North Fork Appraisal Services (970) 379-8212 has answers to "Frequently Asked Questions"
What is an appraisal?
What is an appraisal?(Back to top) The method of creating an appraisal consists of an evaluation which leads to an opinion of value. This opinion or estimate is found through a formal method that usually utilizes three "common approaches to value". One of the processes in use is the Cost Approach, which evaluates what it would cost to replace the improvements to the house, minus depreciation and physical dilapidation, plus the land value. Another of the methods is the Sales Comparison Approach - which involves making a comparison to other similar nearby properties 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 property. The Income Approach is generally 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.
What does an appraiser do?(Back to top) An appraiser forumlates a professional, unbiased assessment of market value, to be used in making real estate transactions. Appraisers present their findings in appraisal reports.
Why would a person request services from North Fork Appraisal Services (970) 379-8212?(Back to top) There are many reasons to order an appraisal from North Fork Appraisal Services (970) 379-8212 with the usual reason being real estate and mortgage transactions. A few other reasons for purchasing an appraisal include:
How is an appraiser different than a home inspector? (Back to top)Home inspectors do not generate an opinion of value and do not do appraisal reports. The point of a home inspection is to investigate the structure of the home from bottom to rooftop. The usual house inspector's report will include an evaluation of the integrity of the house's heating systems, 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.
Is an appraisal the same as a comparative market analysis(CMA)?(Back to top) Frankly, it's like comparing broadband and dial-up. The CMA depends on indistinct trends in the market. Appraisals use similar sales which are verifiable resources. The appraisal report will also contain location and building values. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.
The credentials of 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 true grasp of valuation methods or the entire market, generate CMA's. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to accept a flat sum for work they perform, regardless of their outcome.
What does the appraisal report contain? (Back to top)The main objective of an appraisal report is to give a value opinion, and depending on the scope of the report, you'll usually see the following:
Upon completion of the appraisal, how can I have certainty that the value indicated is valid?(Back to top) In the documentation of an appraisal, each appraiser must make sure of the following:
Who are an appraiser's customers?(Back to top) Mortgage lenders are an appraiser's most likely customer, 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 in litigation cases, tax matters and investment decisions.
Where does North Fork Appraisal Services (970) 379-8212 get the data used to estimate values in Garfield County or other areas?(Back to top) Compiling data is one of the primary tasks an appraiser performs. Data can be categorized as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.
General data is gathered from a many places. To find out about recently sold homes to be used as "comps", an appraiser will often use the local Multiple Listing Service. Tax records and other public documents verify actual sales prices in a market. Appraisers often need 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 last but not least, the appraiser gathers general data from his or her past experience in doing assignments for other properties in the same market.
How can a licensed appraiser help me?(Back to top) If you're making some sort of financial decision and the value of your home matters, you'll want to hire a licensed appraiser. For those selling a home, you'll want to determine 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 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. 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?(Back to top) PMI is the common abbreviation for for Private Mortgage Insurance. It guards the lender if a borrower defaults on the loan and the market price of the home is less than the balance of 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.
How do I get ready for the appraiser?(Back to 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. The best thing you can do to help is make sure we have easy access to the exterior of the house . Trim any shrubs and move any items that would get in our way while we measure the structure. On the inside, make sure we can easily access appliances like furnaces and water heaters.
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?(Back to top) In real estate appraising, Market Value is commonly defined as:
Once complete, who actually owns the appraisal report?(Back to top) For mortgage transactions, the lender orders the appraisal, either directly or through a third party. Even though it's the buyer that eventually pays for the report, the lender is the intended user. 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 state how the appraisal can be used; 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.
How can I get the most ROI out of home improvements?(Back to top) 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 homes
No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 weren't far behind, yielding 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.