Sherman Appraisal Services. Inc has answers to "Frequently Asked Questions"
What is an appraisal?
What is an appraisal?(Top) The appraisal process is an evaluation that produces an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or estimate. One of the methods in use is the Cost Approach, which is what it would cost to restore the improvements to the property, less the depreciation and physical dilapidation, plus the land value. Another of the processes is the Sales Comparison Approach - which deals with discovering a comparable analysis to other similar nearby properties which have recently sold. The Sales Comparison Approach is commonly the most accurate and best indicator of a liklely sales price for a home. 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 money generated by the property.
Describe what an appraiser does(Top) An appraiser produces an impartial and well supported assessment of market value, in the support of real estate transactions. Appraisers reveal the details of their findings in appraisal reports.
What would cause me to request services from Sherman Appraisal Services. Inc?(Top) There are a lot of reasons to order an appraisal from Sherman Appraisal Services. Inc with the most common reason being real estate and mortgage transactions. A few other reasons for getting an appraisal include:
Is an appraisal the same as a comparative market analysis(CMA)?(Top) To be honest, they have nothing in common. The CMA utilizes market trends to create most of their business. An appraisal utilizes comparable sales that can be validated by records. Also, the appraisal verifies other factors like condition, location and replacement prices. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.
But the largest differentiator is the person creating the report. Real estate agents produce CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, state licensed professional who has formed a career on valuing properties in and around Lake County is behind the appraisal. Further, the appraiser is an unbiased voice, with no vested interest in the property's value, unlike the agent, who gets a commission based upon the value of the home.
Upon completion of the appraisal, what guarantee is there that the value indicated is veritable?(Top) In the documentation of an appraisal, each appraiser must make sure of the following:
Who hires Sherman Appraisal Services. Inc(Top) Mortgage lenders are an appraiser's typical client, requesting 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 data used to estimate values in Lake County or other areas?(Top) One of the primary activities of an appraiser is to collect data. Data can be classified as either Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.
General data is collected from a number of places. Local Multiple Listing Services (MLS) have information on recently sold homes that could be used as comparables. Tax records and other public documents verify actual sales prices in a market. Appraisers routinely have to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.
And most importantly, the appraiser gathers 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?(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 a 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 people settling an estate or divorce, an appraisal from Sherman Appraisal Services. Inc is the best way to ensure assets are divided fairly. A home 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?(Top) PMI is short for for Private Mortgage Insurance. This supplementary policy protects the lender in the event a borrower is unable to pay on the loan and the market price of the house is lower 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.
Do you need anything from the homeowner in advance?(Top) We begin with an inspection of the property. 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. On the home's interior, make sure it is clutter free and that we can get to things like furnaces and water heaters. In the yard, 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?(Top) In real estate appraising, Market Value is commonly defined as:
Who has rights to the appraisal report?(Top) 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 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.
This rule doesn't apply when a home owner engages an appraiser directly. In these scenarios, the appraiser may define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated 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, 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
As a rule, the best ROI 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, returning 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size.