Matsunami Appraisals, Inc. has answers to "Frequently Asked Questions"
 |
 |
 |
Matsunami Appraisals, Inc. is more than happy to elaborate on any inquiries you might have about appraisals in Honolulu County.
Feel free to contact us today.
|
|
 |
Define the term "Appraisal"
Describe what an appraiser does
Why would a person need a real estate appraisal?
Is an appraisal the same as a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
Upon completion of the appraisal, how can I have assurance that the value indicated is veritable?
What does it mean for an appraiser to be licensed?
Who are an appraiser's customers?
Where does Matsunami Appraisals, Inc. get the data used to estimate values in Honolulu County or other areas?
Why do I need a professional appraisal?
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 inspection
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?
Define the term "Appraisal" (Back to top)
An appraisal report is an inspection that concludes with an opinion of value.
There are three "common approaches to value" which assists the appraiser arrive at this opinion or valuation.
The Cost Approach is one of the processes that real estate appraisers use to find value; it involves discerning what the improvements would cost less physical degradation, plus the land value.
Another of the approaches is the Sales Comparison Approach - which deals with making a comparable analysis to other similar nearby properties which have recently sold.
The Sales Comparison Approach is commonly the most definitive and best indicator of value for a residential property.
The third approach is the Income Approach, which is the most important method in appraising income producing properties - it deals with estimating what an investor would pay based on the income produced by the property.
Describe what an appraiser does (Back to top)
An appraiser forumlates a professional, unbiased determination of market value, often in the context of a real estate exchange.
Appraisers illustate their investigation in appraisal reports.
Why would a person need a real estate appraisal? (Back to top)
There are many reasons to purchase an appraisal with the most common reason being real estate and mortgage transactions.
Other reasons for purchasing an report include:
- If you are applying for a loan.
- To reduce your property taxes.
- To show a homeowner has 30% equity and remove PMI.
- To fight inflated property taxes.
- To handle an estate.
- To offer you a negotiating tool when purchasing a home.
- To determine the most probable sales price when selling your home.
- To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
- Because a government agency such as the IRS requires it.
- If you are ever involved in a civil case.
If you need more information regarding the appraisal process, please click here.
Appraisers do not do provide house inspections and are not home inspectors.
An inspection is a third-party evaluation of the livable structure and systems of a property, from the top to the bottom.
The archetypal property inspector's report will include an evaluation of the condition of the house'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.
What is the difference between an appraisal and a comparative market analysis (CMA)? (Back to top)
To be blunt, it's like comparing sugar and saccharin.
What the CMA relies upon are vague trends.
Appraisals use comparable sales which are valid resources.
The appraisal report will also contain neighborhood and construction prices.
A CMA delivers a "ball park figure."
Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
But the largest differentiator is who's doing the report.
Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's.
The appraisal is produce 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 previously agreed upon fee for assignments, regardless of their outcome.
Every appraisal should demonstrate a credible estimate of value and must clearly state the following:
- Who engaged the appraiser and whose purposes the appraisal is to serve.
- How the appraisal is supposed to be used.
- The purpose of the assignment.
- The type of value reported and a definition of the value reported.
- The effective date of the appraiser's opinions and conclusions.
- Pertinent property attributes, including: location, physical attributes, legal attributes, economic attributes, the property rights 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 other items of a similar nature.
- Division of interest, such as fractional interest, physical segment and partial holding.
- What was entailed in the process of completing the appraisal.
For a more detailed look at what goes into an appraisal report click here: Sample Appraisal Report
Upon completion of the appraisal, how can I have assurance that the value indicated is veritable? (Back to top)
In communicating an appraisal report, each appraiser must ensure the following:
- The appraisal contained an apropos analysis of the information.
- Whether individually or collectively, there were no crucial errors contained in the report, nor any relevant details left out.
- That appraisal services were rendered in a careful and cognizant fashion.
- The final appraisal report was understandable, legitimate and defensible.
To become a state licensed appraiser, there are intense education requirements as well as real world experience that must be attained.
In addition, appraisers must follow a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The rules for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).
(Back to top)
Regulations regarding licensing and certification vary from state to state. However, licensing and certification is most often associated with many hours of classroom study, tests and practical experience.
Once licensed, he or she is required to engage in continuing education courses so the license remains up to date. To see the specific requirements for any state click here.
Who are an appraiser's customers? (Back to top)
Mortgage lenders are an appraiser's typical customer, requesting their services to ensure property involved in a mortgage transaction is adequate collateral for a loan.
Attorneys and CPAs also hire appraisers for asset division and estate settlements.
Where does Matsunami Appraisals, Inc. get the data used to estimate values in Honolulu County or other areas? (Back to top)
Compiling information is one of the primary occupations of an appraiser.
Data can be classified as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.
General data is collected from a number of sources.
To research recently sold homes to be used as "comps", we typically use the local Multiple Listing Service.
To double-check actual sales prices, we look at tax records and other public documents.
Appraisers routinely have to report when a property lies 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 assembles 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? (Back to top)
If you're making any kind of financial decision and the value of your home is relevant, you'll want an appraisal.
If you're selling your home, an appraisal assists you in setting a price that maximizes profit and reduces time on the market.
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. Don't make decisions in the dark with a professional appraisal.
My mortgage statement has an item on it for PMI? Can I get rid of that? (Back to top)
PMI is the common abbreviation for for Private Mortgage Insurance.
PMI guards the lender in the event a borrower is unable to pay on the loan and the value of the property is less 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.
 |
 |
 |
Is PMI something increasing your monthly mortgage payment?Call Matsunami Appraisals, Inc. today at (808) 551-5298 or send us an e-mail. A current appraisal could save you thousands.
|
|
 |
Should I do anything in advance of the appraisal inspection (Back to top)
The first step in most appraisals is the home 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.
Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house . Trim any shrubs and relocate any items that would make it difficult to measure the structure. On the inside, make sure the appraiser can easily access appliances like furnaces and water heaters.
To help speed things along plus ensure a more accurate report, attempt if possible to have the following items:
- A plot plan or survey of the house and land (if available).
- Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
- Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
- Brag sheet that lists major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
- A bill for your most recent real estate taxes which should also contain a legal description of the property.
What does "Market Value" mean? (Back to top)
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."
Does the appraisal belong to the bank or the consumer? (Back to top)
In most real estate transactions, the appraisal is ordered by the lender.
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.
It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage.
In these situations, the appraiser may define 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? (Back to top)
The added value of a particular amenity truly depends on the local market.
For example,
while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes
No matter where you go, however, renovating a kitchen is almost always a safe move.
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 (when done well) as long as your home doesn't then become atypical for your neighborhood in terms of size.
|