RICHARD GRECO APPRAISALS has answers to "Frequently Asked Questions"
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RICHARD GRECO APPRAISALS is always ready to reply to any concerns you might have about appraisals in Bronx County.
Contact us today to learn how we can help solve your specific valuation problems.
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Define the term "Appraisal"
Describe what an appraiser does
Why would someone request services from RICHARD GRECO APPRAISALS?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What does the appraisal report contain?
Upon completion of the report, how can I have assurance that the value conclusion is legitimate?
What goes into an appraiser's certification?
Who do appraisers work for?
Where does an appraiser get the information used to estimate values in Bronx County or other areas?
How can a licensed appraiser help me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal appointment
How does an appraiser define "Market Value"?
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?
Define the term "Appraisal" (See list of FAQ's)
An appraisal is an estimation leading to an opinion of value.
There are three "common approaches to value" which helps the appraiser come to this opinion or valuation.
The Cost Approach is one of the processes that real estate appraisers use to find value; it involves finding what the improvements would cost without physical depreciation, plus the land value.
Easily the most common approach in finding the value of a home is the Sales Comparison Approach which concerns making a comparison to similar houses nearby.
The Sales Comparison Approach is commonly the most definitive and best indicator of value for a residential property.
One of the least common approaches in appraising residential properties is the Income Approach, which is generally used to figure the market value of a property based on what an investor would pay based on the income produced by the property.
Describe what an appraiser does (See list of FAQ's)
An appraiser provides an objective and well supported assessment of market value, to be used in making real estate transactions.
Appraisers reveal the details of their expert investigation in appraisal reports.
Why would someone request services from RICHARD GRECO APPRAISALS? (See list of FAQ's)
There are many reasons to order an appraisal from RICHARD GRECO APPRAISALS with the usual reason being real estate and mortgage transactions.
Other reasons for obtaining an appraisal include:
- To receive a loan.
- If you would like to reduce your property tax burden.
- To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
- To contest improperly assessed property taxes.
- To settle an estate.
- To provide you an edge when purchasing real estate.
- To determine the most probable price when putting your home on the market.
- To ensure parties are provided just compensation in eminient domain cases.
- Because an official agency such as the IRS requires it.
- It's possible you could be involved in a lawsuit - an appraisal will definitely help.
If you need more information regarding the appraisal process, please click here.
Home inspectors do not generate an opinion of value and are not appraisers.
A third-party home inspector will inspect the structure of the house, from the top to the bottom.
Commonly, a home inspection report will explain the amenities and the requirements of the property: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.
My agent performed a CMA for me. Is that the same as an appraisal? (See list of FAQ's)
To be blunt, it's night and day.
The CMA utilizes market trends to generate most of their business.
An appraisal is based on comparable sales that can be verified by public record.
Location and construction prices are also precedent in an appraisal.
The CMA will provide a non-specific figure.
Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
But the biggest difference is the person behind the report.
Real estate agents, who may not have a true grasp of valuation methods or the entire market, create CMA's.
A certified, state licensed professional who has formed their livelihood on valuing homes in and around Bronx County is behind the appraisal.
Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a previously agreed upon fee for assignments, regardless of their outcome.
Every report should indicate a supported value opinion and should document the following:
- Who engaged the appraiser and whose purposes the appraisal is to serve.
- How the appraisal is supposed to be used.
- The appraisal's purpose.
- The type of value contained and a definition of that value.
- The effective date of the appraisal.(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 attributes, the real property interest in question, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible factors.
- All known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
- Division of interest, such as fractional interest, physical segment and partial holding.
- The scope of work used to complete the appraisal.
For a more detailed view of what goes into an appraisal report click here: Sample Appraisal Report
Upon completion of the report, how can I have assurance that the value conclusion is legitimate? (See list of FAQ's)
In communicating an appraisal report, each appraiser must make sure of the following:
- That the information analysis implemented in the appraisal was suitable.
- Whether individually or collectively, there were no substantial errors contained in the appraisal, nor any relevant details left out.
- That appraisal services were not conducted in a careless or negligent fashion.
- The final appraisal report was understandable, legitimate and defensible.
To become a state licensed appraiser, there are education requirements as well as real world experience that must be attained.
In addition, appraisers must obey a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for developing an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).
(See list of FAQ's)
Licensing and certification is achieved through coursework, tests and experience working under a supervisory appraiser.
Once an appraiser is licensed, he or she is required to complete continuing education courses so the license remains up to date. To see the specific requirements for any state click here.
Who do appraisers work for? (See list of FAQ's)
Typically, appraisers are employed by mortgage lenders to render a value opinion on a home involved in a loan transaction.
Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.
Where does an appraiser get the information used to estimate values in Bronx County or other areas? (See list of FAQ's)
One of the primary things an appraiser does is to collect property data.
Data can be described as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.
General data is collected from a variety of places.
Local Multiple Listing Services (MLS) have information on recently sold homes that could be used as comparables.
To verify actual sales prices, we use tax records and other public documents.
Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood system.
And most importantly, the appraiser gathers general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.
How can a licensed appraiser help me? (See list of FAQ's)
Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps.
When selling your home, an appraisal helps you set a price that maximizes profit and reduces time on the market.
When buying, you can avoid overpaying by commissioning an independent appraisal.
For those settling an estate or divorce, an appraisal from RICHARD GRECO APPRAISALS is the best documentation to ensure assets are split up evenly.
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? (See list of FAQ's)
PMI is the common abbreviation for for Private Mortgage Insurance.
It protects the lender in the event a borrower doesn't pay 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.
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Has your home value appreciated since you first purchased? Call RICHARD GRECO APPRAISALS today at (718) 518-8588. You may be able to get rid of your Private Mortgage Insurance premium.
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Should I do anything in advance of the appraisal appointment (See list of FAQ's)
We start with an inspection of the home.
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.
Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any shrubs and relocate any items that would make it difficult to measure the structure. Indoors, make sure the appraiser can easily access items like furnaces and water heaters.
You can make our visit go faster and improve the accuracy of the appraisal report by having the following things on hand:
- A survey or plot map of the property and building (if available).
- List of personal property to be sold with the home.
- Title policy that lists encroachments or easements.
- A list of any major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of central air conditioning 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.
How does an appraiser define "Market Value"? (See list of FAQ's)
In real estate appraising, Market Value (as opposed to Fair 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."
Who has rights to the appraisal report? (See list of FAQ's)
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 certainly 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 hires an appraiser directly.
In these situations, the appraiser may stipulate the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can use the appraisal for any purpose.
How can I get the most ROI out of home improvements? (See list of FAQ's)
Like all things real estate, this is dependent on a home's location.
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.
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 were second, yielding 85%.
On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.
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