Hampton Roads Area, Virginia Home Appraisals

Buying a Hampton Roads Area home covers a lot of ground, including legal, financial and emotional considerations. A lack of education in the home buying process and the mistakes of others may lead to disaster.


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Hampton Roads Area Home Appraisals...What they are...

An appraisal is an un-biased, third-party estimate of the value of a parcel of property. All appraisals must be consistent with principles set by the Federal Reserve, however eventually all appraisals are a subjective examination of a property's existing market value. Absolute market value can be tough to ascertain in neighborhoods where values are unpredictable and properties widely vary.

The home appraiser uses market-based tools to develop an opinion of worth. This normally means market value (or the sum of money that a person would pay for it). There is always some disparity and each prospective buyer or seller and real estate industry professional conveys a distinctive mixture of ideas to the table. There are many considerations and tools that appraisers will utilize to determine the market value of a property.

The difference between appraisers and other industry professionals

Sellers and refinancing borrowers would like to receive the best price they can for their property. Buyers may have an open commitment to an agreed price because of their wish to purchase the property. Brokers and loan originators are paid commissions based upon the amount of the sale or loan. An appraiser, alternately is paid a flat fee, whether the deal is attained or not. Theoretically, he/she is free to provide an informed opinion of the value of the property.

What type of Hampton Roads Area real estate can be appraised?

Most commonly, appraisers will be asked to offer an examination of an existing home or property. The appraiser can also estimate the value of a home that is currently being built. The finished home is appraised using only the builder's plans and information that contains the characteristics of the site.

Non-residential property can be appraised using a variety of methods, including cash flows. This can also consist of a rating of predicted income and expenses to use as measurements of the net current worth of a non-residential property.

Tools commonly used by Hampton Roads Area appraisers

There are many distinctive tools and measurements that appraisers might use to provide an appraisal report. Among them are:

Completed area real estate interchanges. Data nowadays has become progressively more available through the Internet with the capability of searching for sales transactions throughout the US. There are a wide selection of resources that will provide the date, price range, type of property, grantor/grantee, address in addition to access to electronic deeds. Other details on a property can also be found at the assessor's office.

Economic values. The appraiser can gain access to and study employment and wages for states, including prices for various economic entities such as metals, major currency exchange rates, bond yields, stock averages, LEI, CPI and Core Rates.

Software. Many powerful software systems are also accessible to permit faster reporting and professional photography, topography and aerial maps.

The Appraisal Report

The appraisal report is a "snapshot" of the property and the neighborhood and generally provides a description of the neighborhood (price ranges, ages of homes, quality of access to schools, shopping and work). This generally will consist of the stability of the local economy and rank its desirability by comparing neighboring areas. The report will also mainly include the site description including its size and shape, zoning compliance and any easements or restrictions, all of which affect the property's utility. The availability of utilities, maintenance of streets are also included in this report. Any developments to the property or buildings are described in some detail such as the number of rooms, the quality and condition, the size of the home, and any special features. There usually are pictures and sketches on additional pages. A complete and final valuation will be provided stating which of the methods were used and an explanation as to why each approach was selected in addition to the importance of the method in determining market value. Three methods that are generally used are: Cost (replacement), Sales Comparison (what has been paid for similar properties) and Income (when it's rental or non-residential property). The appraisal analyzes property rights including improvements and expresses the sum as a dollar value in the current market.

Accurate appraisals are to your advantage, not because they have different values than poorly written ones but because they move efficiently through the bank's underwriters. Precise appraisals are reader-friendly, understandable, and clearly show the relationship between local market conditions, the data used, and the ultimate value.

Appraisals can be designed for:

Mortgages
The most universal use is when a buyer applies for a mortgage to assist with the purchase, or when a homeowner refinances or wants a home equity loan. The bank evaluates the application, checks the borrower's credit report, and ultimately orders an appraisal on the home that is used to secure repayment of the loan.

Divorces
Home value can be of significant importance particularly when one spouse is set to keep the home and buy the other's share out. The party receiving cash for giving up ownership will benefit from a high value, while the party retaining the property benefits from a low estimate. Often times, both sides will hire their own appraiser. A skillful appraiser can prepare a report that is more convincing to the court and less vulnerable to skewing from a "biased" report that unfairly favors 1 side at the expense of the other.

Estate Settlement and the Internal Revenue Service
When an appraisal is needed in the case of an estate settlement with the IRS, a lawyer can select the right appraiser and define the appraiser's assignment in a more precise way.

Buyers Offer
An appraiser can advise Buyers of a realistic value for the property on which you can base an offer.

Choosing an appraiser who is right for you

One important thing to consider when hiring an expert home appraiser is whether they are knowledgeable in property and home values for the area or region in which the property resides. This is especially important for atypical properties or difficult appraisals.

Another consideration is whether the home appraisal company provides professional service with reasonable appraisal fees and turnaround times. Residential fees can vary greatly depending on the region, property and time estimated to complete the appraisal report. The more complex the house appraisal report, the higher the fees. And finally, does the company doing your house appraisal have the most apt data sources for the area and property type to be appraised?

Find out the length of time the appraisal company has been in business? They should have an established business long enough to have seen the market gyrations that have provided some understanding of market volatility.

Find out how an appraiser will determine likeness among competing neighborhoods. A good appraiser will consist of sophisticated criteria such as density of development, price range, incomes, or even census tracts.

Question how many appraisals are conducted on a weekly basis by the appraiser. The value here is to ascertain whether a thoughtful, detailed, analytical appraisal will be created.

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