Appraisal

1. Why do I need a professional real estate appraisal?

An appraisal can be used for many purposes, including:

  • Mortgage Purchase & Refinance
  • After Repair Value
  • Estate Planning & Settlement
  • Dispute Resolution - Including Bankruptcy, Estate Settlements, Divorce, & Foreclosures
  • Expert Witness Testimony
  • Determine Listing Price
2. What are the most important considerations in the valuation of real estate?

The value indicated by recent sales of comparable properties, the current cost of reproducing or replacing a building and the value that the property's net earning power will support are the most important considerations in the valuation of real estate property.

3. What is market value?

The most probable price which a property should bring in a competitive open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, 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 one seller to buyer under conditions whereby:

  • Buyer and seller are typically motivated
  • Both parties are informed or well advised each acting in what he or she considers his own best interest
  • A reasonable time is allowed for exposure in the open market
  • Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto
  • 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
4. Who owns the appraisal? Who has rights to the appraisal report?

The appraisal is "owned" by the client who ordered the appraisal (engaged the appraiser), regardless of who paid for the appraisal.

5. If I am paying for the report, will you send me a copy?

By federal law, you are entitled to receive a copy of the appraisal from the lender. Unfortunately, appraisers are not able to provide you a copy of the appraisal, unless formally instructed by the client.

6. What is an After Repair Value (ARV) Appraisal?

Real Estate Investors buy distressed properties that are typically in need of repairs with the intention of fixing the dwelling and selling it for a profit.  These projects are commonly known as fix and flips.  In order to determine if the property is a viable investment, they must estimate what the value of the property will be after the repairs are completed (After Repair Value).  When an investor needs financing for the project, the lender will request an ARV appraisal from a licensed and/or certified appraiser to ensure there will be sufficient equity to finance the repairs.

7. Is an appraisal the same as a home inspection?

The answer simply is no.  An appraisal is done by a licensed or certified appraiser to determine market value when buying a home.  Banks typically require an appraisal to be done when a purchaser is obtaining a mortgage.  A home inspection is not a mortgage requirement, but done by a certified home inspector to determine the overall condition of the property, beyond the scope of an appraisal. An appraisal will report readily observable defects. A home inspection will provide a more thorough description of the condition of the structure, mechanical systems, major appliances, safety concerns etc.

8. Should I do anything in advance of the appraisal inspection?

The appraisal inspection will include several photos taken of the interior and exterior, measurements of your structure and will in return establish a fair market value of your home.

To help the appraisal inspection go quicker and smoother, you can make sure there is easy access to the exterior of your house, make sure no gates are locked, landscape is trimmed, and nothing is in the way for them to measure your structure. As per the inside of the house, make sure your appliances (furnace, water heater, etc.) are also easily accessible.

In addition, a list of major home improvements, renovations, enhancements, the date of their installation and the cost may help the appraiser provide a more accurate report within a shorter time frame.

 


Title

1. What is title insurance and why do I need it?

Title Insurance is a form of indemnity insurance predominantly found in the United States which insures against financial loss from defects in title to real property and from the invalidity or unenforceability of mortgage loans. Title insurance is principally a product developed and sold in the United States as a result of an alleged comparative deficiency of land records in that country. It is meant to protect and owner's or lender's interest in real property against loss due to title defects, liens or other matters.

2. What can make title defective?
  • Fraud
  • Forged Deeds
  • Unknown Heirs
  • False Affidavits
  • Unpaid Judgments
  • Unified Liens
  • Forged Documents
  • Improperly Indexed Documents

3. How much could I lose if a claim is filed against my property?

That depends on the claim.  In an extreme case, you could lose your entire home and property and still be liable to pay off the balance of you mortgage.  Most claims aren't' that dramatic, but even the smallest claim can cost you time, money and aggravation, and you may have to pay costs for a legal defense

4. How does title insurance protect my investment if a claim should arise?

If a claim is made against your property, title insurance will, in accordance with the terms of your policy assure you a legal defense - and pay all court costs and related fees.  Also, if the claim proves invalid, you will be reimbursed for your actual loss up to the face amount of the policy.

5. How long does my title insurance last?

For as long as you or your heirs retain an interest in the property.

6. Do I need a lawyer to close a real estate transaction?

While simple real estate transactions may be handled without a lawyer, you may want your attorney to clarify any terms that are unclear to you in any documents you are being asked to sign.

7. What is the difference between and standard ALTA Title Insurance Policy and an Eagle Owner’s Policy?

An Eagle Owner’s Policy provides expanded title coverage for owners of one-to-four family residences, including condominiums. The included coverages in the Eagle Owner’s policy offer the highest levels of protection available to homeowners.

8. Should I buy title insurance when purchasing a property from the sheriff sale or an REO?

Although the sheriff sale is designed to strip all interests and liens form properties, a sheriff’s deed does not provide any warranties. Often the results of a title search will reveal issues that need to be resolved by the foreclosing bank prior to paying off the sheriff.

9. Can I pick my own title company when refinancing or purchasing a property?

As the homeowner you have the right to choose your own title insurance company. If you do want to use a specific title company, it needs to be noted to your lender at the time of submitting your loan application. When refinancing, you have the right to choose the title company. If you do not choose one, your loan officer will choose one for you.

10. Is the premium on title insurance regulated in New Jersey?

Yes, premiums in New Jersey are a regulated cost, along with endorsements, examination fees, recording fees and transfer taxes.