Kurt Carlson Appraiser has answers to "Frequently Asked Questions"


	Kurt Carlson Appraiser is always willing to reply to any questions you might have about appraisals in Houston County. Feel free to contact us today.

What is an appraisal?
Describe what an appraiser does
What are the reasons a person would request a real estate appraisal?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What does the appraisal report contain?
After completing the appraisal, what assurance is there that the value conclusion is valid?
What goes into an appraiser's certification?
Who engages the services of appraisers?
Where does Kurt Carlson Appraiser get the information used to estimate values in Houston County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Do you need anything from me in advance?
What is "Market Value?"
Who actually owns the appraisal report?
How can I get the most ROI out of home improvements?

What is an appraisal? (Top)

An appraisal is a thought process leading to an opinion of value. This opinion or estimate is discerned through the use of a formal method that typically utilizes the three main "common approaches to value". One of the processes is the Cost Approach - which is how much it would cost to replace the improvements, less physical deterioration and other factors, then adding the land value. Easily the most common approach in finding the value of a home is the Sales Comparison Approach which concerns concluding a comparison to comparable properties nearby. Being the most commonly used approach, the Sales Comparison Approach is generally the most precise and best indicator of market value for a home. The third approach is the Income Approach, which is the best method in appraising income producing properties - it involves estimating what an investor would pay based on the capital generated by the property.

Describe what an appraiser does (Top)

An appraiser produces a professional, unbiased assessment of market value, often in the context of a real estate sale. Appraisers demonstrate their findings in appraisal reports.

What are the reasons a person would request a real estate appraisal? (Top)

There are many reasons to order an appraisal from Kurt Carlson Appraiser with the usual reason being real estate and mortgage transactions. Other reasons for purchasing an report include:

If you are applying for a loan.
To lower your property taxes.
To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
To challenge inflated property taxes.
To handle an estate.
To provide you a negotiating tool when purchasing real estate.
To figure out an honest 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 home.
If you ever find yourself in a lawsuit.

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

How is an appraisal different than a home inspection? (Top)

Home inspectors do not come to an opinion of value and are not appraisers. A third-party home inspector will judge the structure of the home, from the roof to the bottom. Generally, a home inspection report will explain 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 visible structures.

What is the difference between an appraisal and a comparative market analysis (CMA)? (Top)

Honestly, they share nothing in common. What the CMA depends on are vague trends. The appraisal depends on specific proven comparable sales. The appraisal report will also contain neighborhood and construction prices. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

Who's behind the report is actually the biggest 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. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat fee for assignments, regardless of their outcome.

What does the appraisal report contain? (Top)

The main purpose of an appraisal document 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.
Pertinent property characteristics, including: location, physical characteristics, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible considerations.
Any 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.
The scope of work considered to complete the assignment.

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

After completing the appraisal, what assurance is there that the value conclusion is valid? (Top)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:

The appraisal used a suitable analysis of the information.

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

That appraisal services were rendered in a careful and conscientious fashion.

That a solid, substantiated appraisal report was conferred.

To become a state licensed appraiser, there are education requirements as well as experience that must be attained - all with the objective of gaining the skills required to provide unbiased value opinions. Likewise, appraisers must stick to a strict industry code of ethics and respect national standards of practice for real estate appraisal. The rules for carrying out an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Top) Regulations regarding licensing and certification vary from state to state. However, licensing and certification is most often associated with many hours of classroom study, tests and practical experience. Once licensed, he or she is required to complete continuing education courses so the license remains current. To see the specific requirements for any state click here.

Who engages the services of appraisers? (Top)

Most of the time, appraisers are hired by lenders to render a value opinion on a home 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 Kurt Carlson Appraiser get the information used to estimate values in Houston County or other areas? (Top)

Compiling information is one of the main tasks an appraiser engages in. Data can be categorized 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 while on site.

General data is gathered from a numerous places. To research recently sold homes to be used as "comps", an appraiser will typically use the local Multiple Listing Service. To double-check actual sales prices, we use tax records and other public documents. Appraisers routinely need 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 assimilates general data from his or her collective knowledge gained from doing assignments for other properties in the same market.

Why do I need a professional appraisal? (Top)

An appraisal is a valuable tool whenever your home's value is relevant to a financial decision. For those selling a home, you'll want to determine 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, be sure you're not 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 home 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? (Top)

PMI is the common abbreviation for for Private Mortgage Insurance. This added policy takes care of the lender in case a borrower defaults on the loan and the value of the property is lower than the loan balance. 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 house payment?Call Kurt Carlson Appraiser today at 5073136808 or send us an e-mail. A new appraisal could save you thousands.

Do you need anything from me in advance? (Top)

The first step in most appraisals is the home inspection. What this entails is the appraiser, after setting up an appointment, personally going through the home - recording the layout of the rooms, taking photos and documenting the general status of its amenities. On the home's interior, pick up any clutter and make sure we can find our way to things like furnaces and water heaters. On the outside, 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:

Information on the latest purchase of the property in the last three years.
A list of any personal property that will be left behind and sold with the home, such as an oven, or a washer and dryer, if applicable.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
A list of any 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).
Most recent real estate tax bill 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."

Who actually owns the appraisal report? (Top)

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 certainly 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.

The exception to this rule is when a home owner engages an appraiser directly. 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.

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

The answer to this is different depending upon the location of the home. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.

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 weren't far behind, returning 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.