Chris Goodson Appraisal Service, inc has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(List of questions) An appraisal report is an evaluation that concludes with an opinion of value. This opinion or estimate is discerned using a formal process that generally utilizes the three main "common approaches to value". The Cost Approach is one of the processes that appraisers use to find value; it involves concluding what the improvements would cost minus physical deterioration, adding the land value. The Sales Comparison Approach deals with searching for comparable properties in close proximity and discovering the value based on comparing those houses to the home in question. The Sales Comparison Approach is normally the most accurate and clearest indicator of value for a residential 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.
Describe what an appraiser does(List of questions) An appraiser produces a fair and credible opinion of market value, often in the context of a real estate purchase. Appraisers present their conclusions in appraisal reports.
Why would someone request services from Chris Goodson Appraisal Service, inc?(List of questions) There are many reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for purchasing an report include:
What is the difference between an appraisal and a home inspection? (List of questions)The appraiser is not a home inspector and does not do a comprehensive home inspection. The point of a home inspection is to investigate the structure of the property from foundation to rooftop. The stereotypical house inspector's report will contain 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 accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.
What is the difference between an appraisal and a comparative market analysis (CMA)?(List of questions) Frankly, they share nothing in common. What the CMA relies upon are superficial trends. Appraisals use comparable sales which are verifiable resources. In addition, the appraisal looks at other factors like condition, location and construction costs. 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 hands down 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, Kansas licensed professional who has formed a career on valuing homes in and around McPherson County creates the appraisal. 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 previously agreed upon fee for work they perform, regardless of their value conclusion.
What are the contents of an appraisal report? (List of questions)Each appraisal should reflect a believable estimate of value and must identify the following:
Once the report is done, what guarantee is there that the final number is legitimate?(List of questions) In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
Who are an appraiser's customers?(List of questions) Commonly, appraisers are called upon by mortgage lenders to render a value opinion on a house involved in a loan transaction. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.
Where does an appraiser get the data used to estimate values in McPherson County or other areas?(List of questions) Collecting data is one of the primary functions of an appraiser. Data can be divided into Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.
General data is collected from a variety of sources. 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 courthouse documents reveal 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 most importantly, the appraiser assembles 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?(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 figure out 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, be sure you're not overpaying by getting an independent appraisal. For parties settling an estate or divorce, an appraisal from Chris Goodson Appraisal Service, inc is the best way to ensure assets are split up properly. Simply put, a house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.
What exactly is PMI and how can I get rid of it?(List of questions) PMI is the common abbreviation for for Private Mortgage Insurance. PMI takes care of the lender if a borrower defaults on the loan and the market price of the property is lower 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 inspection(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. The best thing you can do to help is make sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any shrubs and relocate any items that would get in our way while we measure the structure. Indoors, make sure we can get to items 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 is "Market Value?"(List of questions) In real estate appraising, Market Value is commonly defined as:
Does the appraisal belong to the bank or the consumer?(List of questions) For mortgage transactions, the lender orders 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 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.
This rule doesn't apply when a home owner engages an appraiser directly. In these scenarios, the appraiser may stipulate how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can use the appraisal for any purpose.
How can I get the most ROI out of home improvements?(List of questions) The added value of a particular amenity truly depends on the local market. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!
As a rule, the best ROI from renovating a home comes in the kitchen. 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 are right up there with kitchens, returning 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.