An appraisal provides you with useful information about the property which is identified in several ways including the address, the tax key number and the legal description. Specific details should describe the location, size, style, age and condition, as well as what special characteristics it has or what adverse influences it may have such as proximity to a busy street or industrial enterprise.
An appraisal must be an objective, impartial, unbiased and independent assessment of the value of the property. (Keep in mind that cost does not necessarily equal value.) Included in the appraisal should be a written report (typically on one of the approved form types) maps, photos and may include other documents such as a sales contract or part thereof and or a survey of the lot.
When you borrow money to buy or refinance a home, your lender may order a new appraisal and may require you to pay for it. Your lender may also use other ways to check the value of the home. If you have an appraisal of your own home or a home that you are purchasing, you have a right to receive a copy of the appraisal report no later than three days before closing.
- Tax appeal
- Removal of Private Mortgage Insurance (PMI)
- Settlement of an Estate (Probate)
Just to name a few, and there are certainly others.
- Condition – recent updates, maintenance etc.
- Location – view, proximity to schools, parks, restaurants, shops etc. as well as access major transportation routes
- Amenities – porch, patio, deck, fireplace, hot tub – for example
- Quality of construction
- The age and condition of the roof, windows, mechanical systems and recent updates/improvement
- Market conditions
- Curb appeal and landscaping
2.) The second approach to value is the Cost Approach which is most typically used for new construction properties or properties which have been recently fully renovated and may be like new. Most often the appraiser will use Plans and Specifications for the subject property in addition to the value of the lot, builder carrying costs, overhead and profit. The Marshall & Swift cost estimator guide may also be employed.
3.) The third approach to value is the Income Approach. This approach is used when the property is an investment property which has the potential to derive income from rent. It may be a single family home or may be a multi-unit property. The appraiser is provided with actual rental data from the property owner or management company and then compared with other, similar rental units in the market area. Several additional sections are added to the typical appraisal report which calculate items such as vacancy loss, management fees and anticipated repairs or improvements. The appraisal of income producing properties most often combines the use of the sales comparison and the income approach to value.
- Day 1: Data Validation
- Day 2-3: Property Visit
- Day 4-5: The report is written & data verifed
- Day 6 Completed report is submitted to the client
Rush orders upon request for an additional fee
The main differences are that an appraisal deals with the value of a home, and the inspection deals with the condition of the home.
Most often, the goal of an appraisal is to deliver an impartial, unbiased, professional opinion of the fair market value of a property.
A Home Inspection is a detailed and more thorough inspection into the condition of the home. A licensed home inspector will spend several hours analyzing the condition, both visually and by testing major components and mechanical systems. Following the home inspection, recommendations are made through a detailed report with photos on items that require repair or may be nearing the end of their useful life.
Both reports rely primarily on the direct sales comparison approach to value.
Short form reports may be better suited for tax appeal, gift and estate tax purposes, helping a seller price a property, assisting a buyer in determining what price to offer or pay for a property or an uncontested divorce.
Some mortgage companies require at least 2 years. After this waiting period you can make the request. Call your mortgage company customer service and ask for full instructions for the PMI removal. Most mortgage companies want to know that you have at least 20% equity in the property. In order to determine the value most mortgage companies will require a fee based appraisal from a State Licensed or Certified Appraiser.
To see the specific requirements for any state use this link: www.appraisalfoundation.org/imis/TAF/About_Us/