Hanamura Appraisal Company has answers to "Frequently Asked Questions"
Hanamura Appraisal Company is prepared to handle any questions you might have about appraisals in Honolulu and Honolulu County. Contact us today to talk about how we can help solve your specific valuation problems.
(Go to list of questions)The procedure of writing an appraisal consists of an investigation which forms an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or valuation. One of the methods in use is the Cost Approach, which finds what it would cost to restore the improvements to the house, less the depreciation and physical dilapidation, plus the land value. Easily the most common approach in figuring the value of a house is the Sales Comparison Approach which deals with making a comparison to comparable houses nearby. Being the most commonly used approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a residential property. The third approach is the Income Approach, which is the best method in appraising income producing properties - it involves estimating what an investor would pay based on the money generated by the property.
(Go to list of questions)An appraiser forumlates a professional, unbiased assessment of market value, often in the context of a real estate sale. Appraisers document their professional analysis in appraisal reports.
(Go to list of questions)There are many reasons to purchase an appraisal with the most common reason being real estate and mortgage transactions. Some other reasons for purchasing an appraisal report include:
If you are applying for a loan.
If you would like to lower your property tax obligations.
To build a case for a homeowner's equity and remove PMI.
To challenge inflated property taxes.
To deal with an estate.
To provide you a leg-up when purchasing a home.
To determine an honest sales price when putting your home on the market.
To ensure parties are provided just compensation in eminient domain cases.
Because a government agency such as the IRS requires it.
If you are ever involved in a civil case.
For a more extensive description of the appraisal process click here.
Home inspectors do not provide an opinion of value and do not use the same forms as appraisers. The purpose of a home inspection is to evaluate the structure of the home from foundation to top. The usual home inspector's report will contain an evaluation of the integrity of the house's heating system, 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.
(Go to list of questions)Honestly, they have nothing in common. The CMA depends on indistinct market trends. The appraisal depends on similar valid comparable sales. Location and construction prices are also important 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.
Who's creating the report is actually the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. A certified, Hawaii licensed professional who bases their livelihood on valuing homes in and around Honolulu County is behind the appraisal. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat fee for assignments, regardless of their outcome.
Every appraisal should indicate a credible estimate of value and will clearly state the following:
The client and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The reason for the assignment.
Precisely what "value" attribute is being reported and what that value means.
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 factors, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible factors.
Any 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.
What was involved in the process of completing the appraisal.
For a more comprehensive look at the work that goes into an appraisal report click here: Sample Appraisal Report
(Go to list of questions)In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
The appraisal contained analysis of the data.
Whether individually or collectively, there were no substantial errors contained in the report, nor any relevant details left out.
That appraisal services were delivered in a careful and cognizant fashion.
That a credible, supportable appraisal report was communicated.
To become a state licensed appraiser, we must satisfy considerable education and experience requirements that train us to produce an unbiased opinion. In addition, appraisers must follow a strict industry code of ethics and respect national standards of practice for real estate appraisal. The rules for working up an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).
(Go to list of questions)Mortgage lenders are an appraiser's typical client, needing their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements. Homeowners and potential homeowners also hire appraisers for various reasons.
(Go to list of questions)Gathering data is one of the main things an appraiser engages in. Data can be categorized as either Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.
General data is collected from a many sources. Local Multiple Listing Services (MLS) provide data on recently sold homes that could be used as comparables. To double-check actual sales prices, we research items in the assessor's office and other public documents that are usually online nowadays. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood product.
And last but not least, the appraiser assembles general data from his or her collective knowledge gained from doing assignments for other properties in the same market.
(Go to list of questions)If you're involved in any kind of financial decision and the value of your home is relevant, you'll want a full appraisal. For those selling a home, you'll want to determine a price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. When buying, you can avoid overpaying by getting an independent appraisal. For parties settling an estate or divorce, an appraisal from Hanamura Appraisal Company is the best way to ensure assets are split up evenly. Simply put, a home is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.
(Go to list of questions)PMI is the common abbreviation for for Private Mortgage Insurance. PMI takes care of the lender in the event a borrower doesn't pay on the loan and the value of the home 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 a line item in your monthly mortgage payment? Call Hanamura Appraisal Company today at (808) 735-2600 or send us an e-mail. Documentation of your home's present value could save you thousands.
(Go to list of questions)The first step in most appraisals is the home inspection. During this process, the appraiser 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 . Trim any bushes and relocate any items that would make it difficult to measure the structure. On the inside, make sure we can easily access appliances like furnaces and water heaters.
You can make things go faster and improve the quality of the appraisal report by having the following things on hand:
A survey or plot map of the property and building (if readily available).
List of personal property to be sold with the home.
Most recent real estate tax bill from Honolulu and or legal description of the property.
A list of any major home improvements and upgrades, 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).
Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
(Go to list of questions)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."
(Go to list of questions)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 report - 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 the purpose of the appraisal; 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.
(Go to list of questions)Like all things real estate, this is dependent on a home's location. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!
No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 were second, returning 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.
Hanamura Appraisal Company 539 12th Avenue Honolulu, HI 96816
