REVARI (Real Estate Valuation and Research Inc.) has answers to "Frequently Asked Questions"
REVARI (Real Estate Valuation and Research Inc.) is always prepared to reply to any inquiries you might have about appraisals in Claremont and Sullivan County.
Contact us today to see how we can help solve your specific valuation problems.
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The appraisal process is an evaluation that generates an opinion of value.
The appraiser will typically use a few "approaches," typically three, to arrive at the estimation of market value.
The Cost Approach is one of the approaches that real estate appraisers use to find the value of a home; it involves finding what the improvements would cost without physical degradation, plus the land value.
Another of the methods is the Sales Comparison Approach - which involves discovering a comparable analysis to other similar properties within a close proximity which have recently sold.
Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a house.
The Income Approach is primarily used for finding the market value of income-producing properties based on what an investor would pay based on the amount of income a property would bring in.
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An appraiser provides a fair and credible determination of market value, to be used in making real estate transactions.
Appraisers demonstrate their expert findings in appraisal reports.
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There are many reasons to purchase an appraisal from REVARI (Real Estate Valuation and Research Inc.) with the usual reason being real estate and mortgage transactions.
Some other reasons for ordering an appraisal report include:
To get a loan.
If you would like to reduce your property tax obligations.
To show a homeowner has 30% equity and remove insurance.
To contest high property taxes.
To settle an estate.
To offer you a leg-up when purchasing real estate.
To determine the most probable price when selling your home.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Government agencies such as the IRS need an appraisal on every property.
It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.
Click here for a more detailed explanation of the process of getting an appraisal.
The appraiser is not a home inspector nor does he/she do a full home inspection.
An inspection is a third-party evaluation of the livable structure and mechanical systems of a house, from the roof to the bottom.
The standard home inspector's report will contain an evaluation of the integrity of the property's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.
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To be blunt, it's like comparing Shakespeare to reality TV.
The CMA uses market trends to conduct most of their business.
An appraisal utilizes comparable sales that can be validated by records.
The appraisal report will also contain neighborhood and construction values.
The CMA will provide a non-specific figure.
Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.
The credentials of the person behind the report is hands down 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 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.
Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat fee for assignments, regardless of their outcome.
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:
Who engaged the appraiser and other intended users.
How the appraisal is supposed to be used.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraiser's opinions and conclusions.(Sometimes this is in the past or maybe the future for new construction!)
Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic factors, the property rights valued, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible factors.
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.
What was involved in the process of completing the appraisal.
For a more comprehensive view of the work that goes into an appraisal report click here: Sample Appraisal Report
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In communicating an appraisal report, each appraiser must ensure the following:
That the information analysis implemented in the appraisal was proper.
Whether individually or collectively, there were no substantial errors contained in the appraisal, nor any relevant details left out.
That appraisal services were not rendered in a careless or negligent manner.
That a credible, supportable appraisal report was imparted.
There are rigorous classroom and experience requirements that must be adhered to in order to achieve the status of "licensed appraiser" in New Hampshire.
In addition, appraisers must follow a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for developing an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).
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Mortgage lenders are an appraiser's most likely customer, needing their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan.
Attorneys and CPAs also hire appraisers for asset division and estate settlements.
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One of the main things an appraiser does is to collect property data.
Data can be described as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.
General data is gathered from a numerous places.
Local Multiple Listing Services (MLS) provide information on recently sold homes that might be used as comparables.
To verify actual sales prices, we use tax records and other public documents.
Flood zone data is retrieved from FEMA data outlets, 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.
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If you're involved in any kind of financial decision and the value of your home matters, you'll want a full appraisal.
When selling your house, an appraisal will help you determine the most appropriate price.
If you're buying, it makes sure you don't overpay.
For people settling an estate or divorce, an appraisal from REVARI (Real Estate Valuation and Research Inc.) is the best way to ensure assets are divided properly.
A house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.
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PMI is short for for Private Mortgage Insurance.
It protects the lender in the event a borrower defaults on the loan and the value of the property is lower than what the borrower still owes on the loan.
Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.
The money you keep from getting rid of your PMI will make up for the price of the appraisal in a matter of months. REVARI (Real Estate Valuation and Research Inc.) has years of experience with value trends in Claremont and Sullivan County. Contact us today.
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We start 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 status of its amenities.
On the home's interior, make sure it is clutter free and that we can get to 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 speed things along as well as ensure a more accurate report, attempt if possible to have the following items:
Information on the latest purchase of the property in the last three years.
List of personal property to be sold with the home.
Title policy that describes encroachments or easements.
A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
Find copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
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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."
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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 certainly entitled to a copy of the appraisal - it's usually included 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 noted otherwise, the home owner can do whatever they want with the appraisal.
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A home's location - what city it is in and even what part of that city - is key to this popular question.
For example,
putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!
As a rule, the best ROI 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 are right up there with kitchens, returning 85%.
On the contrary, something that may not add value would be painting just for the sake of redecorating.
REVARI (Real Estate Valuation and Research Inc.) PO Box 342 Claremont, NH 03743-0342
