Lisa Barefoot Appraisal Services LLC has answers to "Frequently Asked Questions"
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Define the term "Appraisal"
What does an appraiser do?
What are the reasons I would require services from Lisa Barefoot Appraisal Services LLC?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
Once the assignment has been completed, how can I have confidence that the final number is veritable?
How are appraisers certified?
Who do appraisers work for?
Where does an appraiser get the information used to estimate values in Orange County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
Define "Market Value"
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?
The appraisal process is an estimation that generates an opinion of value.
The appraiser will use a few "approaches," typically three, to draw up the estimation of market value.
One of the processes in use is the Cost Approach, which finds what it would cost to restore the improvements to the home, less the age and physical deterioration, plus the land value.
The Sales Comparison Approach deals with searching for similar homes nearby and figuring out the value based on comparing those prior sales to the home in question.
The Sales Comparison Approach is commonly the most definitive and best indicator of value for a residential property.
The Income Approach is generally used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.
An appraiser provides an impartial and well justified determination of market value, to be used in making real estate transactions.
Appraisers summarize their professional conclusions in appraisal reports.
There are a lot of reasons to purchase an appraisal from Lisa Barefoot Appraisal Services LLC with the most common reason being real estate and mortgage transactions.
A few other reasons for ordering an appraisal report include:
If you need more information regarding the appraisal process, please click here.
- If you are applying for a loan.
- To lower your property taxes.
- To show a homeowner has 30% equity and remove insurance.
- To fight high property taxes.
- To settle an estate.
- To offer you a leg-up when purchasing real estate.
- To determine a reasonable property value when putting your home on the market.
- To ensure parties are provided just compensation in eminient domain cases.
- Because an official agency such as the IRS requires it.
- If you ever find yourself in a civil case.
Appraisers do not provide home inspections and are not home inspectors.
An inspection is a third-party investigation of the available structure and appliances of a property, from the roof to the bottom.
Commonly, a home inspection report will evaluate the amenities and the necessities of the property: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.
Frankly, it's like comparing broadband and dial-up.
The CMA depends on indefinite trends in the market.
An appraisal is based on comparable sales that can be verified by public record.
The appraisal report will also include neighborhood and building costs.
A CMA delivers a "ball park figure."
Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
The person creating the report is hands down the biggest difference between a CMA and an appraisal.
A CMA is written by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends.
The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties.
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 previously agreed upon fee for assignments, regardless of their value conclusion.
Every report should indicate a supported estimate of value and should clearly state the following:
For a more detailed view of the work that goes into an appraisal report click here: Sample Appraisal Report
- Who engaged the appraiser and other intended users.
- How the appraisal is supposed to be used.
- The reason for the appraisal.
- The type of value contained and a definition of that value.
- The effective date of the appraiser's opinions and conclusions.(Sometimes this is in the past or maybe the future for new construction!)
- Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible considerations.
- All known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
- Division of interest, such as fractional interest, physical segment and partial holding.
- What was involved in the process of completing the assignment.
In communicating an appraisal report, each appraiser must ensure the following:
There are rigorous classroom and practical experience requirements that must be met in order to become a licensed appraiser in Florida.
In addition, appraisers must obey a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for working up an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).
- That the information analysis utilized in the appraisal was appropriate.
- Whether individually or collectively, there were no substantial errors contained in the appraisal, nor any material details left out.
- That appraisal services were provided in a careful and judicious fashion.
- That a credible, substantiated appraisal report was imparted.
Licensing and certification is achieved through classroom study, tests and experience working under a supervisor.
Once an appraiser is licensed, he or she must then take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.
Mortgage lenders are an appraiser's most likely customer, requesting their services to ensure a home involved in a mortgage transaction is enough to cover a loan balance in the case of default.
Appraisers also provide opinions for legal settlements, tax matters and investment decisions.
Compiling data is one of the primary occupations of an appraiser.
Data can be categorized as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.
General data is received from a numerous places.
To research recent sales to be used as "comps", we typically use the local Multiple Listing Service.
To verify actual sales prices, we research items in the assessor's office and other public documents.
Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood product.
And last but not least, the appraiser assembles general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.
Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps.
If you're selling your house, an appraisal assists you in setting the most appropriate price.
When buying, be sure you're not overpaying by commissioning 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. Knowing its true value is essential to making the right financial decisions.
PMI is short for for Private Mortgage Insurance.
It protects the lender in case a borrower is unable to pay on the loan and the market price of the property is lower than what is owed on 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.
The money you keep from getting rid of your PMI pays for the appraisal in no time. Nobody is more qualified than Lisa Barefoot Appraisal Services LLC when it comes to analyzing real estate appreciation in Ocoee and Orange County. Contact us today.
We begin with an inspection of the property.
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.
Inside, 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.
To help speed things along plus ensure a more accurate report, attempt if possible to have the following items:
- A plot plan or survey of the house and land (if available).
- List of personal property to be sold with the building.
- Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
- A list of any major home improvements and enhancements, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
- A list of "proposed" improvements if the property is to be appraised "as complete".
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."
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 certainly entitled to a copy of the report - 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 cases, the appraiser may stipulate how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can use the appraisal for any purpose.
A home's location - what city it is in and even what part of that city - is key to this popular question.
if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want
No matter where you go, however, renovating a kitchen is almost always a safe move.
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%.
On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.