) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Who has rights to the appraisal report?(Go to list of questions) 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 allowed to use the report for any other purpose without permission from the lender.
It's different when it's the homeowner hiring 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 noted otherwise, the home owner can use the appraisal for any purpose.
I want to get more for my house. Where should I spend money renovating?(Go to list of questions) It really depends on the 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. 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 are right up there with kitchens, returning 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.