Gary R Hall Appraisal LLC has answers to "Frequently Asked Questions"
What is an appraisal?
What is an appraisal?(Go to list of questions) An appraiser provides an estimation that leads to an opinion of value. There are three "common approaches to value" which assists the appraiser conclude this opinion or valuation. The Cost Approach is one of the processes that real estate appraisers use to find value; it involves concluding what the improvements would cost minus physical degradation, adding the land value. Another of the methods is the Sales Comparison Approach - which concerns finding a comparable analysis to other similar nearby properties which have recently sold. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a residential property. 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 capital generated by the property.
Describe what an appraiser does(Go to list of questions) An appraiser offers a professional, unbiased opinion of market value, in the support of real property exchanges. Appraisers reveal the details of their expert conclusions in appraisal reports.
What would cause me to require services from Gary R Hall Appraisal LLC?(Go to list of questions) There are a lot of 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? (Go to list of questions)Appraisers do not do provide residential property inspections and are not home inspectors. A third-party home inspector will inspect the structure of the house, from the roof to the bottom. The standard house inspector's report will contain an evaluation of the integrity of the home'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.
My agent performed a CMA for me. Is that the same as an appraisal?(Go to list of questions) Simply, they share nothing in common. The CMA depends on vague market trends. Appraisals use similar sales which are verifiable resources. The appraisal report will also contain location and building prices. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.
Who's behind the report is frankly the biggest difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Further, the appraiser is an independent voice, with no conditional interest in the value of a home, unlike the real estate agent, whose income is tied to the value of the home.
What's in an appraisal report? (Go to list of questions)The main objective of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:
Once the appraisal has been completed, how can I have assurance that the value conclusion is trustworthy?(Go to list of questions) In communicating an appraisal report, each appraiser must make sure of the following:
Who do appraisers work for?(Go to list of questions) Mortgage lenders are an appraiser's typical customer, requiring their services to ensure a home 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 an appraiser get the information used to estimate values in Dallas County or other areas?(Go to list of questions) One of the primary tasks an appraiser must accomplish is to collect data. Data can be described as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.
General data is gathered from a numerous sources. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers routinely need to report when a property lies in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.
And last but not least, the appraiser assembles general data from his or her past experience in doing assignments for other properties in the same market.
Why should I hire a licensed appraiser?(Go to list of questions) An appraisal is a valuable tool anytime the value of your home is pertinent to a financial decision. For those selling a home, you'll want to determine the price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. When buying, you can avoid overpaying by getting an independent appraisal. For parties settling an estate or divorce, an appraisal from Gary R Hall Appraisal LLC is the best documentation to ensure assets are divided properly. A home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making the right 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 supplementary policy covers the lender if a borrower doesn't pay on the loan and the value of the house is less than what is owed on the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.
Do you need anything from me in advance?(Go to list of questions) 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 amenities. Inside, pick up any clutter and make sure we can access things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of outside walls.
To help speed things along as well as ensure a more accurate report, attempt if possible to have the following items:
How does an appraiser define "Market Value"?(Go to list of questions) In real estate appraising, Market Value is commonly defined as:
Who has rights to the appraisal report?(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 bundled with all the other closing documents - but is not entitled 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 scenarios, the appraiser may define how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can use the appraisal for any purpose.
Are some home improvements more worthwhile than others?(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 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 are right up there with kitchens, returning 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.