Appraisal Associates of North Georgia has answers to "Frequently Asked Questions"
Appraisal Associates of North Georgia is always ready to handle any concerns you might have about appraisals in Clarke County.
Feel free to contact us today.
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An appraiser performs an estimation that produces an opinion of value.
This opinion or estimate is concluded by a formal method that typically uses three "common approaches to value".
The Cost Approach is one of the approaches that real estate appraisers use to find value; it involves finding what the improvements would cost without physical degradation, plus the land value.
Easily the most common approach in figuring the likely sales price of a home is the Sales Comparison Approach which concerns figuring a comparison to similar properties close by.
Generally speaking, the Sales Comparison Approach is the most accurate indicator of market value of a home.
One of the least common approaches in appraising residential properties is the Income Approach, which is commonly used to figure the value of a property based on what an investor would pay based on the income produced by the property.
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An appraiser forumlates a professional, unbiased opinion of market value, to be used in making real estate transactions.
Appraisers demonstrate their expert analysis in appraisal reports.
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There are many reasons to get an appraisal from Appraisal Associates of North Georgia with the most common reason being real estate and mortgage transactions.
A few other reasons for purchasing an appraisal include:
To get a loan.
To reduce your property taxes.
To help a homeowner realize if they owe less than 80% of their home's value and remove Primary Mortgage Insurance.
To challenge inflated property taxes.
If you need to settle an estate.
To offer you a leg-up when purchasing real estate.
To determine an honest price when selling your home.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS need an appraisal on every home.
It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.
Click here for a more detailed explanation of the process dealing with getting an appraisal.
The appraiser is not a home inspector and he or she does not do a complete home inspection.
A third-party home inspector will inspect the structure of the property, from the roof to the bottom.
Usually, a home inspection report will evaluate the amenities and the requirements of the home: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.
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Frankly, it's like comparing Shakespeare to reality TV.
What the CMA relies upon are superficial trends.
The appraisal is based on specific proven comparable sales.
The appraisal report will also include location and building costs.
A CMA delivers a "ball park figure."
Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.
The person behind the report is actually the most significant difference between a CMA and an appraisal.
A CMA is written 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 real estate in and around Clarke County is behind the appraisal.
Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a flat sum for assignments, regardless of their value conclusion.
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, you'll usually see the following:
Who engaged the appraiser and other intended users.
The intended use of the report.
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.
Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible considerations.
All 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.
What was entailed in the process of completing 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:
The appraisal contained an appropriate analysis of the data.
That critical errors of omission or commission were not committed individually or collectively.
That appraisal services were not executed in a careless or negligent manner.
The final appraisal report was understandable, credible and not easily discredited.
To become a state licensed appraiser, we must satisfy extensive education and experience requirements that enable us to produce an unbiased opinion.
Likewise, appraisers must abide by a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for working up an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).
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Mortgage lenders are an appraiser's most likely client, needing their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan.
Appraisers also provide opinions in litigation cases, tax matters and investment decisions.
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One of the primary activities of an appraiser is to assimilate property data.
Data can be divided into Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.
General data is received from a numerous sources.
Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables.
Tax records and other public documents reveal actual sales prices in a market.
Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood service.
And most importantly, the appraiser assimilates general data from his or her past experience in doing assignments for other properties 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 home, an appraisal will help you determine a price that maximizes profit and reduces time on the market.
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.
Simply put, a house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.
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PMI stands for Private Mortgage Insurance.
This added plan takes care of the lender in the event a borrower defaults on the loan and the market price of the house is lower than what the borrower still owes on the loan.
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.
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 get rid of your Private Mortgage Insurance premium.
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We start with an inspection of the home.
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.
Inside, pick up any clutter and make sure we can get to 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 the inspection go faster and improve the quality of the appraisal report by having the following things on hand:
Written property agreements, such as a maintenance easement for a shared driveway.
Title policy that describes encroachments or easements.
Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .
Brag sheet that lists major home improvements and enhancements, 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 "proposed" improvements if the property is to be appraised "as complete".
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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."
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For mortgage transactions, the lender requests 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 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 scenarios, the appraiser may state 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.
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The added value of a particular amenity truly depends on the local market.
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 weren't far behind, returning 85%.
Adding bedrooms and baths can also boost 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.
