Appraisal Inc. has answers to "Frequently Asked Questions"


	Appraisal Inc. is always prepared to address any questions you might have about appraisals or real estate in Greenville and Pitt County. Contact us today to talk about how we can help solve your specific valuation problems.

Define the term "Appraisal"
Describe what an appraiser does
Why would I request a real estate appraisal?
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?
Once the assignment has been completed, how can I have confidence that the value conclusion is accurate?
What are the requirements to be a certified appraiser?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in Pitt County or other areas?
How can a licensed appraiser help me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
How do I get ready for the appraiser?
Define "Market Value"
Who has rights to the appraisal report?
I want to get more for my house. Where should I spend money renovating?

Define the term "Appraisal" (See list of FAQ's)

An appraiser provides an evaluation that leads to an opinion of value. There are three "common approaches to value" which assists the real estate appraiser arrive at this opinion or estimate. One of the processes in use is the Cost Approach, which is what it would cost to replace the improvements to the property, minus depreciation and physical deterioration, plus the land value. Another of the processes is the Sales Comparison Approach - which concerns finding a comparable analysis to other similar nearby properties which have recently sold. Being the most popular approach, the Sales Comparison Approach is generally the most precise and best indicator of market value for a residence. One of the least common approaches in appraising houses is the Income Approach, which is mainly used to figure the value of a property based on what an investor would pay based on the income produced by the property.

Describe what an appraiser does (See list of FAQ's)

An appraiser offers an unbiased and well substantiated determination of market value, often in the context of a real estate sale. Appraisers demonstrate their professional analysis in appraisal reports.

Why would I request a real estate appraisal? (See list of FAQ's)

There are a lot of reasons to order an appraisal from Appraisal Inc. with the most common reason being real estate and mortgage transactions. Other reasons for getting an report include:

To receive a loan.
To reduce your property taxes.
To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
To fight improperly assessed property taxes.
If you need to take care of an estate.
To offer you a leg-up when purchasing real estate.
To figure out a likely sales price when listing your home.
To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
Because a government agency such as the IRS requires it.
It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.

If you need a more detailed explanation of the appraisal process, please click here.

How is an appraiser different than a home inspector? (See list of FAQ's)

Home inspectors do not produce an opinion of value and are not appraisers. The purpose of a home inspection is to investigate the structure of the house from bottom to rooftop. The standard home inspector's report will contain an evaluation of the integrity of the home's heating system, 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)? (See list of FAQ's)

Simply, they have nothing in common. The CMA depends on vague trends in the market. Appraisals use comparable sales which are verifiable resources. Also, the appraisal checks other factors like condition, location and building 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 largest differentiator is the person doing the report. Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, state licensed professional who bases a career on valuing real estate in and around Pitt County creates the appraisal. Likewise, the agent has a vested interest in the property's selling price - their commission - 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? (See list of FAQ's)

Every appraisal must demonstrate a credible estimate of value and will identify the following:

The client and other intended users.
The intended use of the appraisal.
The appraisal's purpose.
The type of value contained and a definition of that value.
The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible factors.
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.
The scope of work considered to complete the assignment.

For a more detailed look at all that goes into an appraisal report click here: Sample Appraisal Report

Once the assignment has been completed, how can I have confidence that the value conclusion is accurate? (See list of FAQ's)

In communicating an appraisal report, each appraiser must ensure the following:

That the information analysis implemented in the appraisal was suitable.

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

That appraisal services were not conducted in a careless or negligent manner.

The final appraisal report was clear, credible and not easily discredited.

There are rigorous classroom and on the job experience requirements that must be met in order to achieve the designation of "licensed appraiser" in North Carolina. In addition, appraisers must obey a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for working up an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's) Licensing and certification is achieved through coursework, tests and real world experience. Once an appraiser is licensed, he or she is required to take continuing education courses so the license remains up to date. To see the specific requirements for any state click here.

Who are an appraiser's customers? (See list of FAQ's)

Typically, appraisers are called upon by lenders to render a value opinion on a house involved in a loan transaction - to make sure the house is truly adequate collateral for the loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does an appraiser get the information used to estimate values in Pitt County or other areas? (See list of FAQ's)

Collecting information is one of the primary functions of an appraiser. Data can be categorized as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.

General data is received from a variety of places. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood service.

And most importantly, the appraiser assembles general data from his or her past experience in doing assignments for other properties in the same market.

How can a licensed appraiser help me? (See list of FAQ's)

If you're making some sort of financial decision and the value of your home matters, you'll want to hire a licensed appraiser. When selling your home, an appraisal helps you set the most appropriate price. 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. 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? (See list of FAQ's)

PMI is the common abbreviation for for Private Mortgage Insurance. PMI guards the lender in case a borrower is unable to pay on the loan and the market price of the house is less than the balance of the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.


	Did you secure your mortgage with less than 20% down? Call Appraisal Inc. today at (252)355-4742 to see if you can get rid of your Private Mortgage Insurance premium.

How do I get ready for the appraiser? (See list of FAQ's)

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 status of its amenities. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house . Trim any bushes and relocate any items that would make it difficult to measure the structure. On the inside, 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:

A plot plan or survey of the house and land (if available).
List of personal property to be sold with the home.
Most recent real estate tax bill from Pitt and or legal description of the property.
Brag sheet that lists major home improvements and enhancements, the date of their installation and their cost (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

Define "Market Value" (See list of FAQ's)

In real estate appraising, 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? (See list of FAQ's)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. 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 included with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these situations, the appraiser may define 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? (See list of FAQ's)

This really depends on where the home is. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

As a rule, the best ROI from renovating a home comes in the kitchen. 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 weren't far behind, yielding 85%. Adding bedrooms and baths can also increase the value of your home (when done well) as long as your home doesn't then become overbuilt for your neighborhood in terms of size.