Timberline Appraising Inc. has answers to "Frequently Asked Questions"
Define the term "Appraisal"
Define the term "Appraisal"(Go to list of questions) The procedure of creating an appraisal report consists of an investigation which leads to an opinion of value. This opinion or estimate is arrived at through a formal process that typically utilizes three "common approaches to value". 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 deterioration, adding the land value. Another of the processes is the Sales Comparison Approach - which concerns making a comparison to other similar properties within a close vicinity which have recently sold. Being the most commonly used approach, the Sales Comparison Approach is generally the most precise and best indicator of market value for a residence. The Income Approach is generally used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.
Describe what an appraiser does(Go to list of questions) An appraiser produces a fair and credible determination of market value, often in the context of a real estate purchase. Appraisers present their professional analysis in appraisal reports.
What would cause me to need services from Timberline Appraising Inc.?(Go to list of questions) There are a lot of reasons to purchase an appraisal from Timberline Appraising Inc. with the usual reason being real estate and mortgage transactions. Some other reasons for ordering an appraisal report include:
How is an appraiser different than a home inspector? (Go to list of questions)Appraisers do not do provide home inspections and are not home inspectors. An inspection is a third-party evaluation of the available structure and electrical and mechanical systems of a home, from the roof to the bottom. Commonly, a home inspection report will explain the amenities and the requirements of the house: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.
What is the difference between an appraisal and a comparative market analysis (CMA)?(Go to list of questions) Frankly, they have nothing in common. The CMA depends on indefinite local market trends. The appraisal is based on similar valid comparable sales. Also, the appraisal checks 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 person creating the report is frankly the most significant 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. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Moreover, the appraiser is an unbiased voice, with no conditional interest in the value of a home, unlike the agent, who gets a commission based upon the value of the home.
What's in an appraisal report? (Go to list of questions)The main point of an appraisal report is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:
Upon completion of the report, what assurance is there that the value conclusion is veritable?(Go to list of questions) In the documentation of an appraisal, each appraiser must make sure of the following:
Who hires an appraiser?(Go to list of questions) Typically, appraisers are called upon by lenders to render a value opinion on a house involved in a loan transaction - to make sure the subject is truly adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.
Where does Timberline Appraising Inc. get the data used to estimate values in Salt Lake County or other areas?(Go to list of questions) Compiling data is one of the main things an appraiser engages in. Data can be classified as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.
General data is gathered from a number of places. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. Tax records and other courthouse documents reveal actual sales prices in a market. Appraisers often need to report when a property is in a flood zone, so 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 houses in the same market.
What can a full appraisal do for me?(Go to 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 also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from Timberline Appraising Inc. is the best documentation 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?(Go to list of questions) PMI is the common abbreviation for for Private Mortgage Insurance. PMI guards the lender if a borrower doesn't 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.
How do I get ready for the appraiser?(Go to list of questions) We begin with an inspection of the property. 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 status of its amenities. The best thing you can do to help is make sure we have easy access to the exterior of the house . Trim any bushes and relocate any items that would make it difficult to measure the structure. On the inside, make sure the appraiser can get to items like furnaces and water heaters.
You can make our visit go faster and improve the quality of the appraisal report by having the following things on hand:
What does "Market Value" mean?(Go to list of questions) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Who actually owns the appraisal report?(Go to list of questions) In most real estate transactions, the appraisal is ordered by the lender. 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 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 hires 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 stated otherwise, the home owner can do whatever they want with the appraisal.
Which home renovations add the most to the price?(Go to list of questions) 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
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 were second, yielding 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.