Brazos Valley Appraisals has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(Go to list of questions) An appraisal is an investigation allowing the appraiser to come to an opinion of value. The real estate appraiser will typically use a several "approaches," typically three, to come to the estimation of market value. One of the processes is the Cost Approach - which is what it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. Another of the approaches is the Sales Comparison Approach - which deals with discovering a comparison to other similar properties within a close proximity which have recently sold. Being the most common approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a residence. One of the least common approaches in appraising houses is the Income Approach, which is mainly used to find the market value of a property based on what an investor would pay based on the capital produced by the property.
Describe what an appraiser does(Go to list of questions) An appraiser generates a fair and credible assessment of market value, to be used in making real estate transactions. Appraisers document their findings in appraisal reports.
What would cause me to require your services?(Go to list of questions) There are many reasons to purchase an appraisal from Brazos Valley Appraisals with the most common reason being real estate and mortgage transactions. A few other reasons for getting an appraisal report include:
How is an appraiser different than a home inspector? (Go to list of questions)Home inspectors do not come to an opinion of value and are not appraisers. A third-party home inspector will evaluate the structure of the property, from the roof to the foundation. The archetypal house inspector's report will include 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 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) Frankly, it's like comparing Shakespeare to reality TV. What the CMA relies upon are superficial trends. An appraisal is based on comparable sales that can be proven by public record. The appraisal report will also include area and construction costs. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
The credentials of the person creating the report is actually the biggest difference between a CMA and an appraisal. Real estate agents produce CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, state licensed professional who bases a career on valuing properties in and around Brazos County creates the appraisal. Likewise, the agent has a vested interest in 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's in an appraisal report? (Go to list of questions)Each appraisal must demonstrate a believable value opinion and will clearly state the following:
Once the assignment has been delivered, how can I have assurance that the value conclusion is valid?(Go to list of questions) In communicating an appraisal report, each appraiser must make sure of the following:
Who hires Brazos Valley Appraisals(Go to list of questions) Typically, appraisers are hired by lenders to render a value opinion on property involved in a loan transaction. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.
Where does Brazos Valley Appraisals get the data used to estimate values in Brazos County or other areas?(Go to list of questions) Gathering information is one of the primary functions of an appraiser. Data can be categorized as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.
General data is collected from a number of sources. To research recent sales to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. To double-check actual sales prices, we research items in the assessor's office and other public documents. Appraisers often have to report when a property is in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.
And last but not least, the appraiser gathers general data from his or her past experience in creating appraisals for other houses in the same market.
How can a licensed appraiser help me?(Go to list of questions) 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 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 commissioning an independent appraisal. For people settling an estate or divorce, an appraisal from Brazos Valley Appraisals is the best documentation to ensure assets are divided properly. Simply put, a house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.
My mortgage statement has an item on it for PMI? Can I get rid of that?(Go to list of questions) PMI is short for for Private Mortgage Insurance. This supplemental plan takes care of the lender in case a borrower defaults on the loan and the value of the home is lower than the balance of 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.
How do I get ready for the appraiser?(Go to list of questions) 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. On the home's interior, 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 expedite our work plus ensure a more accurate report, try if possible to have the following items:
What does "Market Value" mean?(Go to list of questions) In real estate appraising, Market Value is commonly defined as:
Does the appraisal belong to the bank or the consumer?(Go to list of questions) For mortgage transactions, the lender requests 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 entitled to a copy of the appraisal - it's usually included with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.
This rule doesn't apply when a home owner engages an appraiser directly. In these scenarios, the appraiser may stipulate the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.
Are some home improvements more worthwhile than others?(Go to list of questions) A home's location - what city it is in and even what part of that city - is key to this popular question. 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. 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 weren't far behind, yielding 85%. Adding bedrooms and baths can also help the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.