Rogenmoser Appraisal Service has answers to "Frequently Asked Questions"
What is an appraisal?
What is an appraisal?(See list of FAQ's) The process of performing an appraisal deals with an estimation which leads to an opinion of value. The real estate appraiser must use a number of "approaches," typically three, to draw up the estimation of market value. One of the processes in use is the Cost Approach, which is what it would cost to replace the improvements to the house, minus depreciation and physical dilapidation, plus the land value. The Sales Comparison Approach involves finding comparable homes nearby and finding value based on making a comparison of those prior sales to the house being appraised. The Sales Comparison Approach is normally the most accurate and best indicator of value for a house. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it deals with estimating what an investor would pay based on the capital generated by the property.
What does an appraiser do?(See list of FAQ's) An appraiser generates a professional, unbiased assessment of market value, often in the context of a real estate exchange. Appraisers illustate their expert conclusions in appraisal reports.
Why would a person request services from Rogenmoser Appraisal Service?(See list of FAQ's) There are a lot of reasons to get an appraisal from Rogenmoser Appraisal Service with the most common reason being real estate and mortgage transactions. Some other reasons for obtaining an appraisal report include:
Is an appraisal the same as a home inspection? (See list of FAQ's)Appraisers do not do complete residential property inspections and are not home inspectors. The purpose of a home inspection is to evaluate the structure of the home from bottom to rooftop. The general property inspector's report will contain an evaluation of the condition of the house's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.
Is an appraisal the same as a comparative market analysis(CMA)?(See list of FAQ's) To be blunt, it's like comparing Shakespeare to reality TV. What the CMA relies upon are superficial trends. Appraisals use similar sales which are verifiable resources. The appraisal report will also contain area and building costs. 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.
But the largest differentiator is the person creating the report. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. 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 assignments, regardless of their value conclusion.
What's in an appraisal report? (See list of FAQ's)The main objective of an appraisal report is to give a value opinion, and depending on the scope of the report, you'll usually see the following:
Upon completion of the appraisal, what assurance is there that the value indicated is veritable?(See list of FAQ's) In communicating an appraisal report, each appraiser must make sure of the following:
Who hires Rogenmoser Appraisal Service(See list of FAQ's) Commonly, appraisers are called upon by lenders to estimate the value of real estate involved in a loan transaction - to make sure the property is indeed adequate collateral for the loan. Attorneys and CPAs also hire appraisers for divorce and estate settlements.
Where does an appraiser get the data used to estimate values in Sacramento County or other areas?(See list of FAQ's) One of the primary things an appraiser does is to collect property data. Data can be categorized as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.
General data is gathered from a variety of places. Local Multiple Listing Services (MLS) provide data on recently sold homes that could be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood product.
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?(See list of FAQ's) 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 home, an appraisal will help you determine 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 people settling an estate or divorce, an appraisal from Rogenmoser Appraisal Service is the best way to ensure assets are divided evenly. 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 stands for Private Mortgage Insurance. This added plan protects the lender if a borrower is unable to pay on the loan and the value of the house is less 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.
Do you need anything from the homeowner in advance?(See list of FAQ's) The first step in most appraisals is the property inspection. During this process, we 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. 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 outside walls.
The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
How does an appraiser define "Market Value"?(See list of FAQ's) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Who actually owns the appraisal report?(See list of FAQ's) For mortgage transactions, the lender orders 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 entitled to a copy of the report - it's usually included 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 scenarios, 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 do whatever they want with the appraisal.
Are some home improvements more worthwhile than others?(See list of FAQ's) A home's location - what city it is in and even what part of that city - is key to this popular question. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.
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 were second, returning 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.