Infinity Appraisal Group, LLC has answers to "Frequently Asked Questions"

Define the term "Appraisal"   
 
An appraisal is an investigation allowing the appraiser to come to an opinion of value. There are three "common approaches to value" which assists the appraiser come to this opinion or estimate. One of them is the Cost Approach - which is how much it would cost to replace the improvements, minus physical deterioration and other factors, then adding the land value. The most common approach in finding the value of a house is the Sales Comparison Approach which concerns figuring a comparison to comparable homes close by. The Sales Comparison Approach is normally 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 mainly used to figure the value of a property based on what an investor would pay based on the capital produced by the building.
 
What does an appraiser do? 
An appraiser provides a fair and credible determination of market value, in the support of real estate exchanges. Appraisers illustate their conclusions in appraisal reports.

 
What would cause me to need services from Infinity Appraisal Group, LLC?  
 
There are a lot of reasons to purchase an appraisal from Infinity Appraisal Group, LLC with the usual reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal report include:
 
  • If you are applying for a loan.
  • To lower your property taxes.
  • To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
  • To contest high property taxes.
  • To settle an estate.
  • To provide you a leg-up when purchasing real estate.
  • To find a reasonable price when putting your home on the market.
  • To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Government agencies such as the IRS require an appraisal on every house.
  • It's possible you could be involved in a lawsuit - an appraisal will definitely help.
 
 
For a more detailed description of the appraisal process contact us.
 
 
How is an appraiser different than a home inspector? 
 
The appraiser is not a home inspector and he or she does not do a comprehensive home inspection. An inspection is a third-party investigation of the available structure and systems of a property, from the roof to the bottom. The usual property inspector's report will contain an evaluation of the condition of the house's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible 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)? 
 
Honestly, they have nothing in common. What the CMA depends on are superficial trends. The appraisal is reliant on similar proven comparable sales. The appraisal report will also include neighborhood and construction costs. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

The person creating the report is actually the biggest difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, Florida licensed professional who made their livelihood on valuing properties in and around Broward County creates the appraisal. Further, the appraiser is an unbiased voice, with no conditional interest in the value conclusion, unlike the real estate agent, who gets a commission based upon the price of the home.
 
What can I expect to see in my appraisal report?
  
The main purpose of an appraisal report is to provide a value opinion, and depending on the scope of the report, one will customarily see the following:
 
  • The client and whose purposes the appraisal is to serve.
 
  • How the appraisal is supposed to be used.
 
  • The appraisal's purpose.
 
  • Precisely what "value" attribute is being reported and what that value means.
 
  • The effective date of the value opinion.
 
  • Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic   factors, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible items.
 
  • 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 involved in the process of completing the assignment.
 
For a more comprehensive look at all that goes into an appraisal report click here: Sample Appraisal Report

 
After completing the report, what assurance is there that the value conclusion is valid?  
 
In communicating an appraisal report, each appraiser must make sure of the following:
The appraisal used a suitable analysis of the information.
 
  • That crucial errors of omission or commission were not committed individually or collectively.
  • That appraisal services were done in a careful and cognizant manner.
  • The final appraisal report was transparent, sound and defensible.
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To become a state certified appraisers, we must satisfy extensive education and experience requirements that give us the background to produce an unbiased opinion. Likewise, appraisers must obey a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for working up an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


 
Who do appraisers work for?  
 
Typically, appraisers are employed by lenders to estimate the value of a home involved in a loan transaction - to make sure the subject is truly adequate collateral for the loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.
 
Where does an appraiser get the information used to estimate values in Broward, Miami Dade or other areas?   
 
Collecting data is one of the primary activities of an appraiser. Data can be split into Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is gathered from a number of places. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. Tax records and other public documents reveal actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood servers.

And last but not least, the appraiser gathers general data from his or her past experience in doing assignments for other properties in the same market.

 
Why do I need a professional appraisal?   
 
If you're making any kind of financial decision and the value of your home matters, you'll want a full appraisal. If you're selling your house, an appraisal will help you determine the most appropriate price. When buying, you can avoid overpaying by commissioning an independent appraisal. For those settling an estate or divorce, an appraisal from Infinity Appraisal Group, LLC is the best way to ensure assets are split up fairly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making wise financial decisions.

 
What exactly is PMI and how can I get rid of it? 
 
PMI is the common abbreviation for for Private Mortgage Insurance. This supplemental policy covers the lender in case a borrower doesn't pay on the loan and the value of the house is less than the loan balance. 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.
 
The money you keep from getting rid of the PMI required when you got your mortgage pays for the appraisal in no time. Infinity Appraisal Group, LLC is in the business of tracking value trends in Pembroke Pines and Broward County. Contact us today.
 
How do I get ready for the appraiser?  
 
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 status of its features. The best thing you can do to help is make sure we have easy access to the exterior of the house . Trim any landscaping and relocate any items that would get in our way while we measure the structure. Indoors, make sure we can easily access appliances like furnaces and water heaters.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
 
  • A plat map or survey of the house and land (if readily available).
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  • Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
 
  • Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .
 
  • A list of any major home improvements and upgrades, 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 list of "suggested" improvements if the property is to be appraised "as complete".
 
 
 
Define "Market Value" 
  
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."

 
Does the appraisal belong to the bank or the consumer?  
 
For mortgage transactions, the lender orders the appraisal, either directly or through a third party. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is 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 scenarios, the appraiser may state how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can use the appraisal for any purpose.

 
Which home renovations add the most to the price?   
 
This really depends on where the home is. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

As a rule, the most value returned 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 are right up there with kitchens, returning 85%. Adding bedrooms and baths can also help 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.