Sielken Davis LLC has answers to "Frequently Asked Questions"
What is an appraisal?
What is an appraisal?(Top) The appraisal process is an estimation that generates an opinion of value. The appraiser must use a several "approaches," typically three, to conclude the estimation of market value. One of the methods is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value. The Sales Comparison Approach involves finding similar houses in close proximity and discerning value based on making a comparison of those properties to the home being investigated. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a home. The third approach is the Income Approach, which is the best method in appraising income producing properties - it involves estimating what an investor would pay based on the money produced by the property.
What does an appraiser do?(Top) An appraiser forumlates a professional, unbiased assessment of market value, in the support of real estate transactions. Appraisers summarize their expert investigation in appraisal reports.
Why would I request services from Sielken Davis LLC?(Top) There are many reasons to get an appraisal with the most common reason being real estate and mortgage transactions. Some other reasons for ordering an appraisal include:
What is the difference between an appraisal and a comparative market analysis (CMA)?(Top) Simply, they share nothing in common. The CMA depends on indistinct local market trends. Appraisals use similar sales which are valid resources. The appraisal report will also include location and construction values. All a CMA does is generate a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.
But the biggest difference is who's doing the report. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Moreover, the appraiser is an independent party, with no conditional interest in the value of a home, unlike the real estate agent, who gets a commission based upon the value of the home.
Upon completion of the report, how can I have certainty that the value conclusion is veritable?(Top) In the documentation of an appraisal, each appraiser must make sure of the following:
Who are an appraiser's customers?(Top) Mortgage lenders are an appraiser's most likely client, requesting their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.
Where does Sielken Davis LLC get the information used to estimate values in Nassau County or other areas?(Top) Compiling data is one of the main things an appraiser engages in. Data can be divided into Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.
General data is gathered from a many places. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. To double-check actual sales prices, we use tax records and other public documents. 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 product.
And most importantly, the appraiser gathers general data from his or her past experience in creating appraisals for other houses in the same market.
What can a full appraisal do for me?(Top) An appraisal is a valuable tool whenever the value of your home is relevant to a financial decision. If you're selling your home, an appraisal helps you set a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from Sielken Davis LLC is the best way to ensure assets are divided properly. Simply put, a home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.
My mortgage statement has an item on it for PMI? Can I get rid of that?(Top) PMI stands for Private Mortgage Insurance. PMI takes care of the lender if a borrower doesn't pay on the loan and the market price of the house is less than the balance of the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.
Should I do anything in advance of the appraisal appointment(Top) The first step in most appraisals is the property 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. Inside, make sure it is clutter free and that we can find our way to things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of exterior walls.
To help speed things along as well as ensure a more accurate report, try if possible to have the following items:
How does an appraiser define "Market Value"?(Top) In real estate appraising, Market Value is commonly defined as:
Does the appraisal belong to the bank or the consumer?(Top) 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.
The exception to this rule is 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 stated otherwise, the home owner can use the appraisal for any purpose.
Which home renovations add the most to the price?(Top) This really depends on where the home is. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!
As a rule, the most value returned from renovating a home comes in the kitchen. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms were second, returning 85%. Adding bedrooms and baths can also help the value of your home (when done well) as long as your home doesn't then become atypical for your neighborhood in terms of size.