NY METRO APPRAISAL SERVICES, by Richard Greco Appraisals, Inc has answers to "Frequently Asked Questions"
What is an appraisal? What is an appraisal? (See list of FAQ's)An appraisal report is an investigation leading to an opinion of value. This opinion or estimate is arrived at by using a formal method that usually utilizes the three main "common approaches to value". One of them is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, then adding the land value. The Sales Comparison Approach involves searching for comparable homes nearby and finding value based on making a comparison of those homes to the property in question. Being the most popular approach, the Sales Comparison Approach tends to be the most precise and best indicator of market value for a house. The third approach is the Income Approach, which is the best method in appraising income producing properties - it deals with estimating what an investor would pay based on the capital generated by the property.Describe what an appraiser does (See list of FAQ's)An appraiser produces an objective and well substantiated assessment of market value, to be used in making real estate transactions. Appraisers illustate their conclusions in appraisal reports.What are the reasons someone would need a real estate appraisal? (See list of FAQ's)There are many reasons to get an appraisal from NY METRO APPRAISAL SERVICES, Inc. with the most common reason being real estate and mortgage transactions. Other reasons for ordering an appraisal report include:
Is an appraisal the same as a home inspection? (See list of FAQ's)Home inspectors do not generate an opinion of value and do not use the same forms as appraisers. A third-party home inspector will evaluate the structure of the property, from the top to the bottom. The archetypal home inspector's report will contain an evaluation of the condition 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.My agent performed a CMA for me. Is that the same as an appraisal? (See list of FAQ's)Simply put, it's like comparing broadband and dial-up. What the CMA depends on are vague trends. Appraisals use similar sales which are valid resources. Area and construction values 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 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. 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 work they perform, regardless of their outcome. What are the contents of an appraisal report? (See list of FAQ's)The main purpose of an appraisal document is to give a value opinion, and depending on the scope of the report, one will customarily see the following:
Once the appraisal has been delivered, how can I have certainty that the value conclusion is accurate? (See list of FAQ's)In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
Who employs appraisers? (See list of FAQ's)Commonly, appraisers are called upon by lenders to estimate the value of real estate involved in a loan transaction - to make sure the subject is indeed adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.Where does NY METRO APPRAISAL SERVICES, Inc. get the data used to estimate values in Bronx County or other areas? (See list of FAQ's)Collecting data is one of the primary functions of an appraiser. Data can be split into Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.General data is collected from a variety of places. Local Multiple Listing Services (MLS) provide data on recently sold homes that might be used as comparables. Tax records and other public documents verify actual sales prices in a market. Appraisers routinely need to report when a property is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product. And most importantly, the appraiser assimilates general data from his or her past experience in doing assignments for other houses in the same market. Why do I need a professional appraisal? (See list of FAQ's)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 house, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. When buying, you can avoid overpaying by commissioning an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.What exactly is PMI and how can I get rid of it? (See list of FAQ's)PMI is the common abbreviation for for Private Mortgage Insurance. It covers the lender in case a borrower doesn't pay on the loan and the market price of the property 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.
Does the appraiser need anything from me in advance? (See list of FAQ's)We start with an inspection of the home. During this process, we 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 bushes and relocate any items that would make it difficult to measure the structure. On the inside, make sure we can get to appliances like furnaces and water heaters.You can make the inspection go faster and improve the quality of the appraisal report by having the following things on hand:
What is "Market Value?" (See list of FAQ's)In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Who actually owns the appraisal report? (See list of FAQ's)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 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 cases, the appraiser may state the purpose of the appraisal; 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. How can I get the most ROI out of home improvements? (See list of FAQ's)Like all things real estate, this is dependent on a home's location. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homesAs a rule, the best ROI 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 were second, returning 85%. Adding bedrooms and baths can also help 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. |
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