Autana Group, Inc. has answers to "Frequently Asked Questions"
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Autana Group, Inc. is eager to elaborate on any concerns you might have about appraisals in Coral Springs and Broward County.
Don't hesitate to contact us today.
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What is an appraisal?
Describe what an appraiser does
What are the reasons I would require services from Autana Group, Inc.?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What can I expect to see in my appraisal report?
Upon completion of the appraisal, how can I have certainty that the value conclusion is accurate?
What goes into an appraiser's certification?
Who do appraisers work for?
Where does an appraiser get the information used to estimate values in Broward County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal appointment
Define "Market Value"
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?
What is an appraisal? (List of questions)
An appraisal is an investigation allowing the appraiser to come to an opinion of value.
The appraiser will typically use a several "approaches," typically three, to arrive at the estimation of market value.
One of the processes in use is the Cost Approach, which finds what it would cost to replace the improvements to the house, minus age and physical deterioration, plus the land value.
The Sales Comparison Approach involves searching for similar homes in close proximity and discovering the 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 clearest indicator of value for a home.
One of the least common approaches in appraising homes is the Income Approach, which is commonly used to figure the value of a property based on what an investor would pay based on the income produced by the property.
Describe what an appraiser does (List of questions)
An appraiser forumlates an unprejudiced and well supported determination of market value, in the support of real estate exchanges.
Appraisers reveal the details of their professional findings in appraisal reports.
What are the reasons I would require services from Autana Group, Inc.? (List of questions)
There are many reasons to get an appraisal with the usual reason being real estate and mortgage transactions.
Some other reasons for purchasing an appraisal report include:
- If you are applying for a loan.
- To reduce your tax burden.
- To help a homeowner realize if they owe less than 80% of their home's value and remove Primary Mortgage Insurance.
- To contest improperly assessed property taxes.
- To deal with an estate.
- To offer you a leg-up when purchasing a home.
- To determine an honest price when putting your home on the market.
- To ensure parties are provided just compensation in eminient domain cases.
- Government agencies such as the IRS need an appraisal on every home.
- If you are ever involved in a civil case.
Click here for a more extensive explanation of the process about getting an appraisal.
The appraiser is not a home inspector and does not do a complete home inspection.
A third-party home inspector will judge the structure of the house, from the roof to the foundation.
For the most part, a home inspection report will discuss the amenities and the requirements of the house: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.
My agent performed a CMA for me. Is that the same as an appraisal? (List of questions)
Simply put, it's like comparing broadband and dial-up.
The CMA uses market trends to create most of their business.
Appraisals use comparable sales which are verifiable resources.
In addition, the appraisal looks at other factors like condition, neighborhood and building costs.
A CMA delivers a "ball park figure."
An appraisal delivers a defensible and carefully documented opinion of value.
Who's creating the report is actually the biggest difference between a CMA and an appraisal.
Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation.
A certified, state licensed professional who has formed a career on valuing homes in and around Broward County creates the appraisal.
Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a flat fee for work they perform, regardless of their value conclusion.
The main purpose of an appraisal report is to let the reader know the value of the real estate in question, and depending on the scope of the report, you'll usually see the following:
- The client and other intended users.
- The intended use of the report.
- The reason for the appraisal.
- The type of value contained and a definition of the value reported.
- The effective date of the appraisal.
- Relevant property attributes, including: location, physical description, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible considerations.
- Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and other items of a similar nature.
- Division of interest, such as fractional interest, physical segment and partial holding.
- The scope of work used when completing the appraisal.
For a more comprehensive look at the work that goes into an appraisal report click here: Sample Appraisal Report
Upon completion of the appraisal, how can I have certainty that the value conclusion is accurate? (List of questions)
In communicating an appraisal report, each appraiser must ensure the following:
- That the information analysis utilized in the appraisal was proper.
- Whether individually or collectively, there were no major errors contained in the appraisal, nor any material details left out.
- That appraisal services were provided in a careful and cognizant fashion.
- That a trustworthy, substantiated appraisal report was conferred.
There are intense classroom and real world experience requirements that must be adhered to in order to become a licensed appraiser in Florida.
In addition, appraisers must follow a strict industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for developing an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).
(List of questions)
Licensing and certification requires coursework, tests and real world experience.
Once an appraiser is licensed, he or she is required to engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.
Who do appraisers work for? (List of questions)
Mortgage lenders are an appraiser's typical client, using their services to ensure a home involved in a mortgage transaction is enough to cover a loan balance in the case of default.
Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.
Where does an appraiser get the information used to estimate values in Broward County or other areas? (List of questions)
One of the primary things an appraiser does is to gather property data.
Data can be classified 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 variety of places.
Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables.
Tax records and other public documents reveal actual sales prices in a market.
Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood product.
And last but not least, the appraiser gathers general data from his or her past experience in creating appraisals for other houses in the same market.
Why do I need a professional appraisal? (List of questions)
If you're making some sort of financial decision and the value of your home is relevant, you'll want to hire a licensed appraiser.
For those selling a home, you'll want to figure out the price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that.
When buying, you can avoid overpaying by getting an independent appraisal.
For those settling an estate or divorce, an appraisal from Autana Group, Inc. is the best documentation to ensure assets are divided properly.
A home is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.
What exactly is PMI and how can I get rid of it? (List of questions)
PMI is short for for Private Mortgage Insurance.
PMI covers the lender in case a borrower is unable to pay on the loan and the market price of the house is lower than the loan balance.
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.
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The money you keep from getting rid of the PMI required when you got your mortgage will make up for the price of the appraisal in a matter of months. Nobody is more qualified than Autana Group, Inc. when it comes to analyzing real estate appreciation in Coral Springs and Broward County. Contact us today.
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Should I do anything in advance of the appraisal appointment (List of questions)
We begin with an inspection of the home.
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 amenities.
The best thing you can do to help is make 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.
You can make things go faster and improve the accuracy of the appraisal report by having the following things on hand:
- A survey or plot map of the property and building (if readily available).
- Written property agreements, such as a maintenance easement for a shared driveway.
- A bill for your most recent real estate taxes which should also contain a legal description of the property.
- Brag sheet that lists major home improvements and upgrades, 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 copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
Define "Market Value" (List of questions)
In real estate appraising, 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."
Who has rights to the appraisal report? (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 appraisal - 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.
This rule doesn't apply when a home owner engages an appraiser directly.
In these scenarios, the appraiser may state the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can do whatever they want with the appraisal.
How can I get the most ROI out of home improvements? (List of questions)
This really depends on where the home is.
For example,
if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.
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 weren't far behind, yielding 85%.
On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.
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