Hasson Appraisals has answers to "Frequently Asked Questions"
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Hasson Appraisals is willing to elaborate on any questions you might have about appraisals in Louisville and Jefferson County. Contact Hasson Appraisals today to learn how we can help you with your specific valuation problems. |
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Describe an appraisal
Describe what an appraiser does
What would cause me to request your services?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
Once the report has been completed, how can I have a guarantee that the final number is credible?
What goes into an appraiser's certification?
Who do appraisers work for?
Where does an appraiser get the data used to estimate values in Jefferson County or other areas?
Why should I hire a licensed appraiser?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal inspection
What does "Market Value" mean?
Who actually owns the appraisal report?
How can I get the most ROI out of home improvements?
Describe an appraisal (Go to list of questions)An appraisal is an investigation allowing the appraiser to come to an opinion of value. There are three "common approaches to value" which assists the real estate appraiser conclude this opinion or estimate. One of them is the Cost Approach - which is how much capital would be required to replace the improvements, less physical deterioration and other factors, plus the land value. The Sales Comparison Approach deals with searching for similar houses in the vicinity and discovering the value based on comparing those homes to the home being appraised. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a residential property. The Income Approach is primarily used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of income a property produce.
Describe what an appraiser does (Go to list of questions)An appraiser forumlates a fair and credible assessment of market value, in the support of real property transactions. Appraisers document their conclusions in appraisal reports.
What would cause me to request your services? (Go to list of questions)There are a lot of reasons to purchase an appraisal from Hasson Appraisals with the most common reason being real estate and mortgage transactions. Other reasons for obtaining an appraisal include:
- If you would like to lower your property tax burden.
- To help a homeowner realize if they owe less than 80% of their home's value and remove insurance.
- To fight inflated property taxes.
- If you need to settle an estate.
- To provide you a negotiating tool when purchasing real estate.
- To determine a likely sales price when listing your home.
- To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
For a more extensive description of the appraisal process click here.
Appraisers do not do complete home inspections and are not home inspectors. A third-party home inspector will inspect the structure of the property, from the top to the bottom. Generally, a home inspection report will explain the amenities and the requirements of the property: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.
What is the difference between an appraisal and a comparative market analysis (CMA)? (Go to list of questions)Frankly, it's like comparing sugar and saccharin. What the CMA relies upon are vague trends. An appraisal relies on comparable sales that can be proven by public record. The appraisal report will also include neighborhood and building values. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
Who's creating the report is frankly the biggest difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. The appraisal is created 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 property's value, unlike the real estate agent, who gets a commission based upon the price of the home.
Every appraisal should reflect a believable estimate of value and will clearly state the following:
- The client and other intended users.
- How the appraisal is intended to be used.
- The appraisal type and definition of value.
- The effective date of the appraiser's opinions and conclusions.(Sometimes this is in the past or maybe the future for new construction!)
- Relevant property attributes, including: location, physical description, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible factors.
- Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
- Division of interest, such as fractional interest, physical segment and partial holding.
- What was involved in the activity of completing the appraisal.
For a more in depth look at what goes into an appraisal report click here: Sample Appraisal Report
Once the report has been completed, how can I have a guarantee that the final number is credible? (Go to list of questions)In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
- The appraisal used a suitable analysis of the data.
- Whether individually or collectively, there were no grave errors contained in the appraisal, nor any material details left out.
- That appraisal services were provided in a careful and conscientious fashion.
- The final appraisal report was transparent, credible and conclusive.
There are rigorous education and real world experience requirements that must be met in order to achieve the designation of "licensed appraiser" in Kentucky. Plus, appraisers must obey a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for developing an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).
(Go to list of questions)
Licensing and certification is achieved through classroom study, tests and practical experience. Once an appraiser is licensed, he or she must then take continuing education courses so the license stays up to date. To see the specific requirements for any state click here.
Who do appraisers work for? (Go to list of questions)Commonly, appraisers are called upon by mortgage lenders to render a value opinion on a house involved in a loan transaction. Attorneys and CPAs also hire appraisers for divorce and estate settlements.
Where does an appraiser get the data used to estimate values in Jefferson County or other areas? (Go to list of questions)One of the primary things an appraiser does is to gather property data. Data can be classified as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.
General data is collected from a numerous sources. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. To verify actual sales prices, we research tax records and other public documents. Appraisers often have 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 service.
And last but not least, the appraiser assembles general data from his or her collective knowledge gained from doing assignments for other houses in the same market.
Why should I hire a licensed appraiser? (Go to list of questions)An appraisal is a valuable tool anytime your home's value is relevant to some financial decision. If you're selling your home, an appraisal assists you in setting the most appropriate price. 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 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 short for for Private Mortgage Insurance. PMI guards the lender in case a borrower is unable to pay on the loan and the value of the property is lower than the balance of the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.
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Has your home value appreciated since you first purchased? Call Hasson Appraisals today at 5028366068 to see if you can save money by removing your Private Mortgage Insurance premium. |
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Should I do anything in advance of the appraisal inspection (Go to list of questions)We start with an inspection of the home. 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. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house . Trim any landscaping and relocate any items that would make it difficult to measure the structure. Indoors, make sure we can easily access items like furnaces and water heaters.
To help expedite our work as well as ensure a more accurate report, try if possible to have the following items:
- Any records on the purchase of the property for the last three years.
- List of personal property to be sold with the building.
- Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
- Brag sheet that lists major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
- Most recent real estate tax bill and or legal description of the property.
What does "Market Value" mean? (Go to list of questions)In real estate appraising, Market Value is commonly defined as:
"The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and knowledgeably, and assuming the price is not affected by undue stimulus. Implicit in this definition is the consummation of a sale as of a specified date and the passing of title from seller to buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and the price represents the normal consideration for the property sold unaffected by special or creative financing or sales concessions granted by anyone associated with the sale."
Who actually owns the appraisal report? (Go to list of questions)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 certainly entitled to a copy of the appraisal - 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.
How can I get the most ROI out of home improvements? (Go to list of questions)This really depends on where the home is. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes
As a rule, the best ROI from renovating a home comes in the kitchen. 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, an improvement that may not add value would be painting just for the sake of redecorating.
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