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FREQUENTLY ASKED QUESTIONS

HOW WE OPERATE

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The primary role of an appraiser is to deliver an impartial and expert assessment of market value, aiding in financial transactions. This evaluation is presented through a formal analysis detailed in a report.

As appraisers, we have numerous responsibilities, with our primary allegiance lying with our clients. Typically, in residential practice, the lender commissions the appraisal, thereby becoming the appraiser’s client. Appraisers are bound by rules and regulations that mandate confidentiality regarding many aspects of their work for their clients. Access to an appraisal report is typically granted through the lender. Additionally, appraisers are obligated to maintain numerical accuracy according to the parameters of the assignment, continuously strive to attain and uphold a high level of competency and education, and conduct themselves in a professional manner. Upholding high ethical standards is ingrained in our daily operations at MacDonnell Appraisals.

In most cases, appraisers are hired by lenders to assess the value of real estate involved in loan transactions. Additionally, they offer expert opinions in legal disputes, tax issues, and investment evaluations.

Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. However, licensing and certification is most often associated with many hours of coursework, tests and practical experience. Once an appraiser is licensed, he or she is required to take continuing education courses in order to keep the license current.

  • Collecting data is a fundamental task for appraisers, divided into two categories: Specific and General. Specific data pertains to details gathered directly from the property itself, including its location, condition, amenities, size, and other specific attributes during an inspection.

    On the other hand, General data is sourced from various outlets. Local Multiple Listing Services (MLS) offer information on recently sold properties that can serve as comparables. Tax records and public documents provide verification of actual sales prices within a market. Flood zone data is obtained from FEMA data outlets like Metro Appraisals’ InterFlood product. Additionally, appraisers rely on their own past experiences in creating appraisals for other properties in the same market to gather general data.

     
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The initial phase in most appraisals involves a home inspection. During this stage, the appraiser visits your home to measure its dimensions, assess the interior layout, verify the overall condition, and capture multiple photographs for inclusion in the report. To facilitate the process, ensure the appraiser has unobstructed access to the exterior by trimming bushes and removing any items hindering measurement. Inside, ensure easy access to items such as furnaces and water heaters.

Providing the following items, if available, can aid the appraiser in delivering a more accurate appraisal within a shorter timeframe:

  • A survey of the house and property.
  • A deed or title report displaying the legal description.
  • A recent tax bill.
  • A list of personal property to be conveyed with the house, if applicable.
  • A copy of the original plans.

QUESTIONS ON APPRAISALS

An appraisal entails an examination enabling the appraiser to form an opinion of value. This assessment is typically conducted through a structured process involving three primary “approaches to value”. The Cost Approach is one method employed by real estate appraisers to ascertain a property’s value, which entails determining the cost of improvements without considering physical depreciation, along with the land value. The Sales Comparison Approach involves identifying similar properties nearby and determining value by comparing them to the subject property. This approach is often the most accurate indicator of residential property value. Conversely, the Income Approach, although less commonly used in home appraisals, is utilized to assess a property’s value based on the income it generates, reflecting what an investor would be willing to pay based on the building’s potential earnings.

Following the inspection, the appraiser employs two or three approaches to determine the property’s value: comparative sales analysis, cost approach, and in the case of rental properties, an income approach.

There are numerous motives for seeking an appraisal from MacDonnell Appraisals, with typical reasons revolving around real estate and mortgage transactions. Additional rationales for ordering an appraisal report include:

  • Securing a loan.
  • Seeking to lower property tax liabilities.
  • Determining the replacement cost for Private Mortgage Insurance (PMI).
  • Challenging excessive property tax assessments.
  • Handling estate matters.
  • Gaining a competitive advantage in real estate purchases.
  • Establishing a reasonable sales price for property listings.
  • Protecting rights in condemnation cases.
  • Meeting requirements set by government entities like the IRS.
  • Preparing for involvement in civil litigation.

Whenever your home or any other real property’s value plays a pivotal role in a significant financial decision, an appraisal proves invaluable. Whether you’re selling your home and require assistance in setting an appropriate value, purchasing property to avoid overpaying, or navigating estate settlements or divorce proceedings to ensure equitable property division, an appraisal serves as a crucial tool. Given that a home often represents an individual’s most substantial financial asset, having an accurate understanding of its true value enables informed and prudent financial decision-making.

Appraisers do not conduct house inspections and are distinct from home inspectors. A home inspection aims to assess the entirety of a home’s structure, spanning from its foundation to the attic. Typically, a home inspector’s report encompasses an evaluation of various components including the heating and central air conditioning systems (where applicable), interior plumbing and electrical systems, roof, attic, insulation (if accessible), walls, ceilings, floors, windows, doors, foundation, basement, and visible structure.

The response to this query varies based on the home’s location, as different markets assign varying values to amenities. For instance, installing a central air conditioner in Houston, Texas, could significantly increase the property’s value, whereas the same addition in a home located in Buffalo, New York, may have minimal impact.

Typically, the highest return on investment for home renovations is achieved in the kitchen. According to a national survey, kitchen remodels yielded an average return of 88% of the investment. In practical terms, a $10,000 kitchen remodeling project would likely increase the home’s value by approximately $8,800. Bathrooms ranked second in terms of return, returning an average of 85%.