Adamo & Associates has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(Top) An appraisal is an inspection allowing the appraiser to come to an opinion of value. There are three "common approaches to value" which assists the real estate appraiser come to this opinion or valuation. One of the methods in use is the Cost Approach, which evaluates what it would cost to replace the improvements to the property, minus depreciation and physical deterioration, adding 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. Being the most popular approach, the Sales Comparison Approach is considered the most precise and best indicator of market value for a house. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it involves estimating what an investor would pay based on the money produced by the property.
What does an appraiser do?(Top) An appraiser produces a fair and credible assessment of market value, often in the context of a real estate sale. Appraisers present their expert conclusions in appraisal reports.
What are the reasons I would require a real estate appraisal?(Top) There are a lot of reasons to order an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for purchasing an appraisal include:
Is an appraisal the same as a comparative market analysis(CMA)?(Top) Honestly, they have nothing in common. The CMA relies on vague market trends. An appraisal is based on comparable sales that can be verified by records. Area and architectural values are also precedent 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.
The person creating the report is actually the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Further, the appraiser is an unbiased voice, with no vested interest in the value conclusion, unlike the real estate agent, who gets a commission based upon the price of the home.
Once the assignment has been completed, what guarantee is there that the final number is trustworthy?(Top) In communicating an appraisal report, each appraiser must ensure the following:
Who are an appraiser's customers?(Top) Mortgage lenders are an appraiser's typical client, requiring their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.
Where does Adamo & Associates get the data used to estimate values in Anderson County or other areas?(Top) Compiling data is one of the main tasks an appraiser does. Data can be divided into Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.
General data is received from a numerous places. To find out about recent sales to be used as "comps", an appraiser will typically use the local Multiple Listing Service. To double-check actual sales prices, we use items in the assessor's office and other public documents that are usually online nowadays. Appraisers often need 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 product.
And most importantly, the appraiser assembles general data from his or her collective knowledge gained from doing assignments for other houses in the same market.
What can a full appraisal do for me?(Top) If you're making some sort of financial decision and the value of your home is relevant, you'll want a full appraisal. 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, be sure you're not overpaying by commissioning an independent appraisal. For parties settling an estate or divorce, an appraisal from Adamo & Associates is the best documentation to ensure assets are split up properly. A house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making wise financial decisions.
My mortgage statement has an item on it for PMI? Can I get rid of that?(Top) PMI stands for Private Mortgage Insurance. It protects the lender in case a borrower is unable to pay on the loan and the value of the property is less 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.
How do I get ready for the appraiser?(Top) The first step in most appraisals is the property inspection. 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 get to things like furnaces and water heaters. On the outside, 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:
How does an appraiser define "Market Value"?(Top) In real estate appraising, Market Value is commonly defined as:
Does the appraisal belong to the bank or the consumer?(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 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.
The exception to this rule is when a home owner hires an appraiser directly. In these cases, the appraiser may define the purpose of the appraisal; 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.
I want to get more for my house. Where should I spend money renovating?(Top) It really depends on the 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. 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 were second, returning 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.