REFINANCING

Lenders base loan amounts on the value of your property and usually allow you to borrow a percentage of that value. Knowing your property's value allows lenders to calculate your equity. The more equity you have, the better terms you will typically receive on your financing.

PROPERTY IMPROVEMENTS

If you’re planning property improvement projects to increase the resale value, you want to make sure you’re not pricing it out of the market. If your property is already priced on the high-end for your neighborhood, making too many improvements could make it more difficult to sell. When you get a valuation, you can see how your property compares with others in the neighborhood and let this guide your improvement decisions.

QUALIFYING FOR CREDIT

If you want to borrow cash against your property, getting a Commercial Equity Line of Credit (CELOC) or Home Equity Line of Credit (HELOC) could be a good option. To qualify, you must have a certain level of equity in your property. Many lenders require at least 20%. Getting a property valuation will help you determine if you qualify and will be used by the lender to make a decision on your loan.

PLANNING

Though it’s not a necessity, simply knowing the value of your property is good information to have. It will help you plan for the future and deal with unforeseen circumstances when you might be in a position that requires extra money or a quick relocation. Knowing how much equity you have in your property and how much you may be able to borrow against it or sell it for will help you respond to any financial curveballs that life throws at you.

CMA

Comparative Market Analysis

A Comparative Market Analysis (CMA), sometimes called a BPO (broker price opinion), is a tool used by real estate agents to value a property. It evaluates similar properties that have recently sold in the same area. Agents find comparable sales and use them to conduct a sales comparison. In most cases, an agent will find three properties that have recently sold and are as similar to and located as close to the property being valued as possible. Each one is then analyzed to pinpoint differences between it and the property being valued. Once these differences are priced out, the price of each comp is adjusted to see what it would cost if it were identical to the property being valued and were it to be sold in the current market.

CERTIFIED APPRAISAL

A Professional’s Opinion

An appraisal is an unbiased valuation opinion of a property performed by a licensed appraiser.  At Sirk & Company, our appraisers hold Certified General Real Property Appraiser certifications, the highest level of appraisal licensure, allowing us to appraise any property type. We complete appraisals for individuals, companies, and lending institutions. Lenders usually use appraisals for financing property purchases and refinances. When seeking financing, the lender orders an appraisal, and the borrower pays the cost as part of the closing. An appraiser does a complete physical inspection of the interior and exterior of the property, and completes up to three approaches to value, including considering recent sales of similar properties and market trends, capitalizing its income-producing potential, and determining its depreciated replacement cost. The appraiser then reconciles the approaches into an overall value opinion and compiles a detailed report, typically including a summarization of all of the approaches to value, a building sketch, a map showing the property and any comparable sales, photos of the improvements and street, an explanation of how the square footage was calculated, and any other relevant information.