Hansen Appraisal Services, LLC. has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(See list of FAQ's) The method of performing an appraisal report consists of an estimation which leads to an opinion of value. There are three "common approaches to value" which helps the real estate appraiser arrive at this opinion or valuation. The Cost Approach is one of the processes that real estate appraisers use to find value; it involves figuring what the improvements would cost less physical deterioration, adding the land value. The Sales Comparison Approach deals with searching for similar houses in close proximity and discerning value based on comparing those prior sales to the property in question. The Sales Comparison Approach is normally the most definitive and clearest indicator of value for a home. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it involves estimating what an investor would pay based on the income generated by the property.
Describe what an appraiser does(See list of FAQ's) An appraiser generates a professional, unbiased opinion of market value, often in the context of a real estate purchase. Appraisers reveal the details of their professional investigation in appraisal reports.
What are the reasons I would need services from Hansen Appraisal Services, LLC.?(See list of FAQ's) There are a lot of reasons to get an appraisal from Hansen Appraisal Services, LLC. with the most common reason being real estate and mortgage transactions. Some other reasons for purchasing an appraisal include:
How is an appraisal different than a home inspection? (See list of FAQ's)The appraiser is not a home inspector nor does he/she do a complete home inspection. An inspection is a third-party evaluation of the livable structure and appliances of a property, from the roof to the bottom. Generally, a home inspection report will evaluate the amenities and the requirements of the home: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.
My agent performed a CMA for me. Is that the same as an appraisal?(See list of FAQ's) To be blunt, it's like comparing sugar and saccharin. The CMA uses market trends to generate most of their business. Appraisals use comparable sales which are valid resources. The appraisal report will also include neighborhood and building values. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.
The person creating the report is frankly the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA's. A certified, Washington licensed professional who has formed their livelihood on valuing real estate in and around Clark County is behind the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat fee for assignments, regardless of their value conclusion.
What's in an appraisal report? (See list of FAQ's)Every report must reflect a supported value opinion and will document the following:
After completing the report, how can I have certainty that the value indicated is veritable?(See list of FAQ's) In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
Who employs appraisers?(See list of FAQ's) Most of the time, appraisers are hired by mortgage lenders to render a value opinion on property involved in a loan transaction - to make sure the house is indeed adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.
Where does an appraiser get the information used to estimate values in Clark County or other areas?(See list of FAQ's) One of the main tasks an appraiser engages in 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 documented by the appraiser while on site.
General data is collected from a number of places. To find out about recent sales to be used as "comps", an appraiser will often use the local Multiple Listing Service. To verify actual sales prices, we research items in the assessor's office and other public documents that are usually online nowadays. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood product.
And most importantly, the appraiser assembles general data from his or her past experience in creating appraisals for other properties in the same market.
Why do I need a professional appraisal?(See list of FAQ's) If you're involved in any kind of financial decision and the value of your home is relevant, you'll want a full appraisal. When selling your home, an appraisal helps you set the most appropriate price. When buying, be sure you're not overpaying by getting an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. 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?(See list of FAQ's) PMI is an acronym for Private Mortgage Insurance. It protects the lender if a borrower doesn't pay on the loan and the market price of the home is lower than what is owed on the loan. 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 appointment(See list of FAQ's) The first step in most appraisals is the property 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 status of its features. Inside, 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 outside walls.
To help expedite our work as well as ensure a more accurate report, attempt if possible to have the following items:
Define "Market Value"(See list of FAQ's) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Once complete, who actually owns the appraisal report?(See list of FAQ's) 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 report - it's usually included with all the other closing documents - but is not allowed 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 scenarios, the appraiser may state how the appraisal can be used; 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.
Which home renovations add the most to the price?(See list of FAQ's) This really depends on where the home is. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes
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.