TNC APPRAISAL SERVICE INC has answers to "Frequently Asked Questions"
Define the term "Appraisal"
Define the term "Appraisal" (List of questions)An appraisal is a thought process leading to an opinion of value. The real estate appraiser will use a number of "approaches," typically three, to come to the estimation of market value. The Cost Approach is one of the approaches that real estate appraisers use to find value; it involves figuring what the improvements would cost less physical degradation, plus the land value. The Sales Comparison Approach deals with searching for similar homes in the vicinity and figuring out the value based on comparing those prior sales to the property being investigated. Being the most popular approach, the Sales Comparison Approach is considered the most precise and best indicator of market value for a house. The third approach is the Income Approach, which is the best method in appraising income producing properties - it involves estimating what an investor would pay based on the money generated by the property.
Describe what an appraiser does (List of questions)An appraiser generates a fair and credible opinion of market value, in the support of real estate transactions. Appraisers show their professional analysis in appraisal reports.
What are the reasons I would request services from TNC APPRAISAL SERVICE INC? (List of questions)There are many reasons to order an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for purchasing an appraisal report include:
Is an appraisal the same as a home inspection? (List of questions)Home inspectors do not provide an opinion of value and do not use the same forms as appraisers. An inspection is a third-party investigation of the accessible 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 necessities of the property: air conditioning (weather permitting), electrical systems, 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.
Is an appraisal the same as a comparative market analysis(CMA)? (List of questions)Simply put, it's like comparing Shakespeare to reality TV. The CMA uses market trends to generate most of their business. The appraisal is based on specific proven comparable sales. The appraisal report will also include area 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 behind the report is hands down the most significant difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, state licensed professional who bases their livelihood on valuing real estate in and around Ocean County is behind the appraisal. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to accept a previously agreed upon fee for work they perform, regardless of their value conclusion.
What can I expect to see in my appraisal report? (List of questions)The main point of an appraisal document 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:
After completing the appraisal, how can I have a guarantee that the final number is valid? (List of questions)In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
Who engages the services of appraisers? (List of questions)Most of the time, appraisers are employed by lenders to render a value opinion on property involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.
Where does TNC APPRAISAL SERVICE INC get the data used to estimate values in Ocean County or other areas? (List of questions)One of the primary activities of an appraiser is to collect property data. Data can be categorized as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.
General data is collected from a numerous sources. To research recently sold homes to be used as "comps", we typically use the local Multiple Listing Service. Tax records and other courthouse documents reveal actual sales prices in a market. Appraisers often have to report when a property is 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 assimilates general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.
Why do I need a professional appraisal? (List of questions)If you're making any kind of financial decision and the value of your home is relevant, you'll want to hire a licensed appraiser. For those selling a home, you'll want to determine 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. When buying, be sure you're not overpaying by commissioning an independent appraisal. For those settling an estate or divorce, an appraisal from TNC APPRAISAL SERVICE INC is the best way to ensure assets are divided properly. A home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making the right financial decisions.
My mortgage statement has an item on it for PMI? Can I get rid of that? (List of questions)PMI is short for for Private Mortgage Insurance. PMI takes care of the lender if a borrower defaults on the loan and the value of the property 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.
Should I do anything in advance of the appraisal inspection (List of questions)The first step in most appraisals is the home inspection. 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 condition of its features. On the home's interior, make sure it is clutter free and that we can get to things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of exterior 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" (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. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The buyer is certainly 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 define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can use the appraisal for any purpose.
Are some home improvements more worthwhile than others? (List of questions)The answer to this is different depending upon the location of the home. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.
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 are right up there with kitchens, returning 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size.