Appraisal Associates of North Georgia has answers to "Frequently Asked Questions"
Appraisal Associates of North Georgia is prepared to answer any concerns you might have about appraisals in Clarke County.
Contact Appraisal Associates of North Georgia today to learn how we can help you with your valuation problems.
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An appraisal report is a thought process allowing the appraiser to come to an opinion of value.
The appraiser will use a few "approaches," typically three, to conclude the estimation of market value.
One of them is the Cost Approach - which is how much capital would be required to replace the improvements, minus physical deterioration and other factors, plus the land value.
Another of the approaches is the Sales Comparison Approach - which deals with making a comparable analysis to other similar properties within a close proximity which have recently sold.
The Sales Comparison Approach is commonly the most accurate and best indicator of 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 income a property would bring in.
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An appraiser forumlates an objective and well substantiated assessment of market value, often in the context of a real estate purchase.
Appraisers reveal the details of their professional conclusions in appraisal reports.
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There are a lot of reasons to obtain an appraisal with the most common reason being real estate and mortgage transactions.
Other reasons for obtaining an report include:
To get a loan.
If you would like to reduce your property tax obligations.
To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
To challenge improperly assessed property taxes.
To settle an estate.
To offer you an edge when purchasing a home.
To find a reasonable sales price when putting your home on the market.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS need an appraisal on every house.
If you are ever involved in a civil case.
If you need more information regarding the appraisal process, please click here.
Appraisers do not do provide home inspections and are not home inspectors.
A third-party home inspector will evaluate the structure of the property, from the roof to the foundation.
The archetypal house inspector's report will contain an evaluation of the condition of the house'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.
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Frankly, they have nothing in common.
The CMA relies on indistinct local market trends.
An appraisal is based on comparable sales that can be verified by public record.
Also, the appraisal verifies other factors like condition, area and replacement costs.
The CMA will provide a non-specific figure.
Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.
But the biggest difference 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.
A certified, Georgia licensed professional who bases a career on valuing homes in and around Clarke County is behind the appraisal.
Moreover, the appraiser is an independent party, with no conditional interest in the value of a home, unlike the real estate agent, whose income is tied to the value of the home.
The main objective of an appraisal report is to provide a value opinion, and depending on the scope of the report, one will customarily see the following:
Who engaged the appraiser and whose purposes the appraisal is to serve.
The intended use of the report.
The appraisal's purpose.
The type of value contained and a definition of that value.
The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
Pertinent property attributes, including: location, physical characteristics, legal attributes, economic attributes, 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 other items of a similar nature.
Division of interest, such as fractional interest, physical segment and partial holding.
What was included in the process of completing the appraisal.
For a more comprehensive look at the work that goes into an appraisal report click here: Sample Appraisal Report
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In the documentation of an appraisal, each appraiser must make sure of the following:
That the information analysis implemented in the appraisal was appropriate.
Whether individually or collectively, there were no crucial errors contained in the appraisal, nor any material details left out.
That appraisal services were not rendered in a careless or negligent manner.
That a solid, defensible appraisal report was conferred.
To become a state licensed appraiser, we must satisfy considerable education and experience requirements that train us to formulate an unbiased opinion.
In addition, appraisers must stick to a strict industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for working up an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).
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Commonly, appraisers are called upon by lenders to estimate the value of a house involved in a loan transaction - to make sure the house is indeed adequate collateral for the loan.
Appraisers also provide opinions for legal settlements, tax matters and investment decisions.
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One of the most important activities of an appraiser is to gather data.
Data can be categorized as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.
General data is received from a many places.
To look up recent sales to be used as "comps", an appraiser will often go to the local Multiple Listing Service.
Tax records and other public documents verify actual sales prices in a market.
Appraisers routinely have to report when a property is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.
And most importantly, the appraiser assembles general data from his or her past experience in creating appraisals for other houses in the same market.
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An appraisal is a valuable tool whenever your home's value is relevant to some financial decision.
For those selling a home, you'll want to determine a price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that.
If you're buying, it makes sure you don't overpay.
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.
This supplemental policy covers the lender in the event a borrower is unable to pay on the loan and the market price of the house is less than the loan balance.
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.
Did you have less than 20% to put down on your mortgage? Call Appraisal Associates of North Georgia today at 706-546-7196 to see if you can cancel your Private Mortgage Insurance payment.
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We begin with an inspection of the property.
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.
On the home's interior, pick up any clutter and make sure we can access things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of outside walls.
The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
Records on the latest purchase of the property in the last three years.
Information on any written private agreements, such as a shared driveway with a neighbor.
Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
Brag sheet that lists major home improvements and enhancements, 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 copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
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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 orders the appraisal, either directly or through a third party.
While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The
buyer is entitled to a copy of the appraisal - it's usually included 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 engages 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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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 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, returning 85%.
On the contrary, something that may not increase your value would be painting just for the sake of redecorating.
