Arizona Desert Appraisal has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(Top) The process of writing an appraisal consists of an estimation which forms an opinion of value. This opinion or estimate is arrived at through a formal method that usually utilizes three "common approaches to value". The Cost Approach is one of the methods that appraisers use to find the value of a home; it involves concluding what the improvements would cost less physical deterioration, plus the land value. Another of the approaches is the Sales Comparison Approach - which deals with making a comparison to other similar properties within a close vicinity which have recently sold. The Sales Comparison Approach is commonly the most accurate and best indicator of a liklely sales price for a residence. The Income Approach is mainly used for finding the market value of income-producing properties based on what an investor would pay based on the amount of income a property would bring in.
Describe what an appraiser does(Top) An appraiser produces an unbiased and well supported assessment of market value, in the support of real estate exchanges. Appraisers show their expert findings in appraisal reports.
What would cause me to request services from Arizona Desert Appraisal?(Top) There are many reasons to purchase an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal include:
My agent performed a CMA for me. Is that the same as an appraisal?(Top) To be honest, they have nothing in common. What the CMA depends on are vague trends. An appraisal relies on comparable sales that can be verified by public record. Also, the appraisal verifies other factors like condition, area and building costs. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
But the biggest difference is who's creating the report. 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 collect only a previously agreed upon fee for assignments, regardless of their outcome.
Upon completion of the report, what guarantee is there that the final number is accurate?(Top) In communicating an appraisal report, each appraiser must make sure of the following:
Who engages the services of appraisers?(Top) Typically, appraisers are employed by lenders to render a value opinion on a home involved in a loan transaction. Attorneys and CPAs also hire appraisers for divorce and estate settlements.
Where does Arizona Desert Appraisal get the data used to estimate values in Mohave County or other areas?(Top) One of the primary activities of an appraiser is to collect data. Data can be split into Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.
General data is gathered from a variety of sources. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. To double-check actual sales prices, we use tax records and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood service.
And most importantly, the appraiser assembles general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.
Why should I hire a licensed appraiser?(Top) Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. For those selling a home, you'll want to figure out 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. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Arizona Desert Appraisal is the best way to ensure assets are split up fairly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value means you can make wise financial decisions.
My mortgage statement has an item on it for PMI? Can I get rid of that?(Top) PMI is the common abbreviation for for Private Mortgage Insurance. This added policy takes care of the lender in case a borrower doesn't pay on the loan and the market price of the home 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.
How do I get ready for the appraiser?(Top) The first step in most appraisals is the property inspection. During this process, the appraiser 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. Is there anything you can do to help? Yes there is! First, be 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 make it difficult to 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 quality of the appraisal report by having the following things on hand:
What is "Market Value?"(Top) In real estate appraising, Market Value is commonly defined as:
Who actually owns the appraisal report?(Top) For mortgage transactions, the lender orders the appraisal, either directly or through a third party. 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 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.
It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these situations, the appraiser may state 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.
Are some home improvements more worthwhile than others?(Top) This really depends on where the home is. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!
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 an oddball for your neighborhood in terms of size.