Parkway Appraisals has answers to "Frequently Asked Questions"


	Parkway Appraisals is eager to answer any questions you might have about appraisals or real estate in Jefferson and Ashe County. Contact Parkway Appraisals today to talk about how we can help you with your specific valuation problems.

Describe an appraisal
What does an appraiser do?
Why would someone request services from Parkway Appraisals?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What does the appraisal report contain?
Once the assignment is done, what assurance is there that the value conclusion is valid?
How are appraisers certified?
Who do appraisers work for?
Where does Parkway Appraisals get the data 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?
Does the appraiser need anything from me in advance?
Define "Market Value"
Who actually owns the appraisal report?
How can I get the most ROI out of home improvements?

Describe an appraisal (Top)

An appraisal report is an evaluation allowing the appraiser to come to an opinion of value. There are three "common approaches to value" which assists the appraiser conclude this opinion or estimate. One of the methods in use is the Cost Approach, which is what it would cost to replace the improvements to the property, less the age and physical dilapidation, adding the land value. Another of the processes is the Sales Comparison Approach - which deals with finding a comparable analysis to other similar properties within a close proximity which have recently sold. Being the most popular approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a residence. The Income Approach is primarily used for finding the market value of income-producing properties based on what an investor would pay based on the amount of income a property produce.

What does an appraiser do? (Top)

An appraiser offers a fair and credible determination of market value, to be used in making real estate transactions. Appraisers illustate their expert analysis in appraisal reports.

Why would someone request services from Parkway Appraisals? (Top)

There are many reasons to get an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal report include:

If you are applying for a loan.
If you would like to reduce your property tax obligations.
To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
To fight inflated property taxes.
If you need to take care of an estate.
To provide you an edge when purchasing real estate.
To figure out an honest property value when putting your home on the market.
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? (Top)

The appraiser is not a home inspector and does not do a full home inspection. The point of a home inspection is to evaluate the structure of the house from bottom to rooftop. Generally, a home inspection report will evaluate the amenities and the necessities of the property: air conditioning (weather permitting), electrical services, 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 visible structures.

My agent performed a CMA for me. Is that the same as an appraisal? (Top)

Simply put, it's like comparing opera to country. The CMA depends on indefinite local market trends. Appraisals use similar sales which are verifiable resources. In addition, the appraisal checks other factors like condition, neighborhood and construction prices. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the biggest difference is the person behind the report. Real estate agents produce 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 has made a career out of valuing properties. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a previously agreed upon sum for assignments, regardless of their outcome.

What does the appraisal report contain? (Top)

Every report should demonstrate a credible value opinion and will identify the following:

The client and whose purposes the appraisal is to serve.
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 value opinion.(Sometimes this is in the past or maybe the future for new construction!)
Pertinent property characteristics, including: location, physical attributes, 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 factors.
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 while working up the assignment.

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

Once the assignment is done, what assurance is there that the value conclusion is valid? (Top)

In the documentation of an appraisal, each appraiser must ensure the following:

The appraisal used a suitable analysis of the data.

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

That appraisal services were rendered in a careful and conscientious fashion.

The final appraisal report was clear, legitimate and conclusive.

To become a state licensed appraiser, there are extensive education requirements as well as real world experience that must be logged - all with the end goal of gaining the skills required to render unbiased value opinions. In addition, appraisers must follow a strict industry code of ethics and observe national standards of practice for real estate appraisal. The rules for developing an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

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Licensing and certification is achieved through coursework, tests and practical experience. Once licensed, he or she is required to complete continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who do appraisers work for? (Top)

Most of the time, appraisers are hired by lenders to render a value opinion on a home involved in a loan transaction - to make sure the subject is truly adequate collateral for the loan. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does Parkway Appraisals get the data used to estimate values in Ashe County or other areas? (Top)

Gathering data is one of the primary things an appraiser performs. Data can be classified as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.

General data is received from a number of sources. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. To double-check actual sales prices, we research items in the assessor's office and other public documents that are usually online nowadays. Appraisers often have 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 most importantly, the appraiser gathers general data from his or her past experience in creating appraisals for other houses in the same market.

How can a licensed appraiser help me? (Top)

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 figure out the 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 house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.

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

PMI stands for Private Mortgage Insurance. It guards the lender in the event a borrower doesn't pay on the loan and the market price of the property is lower than what the borrower still owes on 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.


	Has your real estate appreciated since you first purchased? Contact Parkway Appraisals today at 336-620-2913 to see if you can cancel your Private Mortgage Insurance premium.

Does the appraiser need anything from me in advance? (Top)

The first step in most appraisals is the home 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. 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 landscaping and relocate any items that would make it difficult to measure the structure. Indoors, make sure we can easily access appliances like furnaces and water heaters.

To help expedite our work as well as ensure a more accurate report, attempt if possible to have the following items:

Records on the latest purchase of the property in the last three years.
Information on any written private easements, such as a shared driveway with a neighbor.
Title policy that lists encroachments or easements.
A list of any major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
Find copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.

Define "Market Value" (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."

Who actually owns the appraisal report? (Top)

For mortgage transactions, the lender orders 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.

This rule doesn't apply when a home owner hires an appraiser directly. In these situations, the appraiser may define the purpose of the appraisal; 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.

How can I get the most ROI out of home improvements? (Top)

Like all things real estate, this is dependent on a home's location. 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 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 were second, returning 85%. Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size.