What We Do

Responsibilities Of the Appraiser

Work of an appraiser is to guide the client while buying a home and provide
correct price estimations.

What is an Appraisal?

An appraisal is an unbiased third party estimate of what a buyer might expect or pay, or what a seller receives for a parcel of real estate, where both buyer and seller are informed parties. To be an informed party, most people turn to a certified professional appraiser to provide them with the most accurate opinion to determine the fair market value of their property.

Babros & Associates, LLC Professional Residential Appraisal

The Inspection

So what goes into a real estate appraisal? It starts with a physical inspection which includes interior and exterior observations of the improvement. An appraiser’s duty is to inspect the property being appraised to ascertain the true status of that property.

The appraiser examines all the features - such as bedrooms, bathrooms, and location to ensure that they exist and are in the condition a reasonable buyer would expect them to be. The inspection often includes a sketch of the property, ensuring the proper square footage and conveying the layout of the property.

Most importantly;

The appraiser looks for any obvious features or defects that would affect the value of the house. Once the site has been inspected, an appraiser uses two or three approaches to determine the value of the property - a cost approach, sales comparison and in the case of a rental property, an income approach.

The cost approach is the easiest to understand. The appraiser uses the information on local building costs, rates, and other factors to determine how much it would cost to construct a property similar to the one being appraised. This value often sets the upper limit on what a property would sell or why would you pay more for an existing property if you could spend less and build a brand new home instead. While there may be mitigating factors such as location and amenities, these are usually not reflected in the cost approach.

Sales comparison appraisers rely on the sales comparison approach to determine features, such as location and amenities. They get to know the neighborhoods in which they work and understand the value of certain features to the residents of that area. They know the traffic patterns, the school zones, the busy throughways. This information is used to determine which attributes of the property make a difference in the value.

Then, the appraiser researches recent sales in the vicinity and finds properties that are "comparable" to the subject being appraised. The sales prices of these properties are used as a basis to begin the sales comparison approach using knowledge of the value of certain items such as square footage, extra bathrooms, hardwood floors, fireplaces or view lots (just to name a few).

The appraiser adjusts the comparable properties to more accurately portray the subject property. For example, the comparable property has a fireplace and the subject does not, the appraiser may deduct the value of a fireplace from the sales price of the comparable home. If the subject property has an extra half-bathroom and the comparable does not, the appraiser might add a certain amount to the comparable property.

In the case of income-producing properties - rental houses for example - the appraiser may use a third approach to valuing the property. In this case, the amount of income the property produces is used to arrive at the current value of those revenues over the foreseeable future.

Reconciliation

Combining information from all approaches, the appraiser is then ready to stipulate an opinion of estimated market value for the subject property. It is to note that while this amount is probably the best indication of what a property is worth, it may not be the final sales price. There are always mitigating factors such as seller motivation, urgency or "bidding wars" that may adjust the final price up or down. But the appraised value is often used as a guideline for sellers who don't want to ban buyer money that the property is actually worth.

The bottom line is - an appraiser will help you get the most accurate property value, so you can make the most informed real estate decisions.

Privacy Notice

Pursuant to the Gramm-Leach-Bliley Act of 999, effective July I, 2001, appraisers, along with all providers of personal financial services are now required by federal law to inform their clients of the policies of the firm with regard to the privacy of client nonpublic personal information. As professionals, we understand that your privacy is very important to you and we are pleased to provide you with this information.

Types of nonpublic personal information we collect in the course of performing appraisals, we may collect what is known as 'nonpublic personal information" about you. This information is used to facilitate the services that we provide to you and may include the information provided to us by you directly or received by us from others with your authorization.

Parties to Whom We Disclose Information

We do not disclose any nonpublic personal information obtained in the course of our engagement with our clients to nonaffiliated third parties, except as necessary or as required by law. For example, a necessary disclosure would be to our employees, and in certain situations, to unrelated third party consultants who need to know that information to assist us in providing appraisal services to you.

All of our employees and any third party consultants we employ are informed that any information they see as part of an appraisal assignment is to be maintained in strict confidence within the firm. A disclosure required by law would be a disclosure by us that is ordered by a court of competent jurisdiction with regard to a legal action to which you are a party.

Confidentiality & Security

We will retain records relating to professional services that we have provided to you for a reasonable time so that we are better able to assist you with your needs. In order to protect your nonpublic personal information from unauthorized access by third parties, we maintain physical, electronic and procedural safeguards that comply with our professional standards to ensure the security and integrity of your information.

Please feel free to call us at any time if you have any questions about the confidentiality Of the information that you provide to us.

Why get an Appraisal?

Everyday people buy, sell or refinance their properties in pursuit of the American Dream. Most of these transactions include an appraisal as a requirement. It has become customary in real estate transactions to ensure that an expert evaluates the property to ensure people are getting the value for the property.

But is this the only reason to get an appraisal? Are there other times when the services of a certified, licensed, real estate professional might come in handy? You bet.

Purchase of a Home

A key factor in purchasing a property is developing an opinion of its worth so you can make an informed offer to purchase. A professional appraisal report presented by a qualified state-licensed appraiser can provide you with an unbiased third party opinion of a property's current Market Value. This service gives you peace of mind prior to that you are making or receiving a false offer to purchase or sell a property.

Refinance Or Get A Home Equity Loan

Want to tap into the equity of your home? Do you need to consolidate bills or pay college tuition? If you do, you'll need a new loan, which oftentimes requires a new appraisal of your property

PMI Removal

Private mortgage insurance or PMI is the supplemental insurance that many lenders ask home buyers to purchase when the amount being loaned is more than at the value of the home. This additional payment is folded into the monthly mortgage payment and can be forgotten quickly. This is unfortunate because PMI becomes unnecessary when the renewing balance of the loan, whether through market appreciation or principal pay down dips below this level. In fact, the United States Congress passed the law in 1998 (the Homeowners Protection Act Of 199B) that requires lenders to remove the PMI payments when the loan-to-value ratio conditions have been met.

Many appraisers offer a specific service for homeowners that believe they have met the loan-to-value for a nominal fee. The appraiser can provide you with a statement regarding the home value. We will even fake the next step and help you file a change with your mortgage company. The costs of these services are can be recovered in just a few months of not paying the PMI.

Marital Dissolution Settlement

Divorces can be difficult enough for both parties and can become extremely complicated to navigate the question, "Who gets to keep the house” in the majority of divorces. The Court does not dictate that one party must "buyout" the other's interest, but the Court may order the sale of the property so each party gets equal shares of the home's equity. Nevertheless, an appraisal should be ordered that both parties are aware of the property's true fair market value.

If the parties choose to sell the home, they’ll have to talk on what price to ask. On the other side, if a "buyout" is chosen, both parties will be ensured that they've received a fair market value opinion.

Estate Liquidation

Losing a loved one is one of most difficult things to deal with. To top it off, settling an estate from a death, or probate often requires an appraisal to establish fair market value for the residential property involved. The ethics provision within the Uniform Standards of Professional Appraisal Practice (USP API) binds us with confidentiality ensuring the fullest degree of discretion.

Unlike like a wealthy minority, the middle-class majority of Americans do not have dedicated estate planners or executors to handle these concerns, Also in most cases, a home's other real property makes up a disproportionate share of the overall estate value.

An appraiser can assist you here, as the first step in settling an estate fairly is to understand its true value. Where property is involved, the appraiser helps to determine the actual worth.

At this point, equitable arrangements can more easily be arrived at among disputing parties. Everyone can be assured that they have received a fair deal.

Home Improvements To Add Value

There are a number of questions to answer before selling your home. Most importantly, "How much should I sell it for" among the others you may ask yourself are, "Should I paint the interior and exterior of my home before selling it”, "Should I remodel my kitchen?" and "Should I add an extra bathroom?' These are good questions to ask.

They all add value to the property, although they will not add equal amounts of value. An updated kitchen, a bathroom addition will add to the appeal of a home, but the cost of the renovations may not add enough value to justify.

Selling A Home

Whether you choose to sell your home independently or with the assistance of a real estate agent, a professional appraisal helps make an educated decision when determining your selling price, Unlike a real estate agent, appraisers have no vested interest in the amount a property sells for, its easy for them to step in and give you the information to help you make your decision.

Appraiser fees are based on efforts to complete the report, not a percentage of the sales price. Seeking a professional appraisal helps homeowners make the best decisions on investing in their homes and setting forth sales.

Babros & Associates, LLC