Allred Appraisals, LLC. has answers to "Frequently Asked Questions"


	Allred Appraisals, LLC. is always more than happy to address any concerns you might have about appraisals or real estate in Lake City and Columbia County. Contact Allred Appraisals, LLC. today to see how we can help you with your valuation problems.

Describe an appraisal
Describe what an appraiser does
What would cause me to require your services?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
After completing the appraisal, what guarantee is there that the value conclusion is veritable?
What are the requirements to be a certified appraiser?
Who employs appraisers?
Where does an appraiser get the information used to estimate values in Columbia County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal appointment
What does "Market Value" mean?
Who has rights to the appraisal report?
I want to get more for my house. Where should I spend money renovating?

Describe an appraisal (Top)

An appraisal report is an investigation that concludes with an opinion of value. There are three "common approaches to value" which assists the appraiser conclude this opinion or valuation. The Cost Approach is one of the approaches that appraisers use to find value; it involves figuring what the improvements would cost minus physical depreciation, plus the land value. Easily the most common approach in finding the likely sales price of a house is the Sales Comparison Approach which deals with figuring a comparison to comparable homes close by. Usually, the Sales Comparison Approach is the most definite indicator of market value of a residential property. One of the least common approaches in appraising residential properties is the Income Approach, which is commonly used to determine the market value of a property based on what an investor would pay based on the income produced by the building.

Describe what an appraiser does (Top)

An appraiser generates an unbiased and well substantiated assessment of market value, often in the context of a real estate exchange. Appraisers reveal the details of their analysis in appraisal reports.

What would cause me to require your services? (Top)

There are a lot of reasons to obtain an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for obtaining an report include:

To obtain a loan.
If you would like to lower your property tax burden.
To help a homeowner realize if they owe less than 80% of their home's value and remove Primary Mortgage Insurance.
To challenge high property taxes.
To deal with an estate.
To offer you a negotiating tool when purchasing a home.
To determine a reasonable price when listing your home.
To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
Government agencies such as the IRS need an appraisal on every property.
If you are ever involved in a lawsuit.

For a more detailed description of the appraisal process click here.

How is an appraiser different than a home inspector? (Top)

Home inspectors do not estimate an opinion of value and do not use the same forms as appraisers. A third-party home inspector will judge the structure of the property, from the top to the bottom. Generally, a home inspection report will evaluate the amenities and the requirements of the house: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

Is an appraisal the same as a comparative market analysis(CMA)? (Top)

To be honest, they share nothing in common. What the CMA relies upon are vague trends. The appraisal relies on similar definite comparable sales. Location and construction costs are also important in an appraisal. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

The credentials of the person creating the report is frankly the most significant difference between a CMA and an appraisal. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat fee for assignments, regardless of their value conclusion.

What does the appraisal report contain? (Top)

Each appraisal should indicate a supported value opinion and must clearly state the following:

The client and other intended users.
The intended use of the report.
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 characteristics, including: location, physical characteristics, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible considerations.
All known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
Division of interest, such as fractional interest, physical segment and partial holding.
The scope of work used while working up the job.

For a more detailed 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 value conclusion is veritable? (Top)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:

That the information analysis contained in the appraisal was appropriate.

That significant errors of omission or commission were not committed individually or collectively.

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

The final appraisal report was clear, legitimate and conclusive.

To become a state licensed appraiser, we must meet extensive education and experience requirements that give us the background to produce an unbiased opinion. In addition, appraisers must abide by a strict industry code of ethics and respect national standards of practice for real estate appraisal. The rules for working up an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Top) Licensing and certification takes classroom study, tests and experience working under a supervisory appraiser. Once an appraiser is licensed, he/she is required to take continuing education courses in order to keep the license current. To see the specific requirements for any state click here.

Who employs appraisers? (Top)

Most of the time, appraisers are employed by mortgage lenders to estimate the value of property involved in a loan transaction. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does an appraiser get the information used to estimate values in Columbia County or other areas? (Top)

One of the main activities of an appraiser is to compile data. Data can be categorized as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.

General data is collected from a number of sources. To research recent sales to be used as "comps", we typically go to the local Multiple Listing Service. Tax records and other public documents reveal actual sales prices in a market. Appraisers often need to report when a property is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And last but not least, the appraiser gathers general data from his or her past experience in creating appraisals for other properties in the same market.

How can a licensed appraiser help me? (Top)

If you're involved in any kind of financial decision and the value of your home is relevant, you'll want an appraisal. For those selling a home, you'll want to determine a price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. When buying, be sure you're not overpaying by commissioning an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. Simply put, a home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

What exactly is PMI and how can I get rid of it? (Top)

PMI is short for for Private Mortgage Insurance. It covers the lender in case a borrower doesn't pay on the loan and the market price of the home is less than what the borrower still owes on the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.


	Is PMI a part of your monthly house payment?Call Allred Appraisals, LLC. today at 3864871484 or send us an e-mail. A new appraisal could save you thousands.

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

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 amenities. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any shrubs and relocate any items that would make it difficult to measure the structure. Indoors, make sure the appraiser can easily access items like furnaces and water heaters.

To help expedite our work plus ensure a more accurate report, try if possible to have the following items:

Information on the latest purchase of the property in the last three years.
List of personal property to be sold with the home.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
A list of "suggested" improvements when the property is being appraised "as complete".

What does "Market Value" mean? (Top)

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."

Who has rights to the appraisal report? (Top)

In most real estate transactions, the appraisal is ordered by the lender. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The buyer is certainly entitled to a copy of the appraisal - 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 cases, the appraiser may state how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can use the appraisal for any purpose.

I want to get more for my house. Where should I spend money renovating? (Top)

It really depends on the market. For example, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!

No matter where you go, however, renovating a kitchen is almost always a safe investment. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms are right up there with kitchens, yielding 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.