Cherokee Appraisal has answers to "Frequently Asked Questions"


	Cherokee Appraisal is willing to elaborate on any questions you might have about appraisals or real estate in Cherokee County. Don't hesitate to contact us today.

What is an appraisal?
What does an appraiser do?
Why would someone need services from Cherokee Appraisal?
How is an appraisal different than a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What can I expect to see in my appraisal report?
Upon completion of the report, how can I have certainty that the value indicated is veritable?
What does it mean for an appraiser to be licensed?
Who are an appraiser's customers?
Where does an appraiser get the data used to estimate values in Cherokee 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 inspection
What does "Market Value" mean?
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?

What is an appraisal? (List of questions)

The process of producing an appraisal consists of an investigation which forms an opinion of value. The real estate appraiser must use a several "approaches," typically three, to come to the estimation of market value. One of the processes in use is the Cost Approach, which finds what it would cost to replace the improvements to the property, less the depreciation and physical dilapidation, plus the land value. The Sales Comparison Approach involves searching for comparable homes in close proximity and discerning value based on making a comparison of those homes to the property being investigated. Being the most common approach, the Sales Comparison Approach tends to be the most accurate and best indicator of market value for a house. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it deals with estimating what an investor would pay based on the income produced by the property.

What does an appraiser do? (List of questions)

An appraiser generates an objective and well supported opinion of market value, in the support of real estate exchanges. Appraisers exhibit their professional findings in appraisal reports.

Why would someone need services from Cherokee Appraisal? (List of questions)

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

If you are applying for a loan.
To lower your tax burden.
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.
To deal with an estate.
To offer you a leg-up when purchasing real estate.
To determine a reasonable sales price when selling real estate.
To protect 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.
If you are ever involved in a civil case.

If you need more information regarding the appraisal process, please click here.

How is an appraisal different than a home inspection? (List of questions)

Appraisers do not do provide residential property inspections and are not home inspectors. An inspection is a third-party evaluation of the available structure and mechanical systems of a house, from the top to the bottom. The general home inspector's report will include an evaluation of the integrity of the house's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

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

Frankly, it's like comparing Shakespeare to reality TV. What the CMA relies upon are ill-defined trends. An appraisal relies on comparable sales that can be validated by public record. Area and architectural values are also important in an appraisal. All a CMA does is generate 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 who's doing the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA's. A certified, state licensed professional who has formed a career on valuing homes in and around Cherokee County creates the appraisal. 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 collect only a flat fee for work they perform, regardless of their value conclusion.

What can I expect to see in my appraisal report? (List of questions)

The main point of an appraisal report is to provide a value opinion, and depending on the scope of the report, you'll usually see 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 attributes, including: location, physical attributes, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible considerations.
All 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 appraisal.

For a more comprehensive view of what goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the report, how can I have certainty that the value indicated is veritable? (List of questions)

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

That the information analysis implemented in the appraisal was proper.

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

That appraisal services were provided in a careful and cognizant fashion.

That a trustworthy, supportable appraisal report was communicated.

There are rigorous classroom and real world experience requirements that must be satisfied in order to achieve the title of "licensed appraiser" in Georgia. In addition, appraisers must follow a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for developing an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(List of questions) Regulations regarding licensing and certification vary from state to state. In general, licensing and certification typically translates to many hours of classroom study, tests and real world experience. Once licensed, he or she is required to engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who are an appraiser's customers? (List of questions)

Commonly, appraisers are called upon by mortgage lenders to render a value opinion on property involved in a loan transaction - to make sure the house is truly adequate collateral for the loan. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does an appraiser get the data used to estimate values in Cherokee County or other areas? (List of questions)

One of the main things an appraiser does is to gather property data. Data can be classified as either 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 gathered from a variety of 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. 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 service.

And most importantly, the appraiser assembles general data from his or her past experience in creating appraisals for other properties in the same market.

Why do I need a professional appraisal? (List of questions)

An appraisal is a worthwhile whenever the value of your home is relevant to a financial decision. When selling your home, an appraisal helps you set a price that maximizes profit and reduces time on the market. When buying, be sure you're not overpaying by getting an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making wise financial decisions.

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

PMI is short for for Private Mortgage Insurance. It protects the lender if a borrower defaults on the loan and the market price of the home is less 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.


	Is PMI a part of your monthly mortgage payment?Call Cherokee Appraisal today at 770-720-4499 or send us an e-mail. Documentation of your home's present value could save you thousands.

Should I do anything in advance of the appraisal inspection (List of questions)

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. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and move any items that would make it difficult to measure the structure. Indoors, make sure the appraiser can easily access items like furnaces and water heaters.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:

Any records on the purchase of the property for the last three years.
List of personal property to be sold with the building.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
Brag sheet that lists major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
A list of "suggested" improvements when the property is being appraised "as complete".

What does "Market Value" mean? (List of questions)

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 has rights to the appraisal report? (List of questions)

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 report - 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.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these cases, the appraiser may define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can use the appraisal for any purpose.

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

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 most value returned from renovating a home comes in the kitchen. 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 weren't far behind, yielding 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.