A. M. Appraisals has answers to "Frequently Asked Questions"
A. M. Appraisals is always prepared to handle any inquiries you might have about appraisals in West Columbia and Lexington County.
Feel free to contact us today.
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The method of creating an appraisal report deals with an estimation which forms an opinion of value.
This opinion or estimate is figured using a formal process that commonly utilizes the three main "common approaches to value".
One of the processes is the Cost Approach - which is how much capital would be required to replace the improvements, minus physical deterioration and other factors, then adding the land value.
Easily the most common approach in finding the value of a house is the Sales Comparison Approach which concerns concluding a comparison to comparable properties nearby.
Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a house.
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 would bring in.
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An appraiser produces a professional, unbiased determination of market value, to be used in making real estate transactions.
Appraisers document their conclusions in appraisal reports.
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There are a lot of reasons to purchase an appraisal from A. M. Appraisals with the most common reason being real estate and mortgage transactions.
Some other reasons for obtaining an report include:
If you are applying for a loan.
To reduce your tax burden.
To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
To contest high property taxes.
To handle an estate.
To offer you an edge when purchasing a home.
To determine a likely sales price when selling real estate.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Government agencies such as the IRS need an appraisal on every house.
It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.
Click here for a more detailed explanation of the process dealing with getting an appraisal.
Home inspectors do not figure out an opinion of value and do not use the same forms as appraisers.
A third-party home inspector will investigate the structure of the property, from the top to the foundation.
Commonly, a home inspection report will evaluate the amenities and the requirements 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, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.
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Frankly, they share nothing in common.
The CMA depends on vague local market trends.
Appraisals use comparable sales which are valid resources.
In addition, the appraisal checks other factors like condition, location and building prices.
The CMA will provide a non-specific figure.
An appraisal delivers a defensible and carefully documented opinion of value.
The credentials of the person creating the report is frankly the biggest difference between a CMA and an appraisal.
A CMA is created 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 created by a licensed, certified professional who has made a career 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 flat fee for work they perform, regardless of their outcome.
The main objective of an appraisal report is to give a value opinion, and depending on the scope of the report, one will customarily see the following:
The client 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 the value reported.
The effective date of the value opinion.
Relevant property attributes, including: location, physical attributes, legal attributes, economic factors, the property rights in question, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible factors.
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.
The scope of work considered while working up the appraisal.
For a more in depth view of all that goes into an appraisal report click here: Sample Appraisal Report
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In communicating an appraisal report, each appraiser must make sure of the following:
The appraisal contained a suitable analysis of the information.
That significant errors of omission or commission were not committed individually or collectively.
That appraisal services were rendered in a careful and conscientious manner.
That a solid, substantiated appraisal report was imparted.
To become a state licensed appraiser, there are intense education requirements as well as on the jobexperience that must be logged.
Likewise, appraisers must stick to a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The rules for developing an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).
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Mortgage lenders are an appraiser's most likely customer, needing their services to ensure property involved in a mortgage transaction is adequate collateral for a loan.
Appraisers also provide opinions in litigation cases, tax matters and investment decisions.
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One of the primary tasks an appraiser must accomplish is to assimilate data.
Data can be split into Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.
General data is gathered from a number of sources.
To look up recent sales to be used as "comps", an appraiser will often go to the local Multiple Listing Service.
To verify actual sales prices, we use items in the assessor's office and other public documents that are usually online nowadays.
Appraisers routinely need to report when a property is in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.
And last but not least, the appraiser gathers general data from his or her past experience in creating appraisals for other properties in the same market.
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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 assists you in setting a price that maximizes profit and reduces time on the market.
When buying, you can avoid overpaying by commissioning an independent appraisal.
For people settling an estate or divorce, an appraisal from A. M. Appraisals is the best way to ensure assets are divided properly.
Simply put, a home is often the single, largest financial asset anybody owns. Knowing its true value means you can make informed financial decisions.
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PMI stands for Private Mortgage Insurance.
PMI takes care of the lender in case a borrower defaults on the loan and the value of the home 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.
Did you secure your mortgage with less than 20% down? Contact A. M. Appraisals today at (803) 739-2176. You may be able to get rid of your Private Mortgage Insurance payment.
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We begin with an inspection of the home.
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.
Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any shrubs and move any items that would get in our way while we measure the structure. On the inside, make sure the appraiser can get to items like furnaces and water heaters.
To help expedite our work as well as ensure a more accurate report, attempt if possible to have the following items:
Records on the latest purchase of the property in the last three years.
Information on any written private easements, such as a shared driveway with a neighbor.
Title policy that describes encroachments or easements.
Brag sheet that lists major home improvements and enhancements, the date of their installation and their cost (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .
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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."
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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 appraisal - 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.
The exception to this rule is when a home owner hires an appraiser directly.
In these cases, the appraiser may define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can do whatever they want with the appraisal.
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The answer to this is different depending upon the location of the home.
For example,
putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!
No matter where you go, however, renovating a kitchen is almost always a safe move.
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 were second, returning 85%.
Adding bedrooms and baths can also increase the value of your home (when done well) as long as your home doesn't then become overbuilt for your neighborhood in terms of size.
