Castle Appraisal Service, Inc. has answers to "Frequently Asked Questions"
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Castle Appraisal Service, Inc. is always more than happy to reply to any concerns you might have about appraisals or real estate in Nueces County.
Feel free to contact us today.
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Describe an appraisal
Describe what an appraiser does
What are the reasons I would need services from Castle Appraisal Service, Inc.?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
Upon completion of the report, how can I have a guarantee that the value conclusion is accurate?
How difficult is it to become certified?
Who hires Castle Appraisal Service, Inc.
Where does an appraiser get the data used to estimate values in Nueces County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
What does "Market Value" mean?
Once complete, who actually owns the appraisal report?
How can I get the most ROI out of home improvements?
Describe an appraisal (List of questions)
The appraisal process is an evaluation that produces an opinion of value.
This opinion or estimate is found using a formal method that typically utilizes three "common approaches to value".
One of the three is the Cost Approach - which is how much capital would be required to replace the improvements, less physical deterioration and other factors, then adding the land value.
Another of the processes is the Sales Comparison Approach - which involves discovering a comparison to other similar nearby properties which have recently sold.
The Sales Comparison Approach is normally the most accurate and clearest indicator of a liklely sales price for a home.
The Income Approach is generally used for finding the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.
Describe what an appraiser does (List of questions)
An appraiser offers a fair and credible opinion of market value, to be used in making real estate transactions.
Appraisers demonstrate their professional analysis in appraisal reports.
What are the reasons I would need services from Castle Appraisal Service, Inc.? (List of questions)
There are a lot of reasons to get an appraisal from Castle Appraisal Service, Inc. with the usual reason being real estate and mortgage transactions.
A few other reasons for obtaining an appraisal include:
- To receive a loan.
- If you would like to reduce your property tax burden.
- To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
- To fight improperly assessed property taxes.
- If you need to take care of an estate.
- To give you a leg-up when purchasing a home.
- To determine a likely price when selling real estate.
- To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
- Because a government agency such as the IRS requires it.
- It's possible you could be involved in a lawsuit - an appraisal will definitely help.
Click here for a more extensive explanation of the process about getting an appraisal.
Appraisers do not do complete house inspections and are not home inspectors.
The purpose of a home inspection is to evaluate the structure of the home from bottom to top.
The archetypal house inspector's report will contain 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)
Simply put, it's like comparing Shakespeare to reality TV.
What the CMA depends on are superficial trends.
The appraisal is based on similar proven comparable sales.
Also, the appraisal looks at other factors like condition, location and construction prices.
The CMA will provide a non-specific figure.
An appraisal delivers a defensible and carefully documented opinion of value.
But the largest differentiator is who's behind the report.
Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation.
The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties.
Moreover, the appraiser is an unbiased party, with no conditional interest in the value of a home, unlike the real estate agent, whose income is tied to the value of the home.
Each report must demonstrate a believable estimate of value and will document the following:
- Who engaged the appraiser and other intended users.
- How the appraisal is supposed to be used.
- The appraisal's purpose.
- The type of value contained and a definition of that value.
- The effective date of the value opinion.
- Relevant property attributes, including: location, physical characteristics, legal attributes, economic factors, the property rights in question, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible factors.
- Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and other items of a similar nature.
- Division of interest, such as fractional interest, physical segment and partial holding.
- What was included in the activity of completing the job.
For a more comprehensive look at all that goes into an appraisal report click here: Sample Appraisal Report
Upon completion of the report, how can I have a guarantee that the value conclusion is accurate? (List of questions)
In communicating an appraisal report, each appraiser must make sure of the following:
- That the information analysis contained in the appraisal was proper.
- Whether individually or collectively, there were no substantial errors contained in the report, nor any relevant details left out.
- That appraisal services were not executed in a careless or negligent manner.
- The final appraisal report was easy to explain, credible and defensible.
To become a state licensed appraiser, we must satisfy extensive education and experience requirements that enable us to produce an unbiased opinion.
In addition, appraisers must abide by a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for working up an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).
(List of questions)
Regulations regarding licensing and certification vary from state to state. In general, licensing and certification is most often associated with many hours of coursework, tests and real world experience.
Once an appraiser is licensed, he/she must then complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.
Who hires Castle Appraisal Service, Inc. (List of questions)
Typically, appraisers are called upon by lenders to render a value opinion on a home involved in a loan transaction - to make sure the subject is truly adequate collateral for the loan.
Appraisers also provide opinions in litigation cases, tax matters and investment decisions.
Where does an appraiser get the data used to estimate values in Nueces County or other areas? (List of questions)
Collecting information is one of the main things an appraiser engages in.
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 noted by the appraiser while on site.
General data is gathered from a variety of places.
Local Multiple Listing Services (MLS) have information on recently sold homes that could 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 service.
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? (List of questions)
Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps.
When selling your home, an appraisal helps you set a price that maximizes profit and reduces time on the market.
When buying, be sure you're not overpaying by commissioning an independent appraisal.
For those settling an estate or divorce, an appraisal from Castle Appraisal Service, Inc. is the best documentation to ensure assets are divided fairly.
A house 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? (List of questions)
PMI stands for Private Mortgage Insurance.
This added policy takes care of the lender in case a borrower is unable to pay on the loan and the market price of the house is less than what the borrower still owes on the loan.
You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.
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Does your monthly house payment have a lineitem for PMI?Call Castle Appraisal Service, Inc. today at (361) 994-5114 or send us an e-mail. A current appraisal could save you thousands.
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Should I do anything in advance of the appraisal inspection (List of questions)
The first step in most appraisals is the home 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.
Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house . Trim any shrubs and move any items that would get in our way while we measure the structure. Indoors, make sure the appraiser can get to appliances like furnaces and water heaters.
You can make things go faster and improve the accuracy of the appraisal report by having the following things on hand:
- A plot plan or survey of the house and land (if available).
- List of personal property to be sold with the building.
- Title policy that describes encroachments or easements.
- Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
- A list of "proposed" improvements when the property is being appraised "as complete".
What does "Market Value" mean? (List of questions)
In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
"The most probable price (in terms of money) which a property should bring in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller each acting prudently and 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: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in United States 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."
Once complete, who actually owns the appraisal report? (List of questions)
In most real estate transactions, the appraisal is ordered by the lender.
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 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 hiring the appraiser for things outside securing a mortgage.
In these situations, the appraiser may state 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 use the appraisal for any purpose.
How can I get the most ROI out of home improvements? (List of questions)
Like all things real estate, this is dependent on a home's location.
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.
No matter where you go, however, renovating a kitchen is almost always a safe investment.
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%.
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.
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