Graham Residential Appraisals Inc has answers to "Frequently Asked Questions"


	Graham Residential Appraisals Inc is always ready to answer any inquiries you might have about appraisals in Rowan County. Don't hesitate to contact us today.

What is an appraisal?
Describe what an appraiser does
What are the reasons I would require your services?
What is the difference between an appraisal and a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What does the appraisal report contain?
Upon completion of the appraisal, how can I have a guarantee that the final number is veritable?
What goes into an appraiser's certification?
Who engages the services of appraisers?
Where does an appraiser get the data used to estimate values in Rowan County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal appointment
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
Which home renovations add the most to the price?

What is an appraisal? (Return to top)

The procedure of creating an appraisal report consists of an estimation which leads to an opinion of value. There are three "common approaches to value" which assists the appraiser conclude this opinion or valuation. One of the methods is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value. Easily the most common approach in finding the value of a house is the Sales Comparison Approach which involves figuring a comparison to similar houses close by. Usually, the Sales Comparison Approach is the most definite indicator of market value of a home. One of the least common approaches in appraising homes is the Income Approach, which is generally used to figure the market value of a property based on what an investor would pay based on the income produced by the property.

Describe what an appraiser does (Return to top)

An appraiser produces an unprejudiced and well substantiated determination of market value, in the support of real estate transactions. Appraisers demonstrate their analysis in appraisal reports.

What are the reasons I would require your services? (Return to top)

There are a lot of reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for getting an appraisal report include:

To get a loan.
To lower your tax burden.
To build a case for a homeowner's equity and remove insurance.
To contest improperly assessed property taxes.
To handle an estate.
To give you an edge 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 home.
It's possible you could be involved in a lawsuit - an appraisal will definitely help.

For a more extensive description of the appraisal process click here.

What is the difference between an appraisal and a home inspection? (Return to top)

The appraiser is not a home inspector and does not do a full home inspection. The point of a home inspection is to investigate the structure of the house from foundation to rooftop. For the most part, a home inspection report will explain the amenities and the requirements of the house: 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 visible structures.

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

Honestly, they share nothing in common. The CMA relies on indefinite trends in the market. The appraisal is reliant on specific proven comparable sales. Area and construction costs are also a priority in an appraisal. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the most significant factor is the person behind the report. A CMA is created by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. The appraisal is created 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 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? (Return to top)

The main point of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:

Who engaged the appraiser and other intended users.
How the appraisal is supposed to be used.
The purpose of the appraisal.
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!)
Relevant property attributes, including: location, physical description, legal attributes, economic factors, the property rights valued, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible factors.
Any 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 involved in the process of completing the assignment.

For a more in depth view of the work that goes into an appraisal report click here: Sample Appraisal Report

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

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:

The appraisal contained an appropriate analysis of the data.

Whether individually or collectively, there were no substantial errors contained in the appraisal, nor any material details left out.

That appraisal services were not carried out in a careless or negligent fashion.

That a trustworthy, defensible appraisal report was conferred.

To become a state licensed appraiser, we must satisfy intense education and experience requirements that prepare us to formulate an unbiased opinion. In addition, appraisers must obey a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The rules for carrying out an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Return to top) Licensing and certification is achieved through coursework, tests and experience working under a supervisor. Once licensed, he or she must then engage in continuing education courses so the license remains current. To see the specific requirements for any state click here.

Who engages the services of appraisers? (Return to top)

Mortgage lenders are an appraiser's typical client, requesting their services to ensure a home involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does an appraiser get the data used to estimate values in Rowan County or other areas? (Return to top)

Compiling information is one of the primary activities of an appraiser. Data can be split into Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specifics are gathered by the appraiser while on site.

General data is collected from a numerous places. To research recent sales to be used as "comps", an appraiser will typically use the local Multiple Listing Service. To double-check actual sales prices, we look at items in the assessor's office and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood service.

And last but not least, the appraiser assimilates general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.

Why do I need a professional appraisal? (Return to 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 determine 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, 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 home is often the single, largest financial asset anybody owns. Knowing its true value means you can make wise financial decisions.

What exactly is PMI and how can I get rid of it? (Return to top)

PMI is the common abbreviation for for Private Mortgage Insurance. PMI covers the lender if a borrower doesn't pay on the loan and the value of the house is lower than the loan balance. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.


	The savings from dropping the PMI required when you got your mortgage pays for the appraisal in no time. Graham Residential Appraisals Inc is in the business of tracking real estate value trends in Salisbury and Rowan County. Contact us today.

Should I do anything in advance of the appraisal appointment (Return to top)

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 features. 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 relocate any items that would make it difficult to measure the structure. Indoors, make sure the appraiser can easily access appliances like furnaces and water heaters.

To help speed things along as well as ensure a more accurate report, try if possible to have the following items:

Any records on the purchase of the property for the last three years.
List of personal property to be sold with the home.
Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
Brag sheet that lists major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
A list of "suggested" improvements when the property is being appraised "as complete".

What is "Market Value?" (Return 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? (Return to top)

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 entitled to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner engages an appraiser directly. In these situations, the appraiser may stipulate 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? (Return to 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

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 increase your value would be painting just for the sake of redecorating.