Servicing Arlington, Fairfax, Loudoun and Prince William counties as well as the independent

Virginia cities of Alexandria, Fairfax, Falls Church, Manassas and Manassas Park


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Appraisal FAQ'S

 

Why do I need an appraisal?

There are a variety of reasons that may call for the services of a professional real estate appraiser. Some of these include the obtaining of financing, corporate relocation, property partition (divorce settlement) proceedings, tax assessment review/appeal, litigation preparation, elimination of a lender's mortgage insurance requirement and pre-purchase/marketing consultation.

How does one become qualified to be an appraiser?

As a result of congressional action, all states require appraisers to be state licensed or certified. The Appraisal Institute though encourages appraisers to surpass the minimum requirements and earn a professional designation (SRA or MAI). Designated members of the AI must have fulfilled rigorous educational and experience requirements and are compelled to adhere to strict industry standards and a professional code of ethics.

Is a designated appraiser really different from a state licensed (non-designated) one?

Experience is showing the users of appraisal services that not all state regulated appraisers are equal. AI members who hold either the SRA or MAI designation are among the most qualified in the industry. They exceed federally mandated state certification standards, meet exacting education and experience requirements and abide by a strictly enforced Code of Professional Ethics and Standards of Professional Appraisal Practice.

Why are real estate appraisals necessary?

The wealth and economic well being of many private, corporate and public concerns lies in a substantial investment in real estate. One of the roles of the appraiser is to gather, analyze and apply data in order to determine the value of real property rights. The professional opinion of the appraiser influences the decisions of those who own, manage, sell, purchase, invest in or lend money on the security of real estate. As the appraiser is trained to be an impartial participant in these activities, this professional can serve to protect real estate buyers from overpaying for property and lenders from making decisions that lead to a loss in their loan portfolio.

What is the difference between a short form report and the more commonly used and traditional "Fannie Mae/Freddie Mac (URAR)?

The URAR report is relied on primarily by the primary and secondary mortgage lending market. It contains many items and requirements that are not necessarily required in order to estimate value. Both reports rely primarily on direct sales comparison (market approach) with a market grid to determine the value of the subject property. Short form reports are well suited for tax appeal, gift and estate tax purposes, helping a seller price a home, assisting a buyer in determining what price to offer or pay for a home and uncontested divorce proceedings.

What process does the appraisal involve?

The appraisal process is an orderly method of reaching a value conclusion. The process has six major steps: 1) Definition of the problem, 2) Preliminary survey and appraisal plan, 3) Data collection and analysis, 4) Application of the approaches to value, 5) Reconciliation of the value estimates and 6) Final estimate of value. In most residential appraisals, the market approach best reflects the actions of buyers and sellers in the market and is the most accurate and defendable approach to value.

What is the market approach?

The market approach (direct sales comparison) to an estimate of value is the process of comparing market data (prices paid for similar properties, prices offered by current sellers and pending offers made by prospective purchasers). In the market approach, the appraiser attempts to reflect the actions of buyers and sellers in the market in comparison to the subject property.

What is a comparable sale?

A comparable sale is a property, similar to the subject property in most respects (location, style, age, condition, etc.) that has recently sold in an arms length transaction. An arms length transaction is one in which both seller and purchaser act completely independent of each other and have no connection or relationship. The selection of comparable sales, in most cases, is the single most important factor in estimating value. It is the appraiser's responsibility to research the local market and determine which comparable sales most accurately reflect the characteristics and amenities of the subject property.

 
 
 
Hicks Real Estate Services, Inc.
PO Box 245, Clifton, VA  20124-0245
Phone: 703-631-5222 Fax: 703-815-0942 E-mail: info@bhicks.com