Don Leger Appraisal Service has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(Go to list of questions) An appraiser performs an evaluation that generates an opinion of value. This opinion or estimate is arrived at by a formal process that usually utilizes the three main "common approaches to value". The Cost Approach is one of the methods that appraisers use to find the value of a property; it involves finding what the improvements would cost minus physical degradation, adding the land value. Another of the methods is the Sales Comparison Approach - which concerns making a comparison to other similar properties within a close vicinity which have recently sold. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a home. One of the least common approaches in appraising residential properties is the Income Approach, which is generally used to find the value of a property based on what an investor would pay based on the income produced by the property.
What does an appraiser do?(Go to list of questions) An appraiser offers an unprejudiced and well substantiated determination of market value, to be used in making real estate transactions. Appraisers show their professional analysis in appraisal reports.
What are the reasons someone would require your services?(Go to list of questions) There are a lot of reasons to order an appraisal from Don Leger Appraisal Service with the most common reason being real estate and mortgage transactions. A few other reasons for purchasing an report include:
How is an appraisal different than a home inspection? (Go to list of questions)Home inspectors do not come to an opinion of value and do not use the same forms as appraisers. A third-party home inspector will evaluate the structure of the house, from the roof to the foundation. The archetypal house inspector's report will include an evaluation of the integrity of the home's heating system, 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.
What is the difference between an appraisal and a comparative market analysis (CMA)?(Go to list of questions) To be blunt, it's like comparing opera to country. What the CMA depends on are superficial trends. The appraisal relies on similar proven comparable sales. The appraisal report will also include neighborhood and construction costs. All a CMA does is generate a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
The person behind the report is actually the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, generate CMA's. A certified, Louisiana licensed professional who has formed their livelihood on valuing real estate in and around Saint Landry County is behind the appraisal. Moreover, the appraiser is an unbiased voice, with no vested interest in the property's value, unlike the agent, whose income is tied to the value of the home.
What's in an appraisal report? (Go to list of questions)The main purpose of an appraisal report is to give a value opinion, and depending on the scope of the report, you'll usually see the following:
Once the assignment has been delivered, what guarantee is there that the final number is valid?(Go to list of questions) In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
Who employs appraisers?(Go to list of questions) Commonly, appraisers are employed by lenders to estimate the value of a home involved in a loan transaction. Attorneys and CPAs also hire appraisers for asset division and estate settlements.
Where does an appraiser get the information used to estimate values in Saint Landry County or other areas?(Go to list of questions) Collecting information is one of the main things an appraiser performs. Data can be described as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.
General data is gathered from a numerous places. To find out about recently sold homes to be used as "comps", we often go to the local Multiple Listing Service. To double-check actual sales prices, we look at items in the assessor's office and other public documents that are usually online nowadays. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood product.
And last but not least, the appraiser assimilates general data from his or her collective knowledge gained from doing assignments for other properties in the same market.
What can a full appraisal do for me?(Go to list of questions) If you're involved in some sort of financial decision and the value of your home is relevant, you'll want a full appraisal. If you're selling your home, an appraisal will help you determine the most appropriate price. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A house is often the single, largest financial asset anybody owns. Knowing its true value means you can make the right financial decisions.
What exactly is PMI and how can I get rid of it?(Go to list of questions) PMI is an acronym for Private Mortgage Insurance. This added plan takes care of the lender if a borrower doesn't pay on the loan and the value of the property 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.
How do I get ready for the appraiser?(Go to list of questions) The first step in most appraisals is the home 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. The best thing you can do to help is make sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any bushes and relocate any items that would get in our way while we measure the structure. Indoors, make sure the appraiser can easily access items like furnaces and water heaters.
You can make our visit go faster and improve the quality of the appraisal report by having the following things on hand:
Define "Market Value"(Go to list of questions) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Who has rights to the appraisal report?(Go to list of questions) In most real estate transactions, the appraisal is ordered by the lender. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is entitled to a copy of the report - it's usually bundled 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 define the purpose of the appraisal; 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.
Are some home improvements more worthwhile than others?(Go to list of questions) This really depends on where the home is. For example, 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
As a rule, the most value returned from renovating a home comes in the kitchen. 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 are right up there with kitchens, returning 85%. Adding bedrooms and baths can also boost the value of your home (when done well) as long as your home doesn't then become an oddball for your neighborhood in terms of size.