Piedmont-Appraisers, LLC has answers to "Frequently Asked Questions"
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Piedmont-Appraisers, LLC is always prepared to address any questions you might have about appraisals in York and York County.
Contact us today to learn how we can help solve your valuation problems.
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Define the term "Appraisal"
Describe what an appraiser does
What would cause me to need services from Piedmont-Appraisers, LLC?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
After completing the appraisal, what guarantee is there that the value indicated is accurate?
How are appraisers certified?
Who engages the services of appraisers?
Where does Piedmont-Appraisers, LLC get the information used to estimate values in York County or other areas?
What can a full appraisal do for me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Does the appraiser need anything from me in advance?
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?
Define the term "Appraisal" (Top)
An appraiser performs an estimation that leads to an opinion of value.
The real estate appraiser will use a several "approaches," typically three, to come to the estimation of market value.
One of the methods is the Cost Approach - which is how much it would cost to replace the improvements, less physical deterioration and other factors, plus the land value.
Another of the methods is the Sales Comparison Approach - which concerns making a comparable analysis to other similar nearby properties which have recently sold.
Being the most common approach, the Sales Comparison Approach is generally the most precise and best indicator of market value for a residential property.
One of the least common approaches in appraising homes is the Income Approach, which is mainly used to determine the value of a property based on what an investor would pay based on the capital produced by the building.
Describe what an appraiser does (Top)
An appraiser offers a professional, unbiased opinion of market value, to be used in making real estate transactions.
Appraisers reveal the details of their expert analysis in appraisal reports.
What would cause me to need services from Piedmont-Appraisers, LLC? (Top)
There are many reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions.
A few other reasons for purchasing an appraisal report include:
- If you are applying for a loan.
- To reduce your tax burden.
- To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
- To contest high property taxes.
- To deal with an estate.
- To offer you a leg-up when purchasing real estate.
- To determine a reasonable property value when selling 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 house.
- It's possible you could have to deal with being in a lawsuit - an appraisal will help.
Click here for a more detailed explanation of the process about getting an appraisal.
The appraiser is not a home inspector nor does he/she do a comprehensive home inspection.
A third-party home inspector will investigate the structure of the house, from the top to the foundation.
The standard house inspector's report will include an evaluation of the integrity of the home'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.
What is the difference between an appraisal and a comparative market analysis (CMA)? (Top)
To be blunt, it's like comparing sugar and saccharin.
The CMA utilizes market trends to conduct most of their business.
An appraisal is based on comparable sales that can be validated by public record.
In addition, the appraisal verifies other factors like condition, area and replacement costs.
All a CMA does is generate a "ball park figure."
An appraisal delivers a defensible and carefully documented opinion of value.
Who's creating the report is actually the most significant difference between a CMA and an appraisal.
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.
A certified, South Carolina licensed professional who made a career on valuing real estate in and around York County creates the appraisal.
Moreover, the appraiser is an independent voice, with no vested interest in the property's value, unlike the agent, who gets a commission based upon the value of the home.
The main point of an appraisal document is to provide a value opinion, and depending on the scope of the report, one will customarily see the following:
- The client and whose purposes the appraisal is to serve.
- 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 appraisal.
- 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, trade fixtures 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 activity of completing the job.
For a more in depth look at all that goes into an appraisal report click here: Sample Appraisal Report
After completing the appraisal, what guarantee is there that the value indicated is accurate? (Top)
In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
- That the information analysis utilized in the appraisal was appropriate.
- That crucial errors of omission or commission were not committed individually or collectively.
- That appraisal services were not executed in a careless or negligent fashion.
- That a trustworthy, substantiated appraisal report was imparted.
To become a state licensed appraiser, there are extensive education requirements as well as experience that must be logged - all with the objective of being able to provide unbiased value opinions.
Plus, appraisers must obey a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The rules for working up an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).
(Top)
Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. In general, licensing and certification is commonly associated with many hours of classroom study, tests and practical experience.
Once licensed, he/she must then complete continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.
Who engages the services of appraisers? (Top)
Mortgage lenders are an appraiser's typical client, using their services to ensure property involved in a mortgage transaction is adequate collateral for a loan.
Attorneys and CPAs also hire appraisers for divorce and estate settlements.
Where does Piedmont-Appraisers, LLC get the information used to estimate values in York County or other areas? (Top)
Gathering data is one of the primary occupations of an appraiser.
Data can be divided into Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.
General data is collected from a numerous places.
To find out about recent sales to be used as "comps", we often go to the local Multiple Listing Service.
To verify actual sales prices, we use tax records and other public documents.
Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood system.
And last but not least, the appraiser assembles general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.
What can a full appraisal do for me? (Top)
If you're involved in any kind of financial decision and the value of your home matters, you'll want an appraisal.
When selling your house, an appraisal helps you set a price that maximizes profit and reduces time on the market.
When buying, you can avoid overpaying by getting an independent appraisal.
For those settling an estate or divorce, an appraisal from Piedmont-Appraisers, LLC is the best documentation to ensure assets are split up properly.
Simply put, a house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.
My mortgage statement has an item on it for PMI? Can I get rid of that? (Top)
PMI is the common abbreviation for for Private Mortgage Insurance.
PMI guards the lender in case a borrower doesn't pay on the loan and the value of the house 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.
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The amount you keep from cancelling the PMI required when you got your mortgage pays for the appraisal in no time. Piedmont-Appraisers, LLC is in the business of tracking value trends in York and York County. Contact us today.
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Does the appraiser need anything from me in advance? (Top)
The first step in most appraisals is the home inspection.
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, make sure it is clutter free and that we can access things like furnaces and water heaters. In the yard, trim any landscaping 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.
- Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
- Information on "Homeowners Associations" or condominium covenants and fees.
- A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
- Most recent real estate tax bill from York and or legal description of the property.
What is "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."
Does the appraisal belong to the bank or the consumer? (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 certainly entitled to a copy of the appraisal - 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.
It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage.
In these scenarios, 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 do whatever they want with the appraisal.
How can I get the most ROI out of home improvements? (Top)
The added value of a particular amenity truly depends on the local market.
For example,
adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.
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, yielding 85%.
Adding bedrooms and baths can also help the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.
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