Diebold Appraisal Services, Inc. has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(List of questions) An appraiser performs an estimation that generates an opinion of value. There are three "common approaches to value" which helps the appraiser arrive at this opinion or estimate. One of the methods in use is the Cost Approach, which evaluates what it would cost to replace the improvements to the property, less the depreciation and physical deterioration, plus the land value. The Sales Comparison Approach deals with searching for comparable properties in the vicinity and discerning value based on making a comparison of those homes to the house in question. Being the most commonly used approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a residence. 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 would bring in.
What does an appraiser do?(List of questions) An appraiser provides a professional, unbiased opinion of market value, often in the context of a real estate purchase. Appraisers show their professional findings in appraisal reports.
What would cause me to request services from Diebold Appraisal Services, Inc.?(List of questions) There are a lot of reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for ordering an appraisal report include:
How is an appraiser different than a home inspector? (List of questions)The appraiser is not a home inspector and does not do a comprehensive home inspection. A third-party home inspector will evaluate the structure of the property, from the roof to the foundation. The usual property inspector's report will include an evaluation of the condition of the property'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.
Is an appraisal the same as a comparative market analysis(CMA)?(List of questions) To be blunt, it's like comparing broadband and dial-up. The CMA relies on vague local market trends. An appraisal is based on comparable sales that can be proven by records. In addition, the appraisal verifies other factors like condition, location and building prices. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.
Who's behind the report is frankly the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, create CMA's. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon sum for assignments, regardless of their value conclusion.
What can I expect to see in my appraisal report? (List of questions)Each appraisal should demonstrate a believable value opinion and should clearly state the following:
Once the assignment has been completed, how can I have a guarantee that the value conclusion is valid?(List of questions) In the documentation of an appraisal, each appraiser must ensure the following:
Who employs appraisers?(List of questions) Mortgage lenders are an appraiser's typical client, requiring their services to ensure a home 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 an appraiser get the data used to estimate values in Miami County or other areas?(List of questions) Gathering data is one of the primary tasks an appraiser does. Data can be split into Specific or General. Specific data is gathered 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. Local Multiple Listing Services (MLS) provide information on recently sold homes that might be used as comparables. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood product.
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.
What can a full appraisal do for me?(List of questions) An appraisal is a worthwhile whenever the value of your home is pertinent to a financial decision. For those selling a home, you'll want to determine 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 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. Knowing its true value means you can make smart financial decisions.
What exactly is PMI and how can I get rid of it?(List of questions) PMI is short for for Private Mortgage Insurance. It guards the lender if a borrower is unable to pay on the loan and the value of the house is lower than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.
How do I get ready for the appraiser?(List of questions) We start 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 features. On the home's interior, make sure it is clutter free and that we can find our way to things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of outside walls.
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?(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 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 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.
It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these cases, the appraiser may define the purpose of the appraisal; 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 answer to this is different depending upon the location of the home. 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
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 weren't far behind, returning 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.