Shirley E. Mitchell Real Estate Appraisals has answers to "Frequently Asked Questions"
Define the term "Appraisal"
Define the term "Appraisal"(Top) An appraiser provides an evaluation that leads to an opinion of value. This opinion or estimate is concluded by a formal process that usually utilizes three "common approaches to value". One of the methods in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the property, less the depreciation and physical dilapidation, adding the land value. Another of the approaches is the Sales Comparison Approach - which involves finding a comparable analysis to other similar nearby properties which have recently sold. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a house. The Income Approach is generally used for determining 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(Top) An appraiser produces an unbiased and well supported opinion of market value, to be used in making real estate transactions. Appraisers present their findings in appraisal reports.
What are the reasons someone would need services from Shirley E. Mitchell Real Estate Appraisals?(Top) There are many reasons to purchase an appraisal from Shirley E. Mitchell Real Estate Appraisals with the usual reason being real estate and mortgage transactions. Other reasons for getting an report include:
My agent performed a CMA for me. Is that the same as an appraisal?(Top) Frankly, it's like comparing broadband and dial-up. The CMA uses market trends to conduct most of their business. The appraisal is based on similar definite comparable sales. In addition, the appraisal looks at other factors like condition, location and construction costs. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.
But the most significant factor is the person creating the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, generate CMA's. A certified, state licensed professional who has formed their livelihood on valuing homes in and around Travis County is behind the appraisal. Moreover, the appraiser is an independent voice, with no conditional interest in the value conclusion, unlike the agent, who gets a commission based upon the value of the home.
Once the assignment is done, what guarantee is there that the final number is veritable?(Top) In communicating an appraisal report, each appraiser must make sure of the following:
Who are an appraiser's customers?(Top) Mortgage lenders are an appraiser's most likely client, requesting their services to ensure real estate 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 Travis County or other areas?(Top) One of the primary things an appraiser does is to assimilate 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 documented by the appraiser while on site.
General data is collected from a number of places. Local Multiple Listing Services (MLS) provide information on recently sold homes that might be used as comparables. Tax records and other public documents reveal actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood system.
And last but not least, the appraiser assimilates general data from his or her collective knowledge gained from doing assignments for other properties in the same market.
How can a licensed appraiser help me?(Top) An appraisal is a valuable tool anytime your home's value is relevant to a financial decision. If you're selling your home, an appraisal helps you set the most appropriate price. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Shirley E. Mitchell Real Estate Appraisals is the best documentation to ensure assets are split up fairly. Simply put, a house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.
What exactly is PMI and how can I get rid of it?(Top) PMI is short for for Private Mortgage Insurance. This supplementary policy guards the lender if a borrower is unable to pay on the loan and the value of the home is lower than the balance of 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(Top) The first step in most appraisals is the property inspection. 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. On the home's interior, make sure it is clutter free and that we can access things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of exterior walls.
The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
Define "Market Value"(Top) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Who has rights to the appraisal report?(Top) 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 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.
This rule doesn't apply when a home owner engages an appraiser directly. In these scenarios, the appraiser may define how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can do whatever they want with the appraisal.
I want to get more for my house. Where should I spend money renovating?(Top) 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. 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, an improvement that may not add value would be painting just for the sake of redecorating.