H. Bruce Jones has answers to "Frequently Asked Questions"
Describe an appraisal
Describe an appraisal(Return to top) An appraisal report is a thought process allowing the appraiser to come to an opinion of value. The appraiser will use a several "approaches," typically three, to arrive at the estimation of market value. One of the methods in use is the Cost Approach, which evaluates what it would cost to replace the improvements to the home, less the depreciation and physical dilapidation, plus the land value. The Sales Comparison Approach involves searching for similar houses nearby and discovering the value based on comparing those houses to the home being investigated. The Sales Comparison Approach is normally the most accurate and clearest indicator of value for a residence. The Income Approach is mainly used for determining the market value of income-producing properties based on what an investor would pay based on the amount of income a property produce.
What does an appraiser do?(Return to top) An appraiser generates a professional, unbiased determination of market value, in the support of real property transactions. Appraisers summarize their professional findings in appraisal reports.
What would cause me to request services from H. Bruce Jones?(Return to top) There are a lot of reasons to obtain an appraisal from H. Bruce Jones with the most common reason being real estate and mortgage transactions. A few other reasons for purchasing an appraisal include:
Is an appraisal the same as a home inspection? (Return to top)Home inspectors do not produce an opinion of value and are not appraisers. A third-party home inspector will judge the structure of the property, from the roof to the bottom. The stereotypical house inspector's report will contain an evaluation of the condition of the house's heating systems, 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)?(Return to top) Simply put, it's apples and oranges. The CMA utilizes market trends to generate most of their business. An appraisal utilizes comparable sales that can be verified by public record. Also, the appraisal looks at other factors like condition, neighborhood and construction prices. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.
The credentials of the person behind the report is actually the most significant difference between a CMA and an appraisal. A CMA is created by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. 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 assignments, regardless of their outcome.
What can I expect to see in my appraisal report? (Return to top)The main point 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:
Once the report has been delivered, what guarantee is there that the value conclusion is legitimate?(Return to top) In the documentation of an appraisal, each appraiser must ensure the following:
Who hires H. Bruce Jones(Return to top) Typically, appraisers are hired by mortgage lenders to render a value opinion on a home involved in a loan transaction. Attorneys and CPAs also hire appraisers for divorce and estate settlements.
Where does an appraiser get the information used to estimate values in Cleveland County or other areas?(Return to top) Compiling information is one of the primary activities of an appraiser. Data can be divided into Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.
General data is collected from a variety of sources. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. To double-check actual sales prices, we look at items in the assessor's office and other public documents that are usually online nowadays. 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 last but not least, the appraiser gathers general data from his or her past experience in doing assignments for other houses in the same market.
Why do I need a professional appraisal?(Return to top) If you're involved in some sort of financial decision and the value of your home is relevant, you'll want to hire a licensed appraiser. When selling your home, an appraisal assists you in setting 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. Without knowing its real value, wise financial decisions are impossible.
What exactly is PMI and how can I get rid of it?(Return to top) PMI is short for for Private Mortgage Insurance. This supplementary policy covers the lender if a borrower defaults on the loan and the market price of the home is lower than the balance of the loan. 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.
Should I do anything in advance of the appraisal inspection(Return to top) We begin with an inspection of the property. During this process, we will come to your home and measure it, determine the layout of the rooms inside, confirm all aspects of the home's general condition, and take several photos of your house for inclusion in the report. Inside, pick up any clutter and make sure we can access things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of outside walls.
To help expedite our work plus ensure a more accurate report, try if possible to have the following items:
What is "Market Value?"(Return to top) In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:
Does the appraisal belong to the bank or the consumer?(Return to top) For mortgage transactions, the lender orders the appraisal, either directly or through a third party. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. 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 stipulate how the appraisal can be used; 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.
How can I get the most ROI out of home improvements?(Return to top) A home's location - what city it is in and even what part of that city - is key to this popular question. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes
As a rule, the best ROI 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 as long as your home doesn't then become atypical for your neighborhood in terms of size.