Woods Appraisal, LLC has answers to "Frequently Asked Questions"


	Woods Appraisal, LLC is prepared to talk to you about any inquiries you might have about appraisals or real estate in De Kalb County. Contact us today to see how we can help you with your specific valuation problems.

Define the term "Appraisal"
Describe what an appraiser does
Why would I require a real estate appraisal?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What are the contents of an appraisal report?
Once the assignment is done, what guarantee is there that the value indicated is valid?
How are appraisers certified?
Who do appraisers work for?
Where does Woods Appraisal, LLC get the data used to estimate values in De Kalb 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?
Do you need anything from the homeowner in advance?
What does "Market Value" mean?
Who has rights to the appraisal report?
I want to get more for my house. Where should I spend money renovating?

Define the term "Appraisal" (Go to list of questions)

An appraisal report is a thought process that concludes with an opinion of value. This opinion or estimate is arrived at through a formal method that commonly utilizes three "common approaches to value". 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. The Sales Comparison Approach deals with searching for similar properties in the vicinity and figuring out the value based on making a comparison of those properties to the house being appraised. The Sales Comparison Approach is normally the most definitive and best indicator of value for a residence. The Income Approach is generally used for determining the market value of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in.

Describe what an appraiser does (Go to list of questions)

An appraiser offers a professional, unbiased determination of market value, often in the context of a real estate exchange. Appraisers document their expert investigation in appraisal reports.

Why would I require a real estate appraisal? (Go to list of questions)

There are many reasons to purchase an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal report include:

If you are applying for a loan.
To reduce your property taxes.
To show a homeowner has 30% equity and remove insurance.
To challenge improperly assessed property taxes.
To deal with an estate.
To give you a negotiating tool when purchasing real estate.
To figure out a likely 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 require an appraisal on every house.
It's possible you could be involved in a lawsuit - an appraisal will definitely help.

Click here for a more detailed explanation of the process about getting an appraisal.

How is an appraiser different than a home inspector? (Go to list of questions)

The appraiser is not a home inspector and he or she does not do a comprehensive 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 discuss the amenities and the requirements of the house: 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, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

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

Honestly, they share nothing in common. What the CMA relies upon are superficial trends. The appraisal depends on specific verifiable comparable sales. The appraisal report will also include neighborhood and building prices. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

The person creating the report is hands down the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, generate CMA's. A certified, Alabama licensed professional who bases their livelihood on valuing properties in and around De Kalb County creates the appraisal. Moreover, the appraiser is an independent voice, with no vested interest in the value conclusion, unlike the real estate agent, who gets a commission based upon the value of the home.

What are the contents of an appraisal report? (Go to list of questions)

Each appraisal must indicate a credible estimate of value and should document the following:

The client and whose purposes the appraisal is to serve.
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 value opinion.(Sometimes this is in the past or maybe the future for new construction!)
Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic factors, the property rights in question, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible items.
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.
The scope of work considered while working up the job.

For a more detailed look at what goes into an appraisal report click here: Sample Appraisal Report

Once the assignment is done, what guarantee is there that the value indicated is valid? (Go to list of questions)

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

The appraisal used an appropriate analysis of the information.

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

That appraisal services were provided in a careful and conscientious manner.

That a trustworthy, substantiated appraisal report was communicated.

There are intense classroom and on the job experience requirements that must be satisfied in order to become a licensed appraiser in Alabama. Plus, appraisers must stick to a strict industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for working up an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Go to list of questions) 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 coursework, tests and real world experience. Once an appraiser is licensed, he or she is required to take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who do appraisers work for? (Go to list of questions)

Most of the time, appraisers are hired by mortgage lenders to estimate the value of a home involved in a loan transaction - to make sure the subject is indeed adequate collateral for the loan. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does Woods Appraisal, LLC get the data used to estimate values in De Kalb County or other areas? (Go to list of questions)

Gathering information is one of the primary tasks an appraiser engages in. Data can be classified as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.

General data is collected from a number of places. To research recent sales to be used as "comps", we typically go to the local Multiple Listing Service. Tax records and other public documents verify actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood servers.

And last but not least, the appraiser assimilates general data from his or her past experience in creating appraisals for other houses in the same market.

What can a full appraisal do for me? (Go to list of questions)

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 figure out a price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. When buying, you can avoid overpaying by getting an independent appraisal. For people settling an estate or divorce, an appraisal from Woods Appraisal, LLC is the best way to ensure assets are divided properly. A house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

My mortgage statement has an item on it for PMI? Can I get rid of that? (Go to list of questions)

PMI is short for for Private Mortgage Insurance. It takes care of the lender in case a borrower doesn't pay on the loan and the market price of the property is less than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Did you secure your mortgage with less than 20% down? Call Woods Appraisal, LLC today at 2568457910. You may be able to cancel your Private Mortgage Insurance payment.

Do you need anything from the homeowner in advance? (Go to list of questions)

The first step in most appraisals is the home inspection. During this process, we 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, make sure it is clutter free and that we can find our way to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of exterior walls.

To help expedite our work as well as ensure a more accurate report, attempt if possible to have the following items:

Records on the latest purchase of the property in the last three years.
Written property agreements, such as a maintenance agreement for a shared driveway.
Title policy that describes encroachments or easements.
A list of any 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 copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

What does "Market Value" mean? (Go to list of questions)

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."

Who has rights to the appraisal report? (Go to 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 certainly entitled to a copy of the appraisal - it's usually included with all the other closing documents - but is not entitled 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 cases, 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 use the appraisal for any purpose.

I want to get more for my house. Where should I spend money renovating? (Go to list of questions)

A home's location - what city it is in and even what part of that city - is key to this popular question. 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, returning 85%. On the contrary, work that may not add value would be painting just for the sake of redecorating.