MacBride Appraisal has answers to "Frequently Asked Questions"
Define the term "Appraisal"
Define the term "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 helps the appraiser come to this opinion or valuation. The Cost Approach is one of the processes that real estate appraisers use to find the value of a house; it involves figuring what the improvements would cost minus physical depreciation, adding the land value. Easily the most common approach in figuring the value of a home is the Sales Comparison Approach which concerns making a comparison to comparable houses nearby. Being the most common approach, the Sales Comparison Approach tends to be the most precise and best indicator of market value for a residence. 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 income produced by the property.
Describe what an appraiser does(Go to list of questions) An appraiser forumlates a fair and credible determination of market value, in the support of real property transactions. Appraisers document their expert investigation in appraisal reports.
What would cause me to request services from MacBride Appraisal?(Go to list of questions) There are many reasons to obtain an appraisal from MacBride Appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for purchasing an appraisal report include:
What is the difference between an appraisal and a home inspection? (Go to list of questions)The appraiser is not a home inspector and does not do a full home inspection. An inspection is a third-party evaluation of the available structure and appliances of a home, from the top to the foundation. For the most part, a home inspection report will evaluate the amenities and the necessities of the home: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.
My agent performed a CMA for me. Is that the same as an appraisal?(Go to list of questions) Honestly, they share nothing in common. The CMA depends on indistinct market trends. An appraisal relies on comparable sales that can be verified by public record. The appraisal report will also contain 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 behind the report is actually the most significant difference between a CMA and an appraisal. Real estate agents produce 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 made a career on valuing properties in and around San Diego County creates the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon fee for assignments, regardless of their outcome.
What are the contents of an appraisal report? (Go to list of questions)The main objective of an appraisal document is to provide a value opinion, and depending on the scope of the report, you'll usually see the following:
Once the appraisal has been delivered, how can I have assurance that the value conclusion is trustworthy?(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:
Who engages the services of appraisers?(Go to list of questions) Commonly, appraisers are employed by mortgage lenders to render a value opinion on property 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 San Diego County or other areas?(Go to list of questions) One of the most important things an appraiser does is to compile data. Data can be classified as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.
General data is gathered from a many sources. Local Multiple Listing Services (MLS) have information on recently sold homes that could be used as comparables. To verify actual sales prices, we research tax records and other public documents. Appraisers routinely 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 most importantly, the appraiser gathers general data from his or her past experience in creating appraisals for other properties in the same market.
Why should I hire a licensed appraiser?(Go to list of questions) An appraisal is a worthwhile anytime your home's value is pertinent to some 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. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from MacBride Appraisal is the best way to ensure assets are split up properly. Simply put, a home 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?(Go to list of questions) PMI is short for for Private Mortgage Insurance. PMI protects the lender in the event a borrower doesn't pay on the loan and the value of the house is less than what is owed 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(Go to list of questions) The first step in most appraisals is the home 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. Inside, pick up any clutter and make sure we can get 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.
To help expedite our work as well as ensure a more accurate report, try if possible to have the following items:
Define "Market Value"(Go to list of questions) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Does the appraisal belong to the bank or the consumer?(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 entitled to a copy of the appraisal - it's usually bundled 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 engaging the appraiser for things outside securing a mortgage. In these situations, 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 do whatever they want with the appraisal.
Which home renovations add the most to the price?(Go to 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, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!
As a rule, the most value returned 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, returning 85%. Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.