Allstate Appraisal Associates, Inc. has answers to "Frequently Asked Questions"
Allstate Appraisal Associates, Inc. is eager to reply to any questions you might have about appraisals in Iredell County.
Feel free to contact us today.
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The procedure of writing an appraisal report consists of an inspection which forms an opinion of value.
This opinion or estimate is figured by a formal process that commonly uses the three main "common approaches to value".
The Cost Approach is one of the approaches that real estate appraisers use to find the value of a home; it involves figuring what the improvements would cost minus physical depreciation, adding the land value.
The Sales Comparison Approach involves searching for comparable houses nearby and figuring out the value based on making a comparison of those houses to the house being appraised.
Being the most commonly used approach, the Sales Comparison Approach is considered the most precise and best indicator of market value for a house.
The third approach is the Income Approach, which is the best method in appraising income producing properties - it deals with estimating what an investor would pay based on the income produced by the property.
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An appraiser generates an objective and well supported opinion of market value, in the support of real estate transactions.
Appraisers present their professional analysis in appraisal reports.
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There are a lot of reasons to obtain an appraisal from Allstate Appraisal Associates, Inc. with the usual reason being real estate and mortgage transactions.
A few other reasons for getting an report include:
To receive a loan.
If you would like to reduce your property tax obligations.
To show a homeowner has 30% equity and remove insurance.
To fight inflated property taxes.
To settle an estate.
To give you a leg-up when purchasing a home.
To figure out a likely price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS require an appraisal on every home.
If you ever find yourself in a lawsuit.
Click here for a more extensive explanation of the process involved in getting an appraisal.
Home inspectors do not estimate an opinion of value and are not appraisers.
A third-party home inspector will evaluate the structure of the home, from the roof to the foundation.
The standard house inspector's report will contain an evaluation of the integrity of the home'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.
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Honestly, they share nothing in common.
The CMA depends on vague local market trends.
An appraisal utilizes comparable sales that can be validated by public record.
The appraisal report will also include neighborhood and building costs.
All a CMA does is generate a "ball park figure."
Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.
Who's creating the report is hands down the most significant difference between a CMA and an appraisal.
A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts.
The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties.
Moreover, the appraiser is an independent voice, with no conditional interest in the value conclusion, unlike the real estate agent, whose income is tied to the price of the home.
The main point of an appraisal document is to give a value opinion, and depending on the scope of the report, you'll usually see the following:
The client and other intended users.
How the appraisal is supposed to be used.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraiser's opinions and conclusions.(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 description, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible considerations.
Any 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 considered to complete the assignment.
For a more comprehensive look at the work that goes into an appraisal report click here: Sample Appraisal Report
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In communicating an appraisal report, each appraiser must make sure of the following:
That the information analysis implemented in the appraisal was proper.
Whether individually or collectively, there were no grave errors contained in the appraisal, nor any material details left out.
That appraisal services were not executed in a careless or negligent fashion.
The final appraisal report was clear, legitimate and not easily discredited.
There are rigorous classroom and practical experience requirements that must be adhered to in order to become a licensed appraiser in North Carolina.
Likewise, appraisers must follow a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for carrying out an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).
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Most of the time, appraisers are called upon by mortgage lenders to render a value opinion on a house involved in a loan transaction.
Appraisers also provide opinions for legal settlements, tax matters and investment decisions.
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One of the most important things an appraiser does is to gather data.
Data can be described as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.
General data is received from a number of sources.
To research recently sold homes to be used as "comps", an appraiser will often go to the local Multiple Listing Service.
To verify actual sales prices, we research items in the assessor's office and other public documents that are usually online nowadays.
Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood system.
And most importantly, the appraiser gathers general data from his or her collective knowledge gained from doing assignments for other houses in the same market.
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Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps.
When selling your house, 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 house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.
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PMI stands for Private Mortgage Insurance.
PMI takes care of the lender in the event a borrower is unable to pay on the loan and the market price of the house is lower than what is owed on the loan.
You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.
Has your real estate appreciated since you first purchased? Call Allstate Appraisal Associates, Inc. today at 704-902-9790. You may be able to save money by removing your Private Mortgage Insurance premium.
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The first step in most appraisals is the property inspection.
During this process, the appraiser will come to your home and measure it, determine the layout of the rooms inside, confirm all aspects of the home's general condition, and take several photos of your house for inclusion in the report.
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 . Trim any shrubs and move any items that would get in our way while we measure the structure. Indoors, make sure the appraiser can get to 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:
A survey or plot map of the property and building (if readily available).
List of personal property to be sold with the building.
Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .
A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
A list of "suggested" improvements if the property is to be appraised "as complete".
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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."
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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 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 hires an appraiser directly.
In these scenarios, 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 use the appraisal for any purpose.
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A home's location - what city it is in and even what part of that city - is key to this popular question.
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.
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%.
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
