1.
What determines what my home is worth?
I
am sure that you have heard that value is based on "Location,
Location, Location". This is very true. However, when you are
refinancing or trying to sell your home, you should be trying to answer
a different question.."What value can my home support? Market
Value is NOT a fact. A sales price is a fact that should be close
to market value.
Market
Value is defined as ""The most probable price 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,
knowledgeably and assuming 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: (1) buyer and seller are typically motivated;
(2) both parties are well informed or well advised, and each acting
what he or she considers his or her own best interest; (3) a reasonable
time is allowed for exposure in the open market; (4) payment is made
in terms of cash in U.S. dollars or in terms of financial arrangements
comparable thereto; and (5) 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."
Sales
of recent and proximate homes assist in determining what is current
market value. One must also consider the number of similar homes for
sales within the same immediate area or "submarket" to determine
the balance of supply and demand.
Value
is based on several key factors, think of the acronym DUST. Demand,
Utility, Scarcity and Transferability. Analyzing the level of demand,
utility and scarcity for each property will help you determine the
value of your home.
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2.Where
do you get your information?
Most
of the data sources that Independence Data uses to research properties
are public internet records. You can search these records as easily
as we do. We have the experience and knowledge to provide you with
a clear and concise report on a property so you can make logical and
supported decisions with your real estate. Independence Data also
uses several private data services for assistance. See our Real
Estate Links page for links to many of our data services.
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3.
How accurate is your information?
The
information provided to you is as accurate as much as possible. Most
property records have some errors, however, it is the most complete
data available. Most counties with online real estate data update
their information daily. Other data services are usually updated monthly.
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4.How
do I pay for this service?
Once
you complete our online form, we will send you and email detailing
what you will receive. A payment link to PayPal is included. Click
on the link in the email and use PayPal's secure credit card processing.
Once we receive payment confirmation, we will begin researching your
property. You will receive your information within 24 hours. If you
have chosen to have your information posted on a secure web page,
it will be available within 24 hours.
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5.
How do I advertise on IndependenceData.com?
If
you would like to advertise on IndependenceData.com click
here, or go to the "Become
a Professional Member" button on each page.
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6.
What is your privacy policy?
We
will never sell any private information provided by our customers
to anyone for any reason. We only use PayPal for a payment option
to limit any personal information.
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7.
What if I don't agree with your information?
We
are not biased in any way. We only use your "estimate of value"
to make sure that you have all of the information to tell you what
you need to know. For instance, if most homes in your neighborhood
are selling for $100,000 and you estimate your value at $150,000,
we will attempt to provide you with additional sales information in
the $150,000 range to display evidence within the higher value range.
We are not appraising your property, we only supply you with the information
you need to make a sound financial decision..
If
you believe that you do not have the best sales data in your neighborhood,
please contact us immediately to resolve
the issue.
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8.
What is Fannie Mae & Freddie Mac?
Fannie Mae is a short form of the Federal National Mortgage Association.
Freddie Mac is short for the Federal Home Loan Mortgage Corporation.
FNMA and FHLMC are both what are known as GSE's, which are Government
Sponsored Enterprises. Both Freddie Mac and Fannie Mae purchase mortgages
on the secondary mortgage market to allow banks and lenders to loan
more money.
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9.
What is the difference between urban/suburban/rural?
In
most cases, urban is within a city, with suburban being near the outside
of the city and rural being outside of a city. However, this can also
be relative. Hilliard is a suburb of Columbus, however, still being
within a city. Rural locations are typically father from neighboring
properties. In some cases, being in a rural area will limit the available
loan-to-value (LTV) ratio.
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10.
What is obsolescence?
Mirriam-Webster's
online dictionary defines obsolescence as: the process of becoming
obsolete or the condition of being nearly obsolete. In real estate
terms, there are three forms of obsolescence. Physical, Functional
and External.
Physical
Obsolescence usually deals with the physical condition of
a property. Normal "wear and tear" and regular use of a
property will cause physical obsolescence. Physical Obsolescence is
also known as physical depreciation. The amount of physical depreciation
also influences the Age/Life Method of Depreciation. Total Economic
Life is the amount of time that it would take for the improvements
to cease improving value to the vacant land. The Effective Age of
the home is similar to "how old the house feels". Determining
the specific values for the Total Economic Life, Effective Age and
total Physical Depreciation can be very complicated on older homes,
but much easier on newer homes with less depreciation or "wear
and tear".
Functional
Obsolescence is a loss in value due to something on the subject
property which may or may not be condition driven. Functional obsolescence
can cause a loss in value due to a "funky" architectural
design, strange floor plan, lack of an amenity demanded by buyers
or having an amenity that buyers do not pay similar to replacement
cost. For instance, if all of the homes in your neighborhood have
2 car garages and one of the homes have one car garage, there may
be Functional Obsolescence due to an inadequacy.
An
improvement such as an in ground pool in Ohio is likely considered
to be Functional Obsolescence as a typical buyer will not likely pay
similar contributory value equal to cost of the amenity. For example,
if the market is paying $5,000 for an in ground pool and the cost
of that same pool is $25,000, the Functional Obsolescence would be
$20,000.
External
Obsolescence is a loss of value for a property due to negative
impacts outside of the property. If you have a home which backs to
a railroad track or industrial uses, it may suffer from External Obsolescence.
If you have similar homes, with one backing to a railroad track and
another doesn't, the difference would be the External Obsolescence.
There
are entire courses on obsolescence, and the information above is just
scratching the surface. Obsolescence can vary greatly from one home
to another.
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11.
How do I get a copy of my appraisal?
The
Equal Credit Opportunity Act of 1991 requires the lender to provide
a copy of the appraisal to any person who applies for a residential
mortgage. The creditor may require the applicant to reimburse the
creditor for the cost of the appraisal.
Usually,
you should receive a copy of the appraisal at closing with the other
required paperwork. If a copy is not provided, immediately request
a copy in writing.
You
may be paying for the appraisal, but the lender has ordered the appraisal.
The lender/mortgage company owns the appraisal. The appraisal can
only be used for mortgage financing by the requesting client. If you
are shopping for the best deal, make your decision before you have
an appraisal ordered. Somewhat recent changes in the Uniform Standards
of Professional Appraisal Practice requires a new appraisal be completed
for each client.
12.
What is Gross Living Area and how is it calculated?
