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Parkway Appraisals has answers to "Frequently Asked Questions"

Parkway Appraisals is eager to reply to any inquiries you might have about appraisals or real estate in Jefferson and Ashe County. Feel free to contact us today.

Define the term "Appraisal"
What does an appraiser do?
What are the reasons I would request services from Parkway Appraisals?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
Upon completion of the appraisal, how can I have assurance that the final number is veritable?
How hard is it to become certified?
Who do appraisers work for?
Where does an appraiser get the information used to estimate values in Ashe County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
Define "Market Value"
Does the appraisal belong to the bank or the consumer?
Which home renovations add the most to the price?

Define the term "Appraisal"   (Back to top)

An appraisal is an evaluation that concludes with an opinion of value. The appraiser will typically use a number of "approaches," typically three, to arrive at the estimation of market value. The Cost Approach is one of the approaches that appraisers use to find the value of a home; it involves concluding what the improvements would cost without physical degradation, adding the land value. Another of the processes is the Sales Comparison Approach - which involves discovering a comparison to other similar properties within a close vicinity which have recently sold. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a house. One of the least common approaches in appraising homes is the Income Approach, which is commonly used to find the value of a property based on what an investor would pay based on the income produced by the property.

What does an appraiser do?   (Back to top)

An appraiser offers a professional, unbiased assessment of market value, often in the context of a real estate purchase. Appraisers summarize their conclusions in appraisal reports.

What are the reasons I would request services from Parkway Appraisals?   (Back to top)

There are many reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for ordering an report include:
  • If you are applying for a loan.
  • If you would like to lower your property tax obligations.
  • To show a homeowner has 30% equity and remove PMI.
  • To challenge inflated property taxes.
  • If you need to take care of an estate.
  • To provide you a negotiating tool when purchasing real estate.
  • To determine an honest property value when selling real estate.
  • 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 property.
  • If you are ever involved in a lawsuit.
Click here for a more detailed explanation of the process dealing with getting an appraisal.

Is an appraisal the same as a home inspection?   (Back to top)

Home inspectors do not generate an opinion of value and do not use the same forms as appraisers. The point of a home inspection is to evaluate the structure of the home from basement to top. The stereotypical property inspector's report will include an evaluation of the condition of the property's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

Is an appraisal the same as a comparative market analysis(CMA)?   (Back to top)

Honestly, they have nothing in common. What the CMA depends on are vague trends. The appraisal is based on specific proven comparable sales. Also, the appraisal looks at other factors like condition, area and construction prices. 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.

But the largest differentiator is who's creating the report. 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 created by a licensed, certified professional who makes a living out of valuing properties. Moreover, the appraiser is an unbiased voice, with no conditional interest in the property's value, unlike the agent, who gets a commission based upon the price of the home.

What does the appraisal report contain?   (Back to top)

Every report must demonstrate a supported value opinion and should clearly state the following:
  • Who engaged the appraiser 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 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 characteristics, 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 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 entailed in the activity of completing the appraisal.
For a more comprehensive view of all that goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, how can I have assurance that the final number is veritable?   (Back to top)

In communicating an appraisal report, each appraiser must ensure the following:
  • The appraisal contained a suitable analysis of the information.

  • 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 transparent, legitimate and conclusive.
To become a state licensed appraiser, we must fulfill intense education and experience requirements that enable us to formulate an unbiased opinion. Likewise, appraisers must follow a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for working up an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

   (Back to top) Licensing and certification is achieved through classroom study, tests and practical experience. Once an appraiser is licensed, he/she must then complete continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who do appraisers work for?   (Back to top)

Most of the time, appraisers are called upon by 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.

Where does an appraiser get the information used to estimate values in Ashe County or other areas?   (Back to top)

Compiling information is one of the main tasks an appraiser engages in. Data can be categorized as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.

General data is collected from a number of sources. To research recently sold homes to be used as "comps", we often use the local Multiple Listing Service. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers often need to report when a property is 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 gathers general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.

How can a licensed appraiser help me?   (Back to top)

If you're making some sort of financial decision and the value of your home matters, you'll want an appraisal. If you're selling your home, an appraisal assists you in setting the most appropriate price. When buying, you can avoid overpaying by commissioning an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A house 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?   (Back to top)

PMI is an acronym for Private Mortgage Insurance. It guards the lender if a borrower defaults on the loan and the market price of the property 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 amount you keep from dropping your PMI will make up for the price of the appraisal in no time. Nobody is more qualified than Parkway Appraisals when it comes to analyzing real estate appreciation in Jefferson and Ashe County. Contact us today.

How do I get ready for the appraiser?   (Back to top)

The first step in most appraisals is the property inspection. During this process, we 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. Inside, pick up any clutter and make sure we can access things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of exterior walls.

You can make our visit go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • A plot plan or survey of the house and land (if readily available).
  • Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
  • Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
  • A list of "proposed" improvements if the property is to be appraised "as complete".

Define "Market Value"   (Back to top)

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."

Does the appraisal belong to the bank or the consumer?   (Back to top)

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 report - 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.

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

Which home renovations add the most to the price?   (Back to top)

This really depends on where the home is. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 are right up there with kitchens, yielding 85%. Adding bedrooms and baths can also help the value of your home (when done well) as long as your home doesn't then become an oddball for your neighborhood in terms of size.