JC Reynolds Appraisals has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal (List of questions)The appraisal process is an evaluation that produces an opinion of value. The appraiser must use a few "approaches," typically three, to conclude the estimation of market value. One of the methods in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the property, less the age and physical deterioration, adding the land value. Another of the methods is the Sales Comparison Approach - which deals with making a comparison to other similar properties within a close vicinity which have recently sold. Usually, the Sales Comparison Approach is the most definite indicator of market value of 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 produced by the property.
What does an appraiser do? (List of questions)An appraiser offers a fair and credible assessment of market value, to be used in making real estate transactions. Appraisers present their professional investigation in appraisal reports.
What would cause me to need your services? (List of questions)There are many reasons to purchase an appraisal from JC Reynolds Appraisals with the most common reason being real estate and mortgage transactions. A few other reasons for purchasing an appraisal report include:
Is an appraisal the same as a home inspection? (List of questions)The appraiser is not a home inspector nor does he/she do a full home inspection. The point of a home inspection is to evaluate the structure of the house from foundation to top. The usual home inspector's report will contain an evaluation of the condition of the house'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.
Is an appraisal the same as a comparative market analysis(CMA)? (List of questions)Frankly, they have nothing in common. The CMA depends on vague local market trends. The appraisal is based on similar definite comparable sales. In addition, the appraisal looks at other factors like condition, area and building prices. All a CMA does is generate 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 write 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 Dallas County creates the appraisal. Moreover, the appraiser is an unbiased voice, with no conditional interest in the value conclusion, unlike the real estate agent, who gets a commission based upon the price of the home.
What does the appraisal report contain? (List of questions)Each appraisal should indicate a credible estimate of value and should identify the following:
Once the appraisal has been delivered, how can I have confidence that the value conclusion is accurate? (List of questions)In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
Who engages the services of appraisers? (List of questions)Most of the time, appraisers are called upon by lenders to render a value opinion on a home involved in a loan transaction - to make sure the subject is truly adequate collateral for the loan. Attorneys and CPAs also hire appraisers for divorce and estate settlements.
Where does JC Reynolds Appraisals get the data used to estimate values in Dallas County or other areas? (List of questions)Compiling data is one of the primary things an appraiser performs. Data can be classified as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser while on site.
General data is collected from a many places. To find out about recent sales to be used as "comps", an appraiser will often go to the local Multiple Listing Service. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers routinely need to report when a property lies 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 assembles general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.
What can a full appraisal do for me? (List of questions)An appraisal is a valuable tool whenever your home's value is pertinent to some financial decision. When selling your home, an appraisal will help you determine the most appropriate price. When buying, be sure you're not overpaying by getting an independent appraisal. For those settling an estate or divorce, an appraisal from JC Reynolds Appraisals is the best way to ensure assets are split up evenly. Simply put, a house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.
My mortgage statement has an item on it for PMI? Can I get rid of that? (List of questions)PMI stands for Private Mortgage Insurance. PMI protects the lender if a borrower is unable to pay on the loan and the market price of the house is less than what the borrower still owes 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.
Should I do anything in advance of the appraisal appointment (List of questions)The first step in most appraisals is the property inspection. 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, make sure it is clutter free and that we can get to things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of outside walls.
You can make our visit go faster and improve the accuracy of the appraisal report by having the following things on hand:
What does "Market Value" mean? (List of questions)In real estate appraising, Market Value is commonly defined as:
Who has rights to the appraisal report? (List of questions)For mortgage transactions, the lender requests 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 certainly entitled to a copy of the report - it's usually bundled with all the other closing documents - but is not allowed 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 stipulate 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.
Which home renovations add the most to the price? (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, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.
No matter where you go, however, renovating a kitchen is almost always a safe move. 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 are right up there with kitchens, yielding 85%. Adding bedrooms and baths can also increase 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.