Q:
What is an appraisal?
A:
An appraisal is a thought process leading to an opinion
of value. This opinion or estimate is arrived
at through a formal process that typically uses the
three ''common approaches to value'': the Cost Approach,
the Sales Comparison Approach and the Income Approach.
The Cost Approach is what it would cost to replace
the improvements, less physical deterioration and
other factors, plus the land value. The Sales
Comparison Approach involves making a comparison to
other similar, nearby properties which have recently
sold. The Sales Comparison Approach is normally
the most accurate and best indicator of value for
a residential property. The third approach is
the Income Approach, which is of most importance in
appraising income producing properties - it involves
estimating what an investor would pay based on the
income produced by the property.
Q: What is ''Market Value?''
A:
Market value or fair market value is the most probable
price that a property should bring (will sell for)
in a competitive and open market under all conditions
requisite to a fair sale, the buyer and seller, each
acting prudently, 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:
-
Buyer and seller are typically motivated;
- Both
parties are well informed or well advised;
- A
reasonable time is allowed for exposure to the
open market;
- Payment
is made in terms of cash in U.S. 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.
Q:
What does an appraiser do?
A:
An appraiser provides a professional, unbiased
opinion of market value, to be used in making real
estate decisions. Appraisers present their
formal analysis in appraisal reports.
Q:
What can an appraisal do for me as a Buyer?
A:
It will tell you the fair market value of the
home you are planning on purchasing. You don't
want to spend money on a home that is valued at below
the purchase price. You want to know that your
new home will be worth what you are paying for it.
Q:
What can an appraisal do for me as a Seller?
A: You don't want to under sell you home.
You have put time, money and investment into your
home and you should get what it is worth. With
an appraisal, you will know what your home is worth.
Q:
What can an appraisal do for me as a Homeowner?
I am not buying or selling my home.
A:
A refinance can save money! An appraisal
can help you acquire a better rate for your mortgage
by showing that you have more equity in your home.
Reappraising your home, especially after modifications,
additions and repairs can help you refinance your
home. A first mortgage carries a lower interest
rate than second and third mortgages. You can
use that extra equity to consolidate your mortgage
loans, pay off your credit cards, and lower your higher
interest debts.
Q:
What are other ways I can save money?
A:
You can save money if you are paying PMI (Private
Mortgage Insurance). This is insurance your
mortgage company charges to insure that your mortgage
loan will get paid. If you financed your home
with less than 20% down, it is likely that you are
paying PMI. By getting an appraisal, you might
find that you have 20% equity in your home.
You can eliminate that PMI payment which could be
enough to make an extra home payment. Did you
know if you made one extra home payment a year, you
could cut your 30 year mortgage down by several years.
Q:
How long does it take to get an appraisal?
A:
We turn appraisals around within 24 to 72 hours
following the site inspection. Normally, appraisals
can take 1-3 weeks after site inspections by other
companies. We are efficient and fast!!!
