Who Needs An Appraisal?

Who Needs An Appraisal?

If you find yourself reading this, you might be wondering the same thing. It can be confusing as there are different types of appraisals for different reasons. For some transactions you can hire an appraiser personally, while others are facilitated for you through your bank or an intermediary company. First let’s start by addressing  in basic terms what an Appraisal is, what it is not, and the different types of appraisals.

                What an Appraisal IS:

·         An appraisal is the process of developing an opinion of value. That opinion of value may be expressed as a range of values, as more than or less than a specific comparison property, or most often, as a specific number.

·         The appraisal report is often referred to simply as “the appraisal”. But the appraisal report is actually the written or digital file summarizing all the research compiled by your appraiser through inspecting the property, and conducting thorough market research. Appraisal reports have the Appraiser’s opinion of value stated, with a detailed explanation of how they arrived at that opinion of value, including photos, floor-plan, comparable sales, and market research data.

What an Appraisal is NOT:

·         Although often mixed up, an Appraisal (or an Appraisal inspection) is not the same thing as a

Home inspection.

• Home inspectors perform a more detailed inspection of the functionality, and integrity of your home. For example: a Home inspector would get in your crawl space, and look for signs of mold, moisture, wood rot, as well as get on the roof of your house and inspect the shingles for damage, and just about everything in-between!)

• It’s the job of the home inspector to report to their client (often the homeowner) any issues found which may need to be addressed (non-functioning electrical fixtures, structural problems, mold, etc..)

·         The Tax Assessment is not an appraisal. While still relevant to your property’s value (this is how your property taxes are calculated) the tax assessor’s inspection and reporting process are also quite different from an Appraiser. Your property’s “assessed value” per your county tax records is not the same thing as the market value of your home.

• Your county tax records may also include the tax assessor’s sketch and/or measurements of the interior Gross Living Area (or GLA – what’s considered in the interior square footage count of the house)

• However, these numbers are often inaccurate, and should not be relied upon for valuation purposes

The Different Types of Appraisals:

-          I’m not going to get into every different appraisal form and report type there is here, but I will provide a summary of the most common appraisal report types you might come across and their applications

• The 1004:

-  This is the most commonly used appraisal report type for purchases and refinance transactions

-  This form is pretty similar to the General purpose form we will cover later, but it includes some sections required by Fannie Mae that other transactions don’t require

-  For purchase and refinance transactions, your loan company will likely use an intermediary known as an AMC (Appraisal Management Company) to hire your appraiser. So if you’re buying or refinancing a home your loan officer will facilitate the appraisal process.

• The 1073:

-  This is the report form used for condominium projects going through purchase or refinance

-  This form includes specific sections for condominium specific information (amenities, management fees, etc…)

• The General Purpose Appraisal Report (GPAR)

-  This type of appraisal report is primarily for other general asset valuation purposes

-  Appraisers are not allowed to use the 1004 for other transactions like (simple asset valuation, estate appraisal, divorce appraisal, or tax assessment appeal appraisal)

-  The General Purpose Appraisal Report is very similar in its presentation to the 1004 report, but with some unnecessary elements removed.

-  If you’re looking for an appraisal of someone’s estate, a divorce appraisal, or tax assessment appeal appraisal, you personally can hire an appraiser (and they will deliver your report on a General Purpose form)

So Who Needs an Appraisal?

                As we covered, there are many instanced in which an individual would need an Appraisal. For most purchase and refinance transactions an appraisal is requested from either the loan company directly (which is a relatively newer development) or more typically through an Appraisal Management Company. So if you are purchasing or refinancing a home, you don’t have to worry about finding an appraiser, as one will be provided to you. For most other personal purposes one would need an appraiser, you will have to find an appraiser yourself and request a General Purpose Appraisal Report inspection.

Laser Appraisal is located in Middle Tennessee just south of Nashville in Franklin and serves the following counties: Williamson, Davidson, Cheatham, Robertson, Sumner, Wilson, Rutherford, Maury, Hickman, & Dickson.
If you are looking for an appraiser or in need of measurements for your home or space, reach out here.