Allstate Appraisal Associates, Inc. has answers to "Frequently Asked Questions"
Allstate Appraisal Associates, Inc. is prepared to answer any concerns you might have about appraisals or real estate in Mooresville and Iredell County.
Feel free to contact us today.
(List of questions)
An appraiser provides an estimation that generates an opinion of value.
The appraiser will use a few "approaches," typically three, to draw up the estimation of market value.
One of the three is the Cost Approach - which is what it would cost to replace the improvements, less physical deterioration and other factors, then adding the land value.
The most common approach in figuring the value of a house is the Sales Comparison Approach which concerns figuring a comparison to comparable houses close by.
Being the most popular approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a house.
The Income Approach is primarily used for determining the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.
(List of questions)
An appraiser generates a fair and credible determination of market value, in the support of real property transactions.
Appraisers reveal the details of their professional analysis in appraisal reports.
(List of questions)
There are many reasons to get an appraisal with the usual reason being real estate and mortgage transactions.
Some other reasons for getting an appraisal report include:
To obtain a loan.
To reduce your property taxes.
To show a homeowner has 30% equity and remove PMI.
To challenge inflated property taxes.
If you need to settle an estate.
To offer you a negotiating tool when purchasing real estate.
To find an honest 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 require an appraisal on every house.
If you are ever involved in a lawsuit.
For a more extensive description of the appraisal process click here.
The appraiser is not a home inspector and he or she does not do a complete home inspection.
A third-party home inspector will judge the structure of the home, from the roof to the bottom.
Commonly, a home inspection report will discuss the amenities and the necessities of the home: 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, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.
(List of questions)
Frankly, they share nothing in common.
The CMA uses market trends to create most of their business.
Appraisals use comparable sales which are verifiable resources.
Also, the appraisal checks other factors like condition, neighborhood and construction costs.
The CMA will provide a non-specific figure.
Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
The person behind the report is hands down the biggest difference between a CMA and an appraisal.
Real estate agents produce CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation.
The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties.
Further, the appraiser is an independent party, with no conditional interest in the value conclusion, unlike the real estate agent, who gets a commission based upon the price of the home.
The main point of an appraisal report is to let the reader know the value of the real estate in question, and depending on the scope of the report, you'll usually see the following:
Who engaged the appraiser 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.
Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations 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.
What was entailed in the process of completing the assignment.
For a more detailed look at all that goes into an appraisal report click here: Sample Appraisal Report
(List of questions)
In communicating an appraisal report, each appraiser must ensure the following:
That the information analysis contained in the appraisal was suitable.
That grave errors of omission or commission were not committed individually or collectively.
That appraisal services were rendered in a careful and conscientious manner.
That a trustworthy, substantiated appraisal report was imparted.
There are rigorous classroom and real world experience requirements that must be met in order to become a licensed appraiser in North Carolina.
Plus, appraisers must obey a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for carrying out an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).
(List of questions)
Mortgage lenders are an appraiser's typical customer, needing their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default.
Appraisers also provide opinions for legal settlements, tax matters and investment decisions.
(List of questions)
One of the most important tasks an appraiser performs is to collect data.
Data can be categorized as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.
General data is received from a variety of places.
Local Multiple Listing Services (MLS) provide information on recently sold homes that might be used as comparables.
To double-check actual sales prices, we use items in the assessor's office and other public documents that are usually online nowadays.
Appraisers routinely have to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.
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.
(List of questions)
Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps.
For those selling a home, you'll want to determine a price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that.
When buying, you can avoid overpaying by getting an independent appraisal.
For those settling an estate or divorce, an appraisal from Allstate Appraisal Associates, Inc. is the best way to ensure assets are split up properly.
Simply put, a home is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.
(List of questions)
PMI stands for Private Mortgage Insurance.
This supplementary policy guards the lender if a borrower doesn't pay on the loan and the market price of the house is less than the balance of the loan.
You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.
Did you secure your mortgage with less than 20% down? Call Allstate Appraisal Associates, Inc. today at 704-902-9790 to see if you can save money by removing your Private Mortgage Insurance premium.
(List of questions)
We begin with an inspection of the home.
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 we have easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and relocate any items that would make it difficult to measure the structure. On the inside, make sure we can easily access appliances like furnaces and water heaters.
The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
Written property agreements, such as a maintenance agreement for a shared driveway.
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.
Information on "Homeowners Associations" or condominium covenants and fees.
Brag sheet that lists major home improvements and upgrades, 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 bill for your most recent real estate taxes which should also contain a legal description of the property.
(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."
(List of questions)
In most real estate transactions, the appraisal is ordered by the lender.
Even though it's the buyer that eventually pays for the report, the lender is the intended user. The
buyer is entitled to a copy of the appraisal - it's usually bundled with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.
This rule doesn't apply when a home owner hires an appraiser directly.
In these cases, the appraiser may stipulate 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.
(List of questions)
A home's location - what city it is in and even what part of that city - is key to this popular question.
For example,
while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes
As a rule, the most value returned from renovating a home comes in the kitchen.
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 weren't far behind, returning 85%.
On the contrary, something that may not add value would be painting just for the sake of redecorating.
Allstate Appraisal Associates, Inc. Post Office Box 1829 Mooresville, NC 28115
