Michael Smith Appraisals, Inc has answers to "Frequently Asked Questions"


	Michael Smith Appraisals, Inc is always prepared to address any concerns you might have about appraisals in Floyd County. Contact Michael Smith Appraisals, Inc today to talk about how we can help you with your specific valuation problems.

What is an appraisal?
Describe what an appraiser does
What are the reasons a person would require services from Michael Smith Appraisals, Inc?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Once the report has been completed, what guarantee is there that the value indicated is legitimate?
What does it mean for an appraiser to be licensed?
Who employs appraisers?
Where does an appraiser get the information used to estimate values in Floyd County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
How does an appraiser define "Market Value"?
Who has rights to the appraisal report?
Which home renovations add the most to the price?

What is an appraisal? (List of questions)

An appraisal report is an estimation that concludes with an opinion of value. The real estate appraiser must use a few "approaches," typically three, to come to the estimation of market value. One of the methods in use is the Cost Approach, which finds what it would cost to restore the improvements to the property, minus age and physical dilapidation, adding the land value. Another of the methods is the Sales Comparison Approach - which involves making a comparable analysis to other similar properties within a close vicinity which have recently sold. The Sales Comparison Approach is commonly the most accurate and best indicator of value for a residence. 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 money generated by the property.

Describe what an appraiser does (List of questions)

An appraiser offers a fair and credible determination of market value, often in the context of a real estate exchange. Appraisers document their findings in appraisal reports.

What are the reasons a person would require services from Michael Smith Appraisals, Inc? (List of questions)

There are a lot of reasons to order an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal 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 insurance.
To challenge improperly assessed property taxes.
If you need to take care of an estate.
To provide you a negotiating tool when purchasing real estate.
To determine a likely property value when putting your home on the market.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Because an official agency such as the IRS requires it.
If you are ever involved in a civil case.

For a more detailed explanation of the appraisal process click here.

Is an appraisal the same as a home inspection? (List of questions)

Appraisers do not do provide house inspections and are not home inspectors. The purpose of a home inspection is to evaluate the structure of the house from foundation to attic. Generally, a home inspection report will discuss the amenities and the necessities of the house: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

Is an appraisal the same as a comparative market analysis(CMA)? (List of questions)

Frankly, it's like comparing opera to country. The CMA utilizes market trends to conduct most of their business. Appraisals use comparable sales which are valid resources. The appraisal report will also include neighborhood and building values. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the largest differentiator is who's doing the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, create CMA's. A certified, state licensed professional who bases a career on valuing real estate in and around Floyd County creates the appraisal. Moreover, the appraiser is an unbiased voice, with no conditional interest in the value conclusion, unlike the real estate agent, whose income is tied to the value of the home.

What are the contents of an appraisal report? (List of questions)

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 appraisal.
The purpose of the appraisal.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the value opinion.
Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic attributes, 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 factors.
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 involved in the process of completing the assignment.

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

Once the report has been completed, what guarantee is there that the value indicated is legitimate? (List of questions)

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

That the information analysis utilized in the appraisal was proper.

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

That appraisal services were not rendered in a careless or negligent fashion.

That a trustworthy, substantiated appraisal report was conferred.

There are intense classroom and experience requirements that must be met in order to become a licensed appraiser in Georgia. Plus, appraisers must stick to a strict industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and communicating 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 is commonly associated with many hours of classroom study, tests and experience working under a supervisory appraiser. Once an appraiser is licensed, he or she is required to take continuing education courses so the license remains current. To see the specific requirements for any state click here.

Who employs appraisers? (List of questions)

Mortgage lenders are an appraiser's typical client, requesting their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

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

Gathering information is one of the primary functions of an appraiser. Data can be described as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.

General data is gathered from a many sources. Local Multiple Listing Services (MLS) provide data on recently sold homes that could be used as comparables. Tax records and other public documents reveal actual sales prices in a market. Appraisers often need to report when a property is in a flood zone, and 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 collective knowledge gained from creating appraisals for other houses in the same market.

How can a licensed appraiser help me? (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 doesn't leave your home on the market too long; an appraisal can help with that. When buying, be sure you're not overpaying by commissioning an independent appraisal. For parties settling an estate or divorce, an appraisal from Michael Smith Appraisals, Inc is the best documentation to ensure assets are divided evenly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value means you can make smart financial decisions.

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

PMI is the common abbreviation for for Private Mortgage Insurance. This additional plan guards the lender in the event a borrower is unable to pay on the loan and the market price of the property is less than the loan balance. 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.


	The money you keep from dropping the PMI required when you got your mortgage pays for the appraisal in a matter of months. Nobody is more qualified than Michael Smith Appraisals, Inc when it comes to analyzing real estate appreciation in Rome and Floyd County. Contact us today.

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

We begin with an inspection of the property. 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 features. Inside, make sure it is clutter free and that we can get to things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of exterior walls.

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

A survey or plot map of the property and building (if readily available).
List of personal property to be sold with the home.
Home 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 upgrades, the amount of their purchase and date of their installation (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
Most recent real estate tax bill from Floyd and or legal description of the property.

How does an appraiser define "Market Value"? (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? (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 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 engages an appraiser directly. In these scenarios, 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 do whatever they want with the appraisal.

Which home renovations add the most to the price? (List of questions)

It really depends on the 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 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, returning 85%. Adding bedrooms and baths can also increase 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.