Murphy Appraisal Group, LLC has answers to "Frequently Asked Questions"
What is an appraisal?
What is an appraisal?(Top) An appraisal is an evaluation allowing the appraiser to come to an opinion of value. There are three "common approaches to value" which helps the appraiser arrive at this opinion or estimate. One of them is the Cost Approach - which is how much it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. Another of the processes is the Sales Comparison Approach - which concerns making a comparison to other similar properties within a close proximity which have recently sold. The Sales Comparison Approach is normally the most definitive and clearest indicator of a liklely sales price for a residential property. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it deals with estimating what an investor would pay based on the capital produced by the property.
Describe what an appraiser does(Top) An appraiser provides a professional, unbiased opinion of market value, often in the context of a real estate purchase. Appraisers exhibit their investigation in appraisal reports.
What are the reasons I would request your services?(Top) There are a lot of reasons to get an appraisal from Murphy Appraisal Group, LLC with the most common reason being real estate and mortgage transactions. A few other reasons for getting an appraisal include:
What is the difference between an appraisal and a comparative market analysis (CMA)?(Top) To be blunt, it's like comparing broadband and dial-up. The CMA uses market trends to conduct most of their business. An appraisal relies on comparable sales that can be verified by public record. The appraisal report will also contain area and building costs. 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.
The credentials of the person creating the report is actually the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA's. A certified, Texas licensed professional who has formed a career on valuing properties in and around Harris County creates the appraisal. Further, the appraiser is an independent party, with no conditional interest in the property's value, unlike the agent, whose income is tied to the price of the home.
Upon completion of the report, what guarantee is there that the value indicated is veritable?(Top) In the documentation of an appraisal, each appraiser must make sure of the following:
Who hires Murphy Appraisal Group, LLC(Top) Mortgage lenders are an appraiser's most likely customer, requesting their services to ensure a home 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 Murphy Appraisal Group, LLC get the information used to estimate values in Harris County or other areas?(Top) One of the primary things an appraiser does is to collect data. Data can be categorized as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.
General data is gathered from a variety of sources. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. To verify actual sales prices, we research items in the assessor's office and other public documents. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood product.
And most importantly, the appraiser assembles general data from his or her past experience in doing assignments for other properties in the same market.
How can a licensed appraiser help me?(Top) An appraisal is a valuable tool anytime your home's value is relevant to some financial decision. For those selling a home, you'll want to figure out a 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. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from Murphy Appraisal Group, LLC is the best documentation to ensure assets are split up properly. Simply put, a home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making the right financial decisions.
My mortgage statement has an item on it for PMI? Can I get rid of that?(Top) PMI is short for for Private Mortgage Insurance. PMI guards the lender in the event a borrower is unable to pay on the loan and the market price of the property is less than the balance of 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.
How do I get ready for the appraiser?(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 condition of its features. 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 bushes and move any items that would make it difficult to measure the structure. On the inside, make sure the appraiser can get to appliances like furnaces and water heaters.
You can make things go faster and improve the quality of the appraisal report by having the following things on hand:
Define "Market Value"(Top) In real estate appraising, Market Value is commonly defined as:
Who actually owns the appraisal report?(Top) For mortgage transactions, the lender requests 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 included with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.
This rule doesn't apply when a home owner hires an appraiser directly. 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.
Which home renovations add the most to the price?(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 weren't far behind, yielding 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.