APPRAISAL SERVICES has answers to "Frequently Asked Questions"

APPRAISAL SERVICES is willing to elaborate on any inquiries you might have about appraisals or real estate in Grady County. Contact APPRAISAL SERVICES today to talk about how we can help you with your valuation problems.

What is an appraisal?
Describe what an appraiser does
What would cause me to request services from APPRAISAL SERVICES?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
After completing the appraisal, what guarantee is there that the final number is legitimate?
What does it mean for an appraiser to be licensed?
Who hires an appraiser?
Where does an appraiser get the data used to estimate values in Grady County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal appointment
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?



What is an appraisal?   (List of questions)

The appraisal process is an evaluation that generates an opinion of value. This opinion or estimate is found by using a formal process that usually utilizes three "common approaches to value". One of the processes is the Cost Approach - which is how much capital would be required to replace the improvements, minus physical deterioration and other factors, plus the land value. The most common approach in finding the likely sales price of a home is the Sales Comparison Approach which concerns figuring a comparison to comparable properties nearby. Being the most common approach, the Sales Comparison Approach tends to be the most precise and best indicator of market value for a property. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it involves estimating what an investor would pay based on the money generated by the property.

Describe what an appraiser does   (List of questions)

An appraiser forumlates a fair and credible opinion of market value, often in the context of a real estate exchange. Appraisers document their conclusions in appraisal reports.


What would cause me to request services from APPRAISAL SERVICES?   (List of questions)

There are a lot of reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for getting an report include:
  • If you are applying for a loan.
  • To lower your property taxes.
  • To build a case for a homeowner's equity and remove PMI.
  • To fight high property taxes.
  • If you need to settle an estate.
  • To offer you a leg-up when purchasing real estate.
  • To find an honest property value when selling your home.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS need an appraisal on every home.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will help.
Click here for a more extensive explanation of the process involved in getting an appraisal.


What is the difference between an appraisal and a home inspection?   (List of questions)

Appraisers do not do provide house inspections and are not home inspectors. The point of a home inspection is to evaluate the structure of the home from bottom to rooftop. The stereotypical home inspector's report will include an evaluation of the integrity of the house's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

Is an appraisal the same as a comparative market analysis(CMA)?   (List of questions)

Simply, they have nothing in common. The CMA relies on indistinct market trends. Appraisals use comparable sales which are verifiable resources. In addition, the appraisal looks at other factors like condition, area and replacement prices. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the most significant factor is who's behind the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, create CMA's. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Further, the appraiser is an unbiased party, with no conditional interest in the value of a home, unlike the agent, whose income is tied to the value of the home.

What can I expect to see in my appraisal report?   (List of questions)

Each appraisal should indicate a credible estimate of value and should clearly state the following:
  • The client and other intended users.
  • The intended use of the appraisal.
  • The appraisal's purpose.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the value opinion.
  • Pertinent property attributes, including: location, physical attributes, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible items.
  • All known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and other items of a similar nature.
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • What was included in the activity of completing the appraisal.
For a more comprehensive view of the work that goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, what guarantee is there that the final number is legitimate?   (List of questions)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
  • The appraisal used an apropos analysis of the data.

  • Whether individually or collectively, there were no major errors contained in the report, nor any relevant details left out.

  • That appraisal services were not executed in a careless or negligent fashion.

  • That a credible, defensible appraisal report was imparted.
To become a state licensed appraiser, we must satisfy considerable education and experience requirements that train us to produce an unbiased opinion. Plus, appraisers must stick to a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for developing an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (List of questions) Licensing and certification requires classroom study, tests and real world experience. Once licensed, he/she is required to complete continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who hires an appraiser?   (List of questions)

Mortgage lenders are an appraiser's typical customer, needing their services to ensure a home involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does an appraiser get the data used to estimate values in Grady County or other areas?   (List of questions)

Compiling information is one of the primary tasks an appraiser engages in. Data can be categorized as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is gathered from a numerous sources. Local Multiple Listing Services (MLS) provide data on recently sold homes that could be used as comparables. Tax records and other public documents reveal actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood servers.

And last but not least, the appraiser assembles general data from his or her past experience in doing assignments for other properties in the same market.

Why do I need a professional appraisal?   (List of questions)

An appraisal is a worthwhile anytime the value of your home is pertinent to a financial decision. For those selling a home, you'll want to figure out the price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from APPRAISAL SERVICES is the best way to ensure assets are divided evenly. Simply put, a house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.

My mortgage statement has an item on it for PMI? Can I get rid of that?   (List of questions)

PMI is short for for Private Mortgage Insurance. It takes care of the lender in the event a borrower is unable to pay on the loan and the market price of the home is less than what the borrower still owes on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

The savings from cancelling the PMI required when you got your mortgage will make up for the cost of the appraisal in no time. Nobody is more qualified than APPRAISAL SERVICES when it comes to analyzing real estate appreciation in Cairo and Grady County. Contact us today.

Should I do anything in advance of the appraisal appointment   (List of questions)

The first step in most appraisals is the home inspection. What this entails is the appraiser, after setting up an appointment, personally going through the home - recording the layout of the rooms, taking photos and documenting the general condition of its features. Inside, make sure it is clutter free and that we can find our way to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of outside walls.

To help speed things along as well as ensure a more accurate report, attempt if possible to have the following items:
  • Any information on the purchase of the property for the last three years.
  • A list of any personal property that is part of the home and you intend to be sold with the home, such as an oven, or a washer and dryer, if applicable.
  • Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
  • Most recent real estate tax bill and or legal description of the property.

What does "Market Value" mean?   (List of questions)

In real estate appraising, Market Value (as opposed to Fair Market Value) is commonly defined as:

"The most probable price (in terms of money) 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 and 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 seller to buyer under conditions whereby: the buyer and seller are typically motivated; both parties are well informed or well advised, and acting in what they consider their best interests; a reasonable time is allowed for exposure in the open market; payment is made in terms of cash in United States dollars or in terms of financial arrangements comparable thereto; and 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."

Does the appraisal belong to the bank or the consumer?   (List of questions)

For mortgage transactions, the lender requests the appraisal, either directly or through a third party. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is certainly entitled to a copy of the report - it's usually bundled with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner engages an appraiser directly. In these situations, the appraiser may state how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.

Are some home improvements more worthwhile than others?   (List of questions)

The added value of a particular amenity truly depends on the local market. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.

No matter where you go, however, renovating a kitchen is almost always a safe move. According to one national survey, kitchen remodels returned an average of 88% of the investment. In other words, a $10,000 kitchen remodeling project would add approximately $8,800 to the value of the home. Bathrooms were second, returning 85%. Adding bedrooms and baths can also help the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size.