AJC Appraisals LLC has answers to "Frequently Asked Questions"


	AJC Appraisals LLC is ready to talk to you about any questions you might have about appraisals or real estate in Lafayette County. Contact AJC Appraisals LLC today to talk about how we can help you with your valuation problems.

Describe an appraisal
Describe what an appraiser does
Why would a person require a real estate appraisal?
What is the difference between an appraisal and a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
Once the appraisal has been delivered, what guarantee is there that the value conclusion is accurate?
How are appraisers certified?
Who hires AJC Appraisals LLC
Where does AJC Appraisals LLC get the information used to estimate values in Lafayette County or other areas?
Why should I hire a licensed appraiser?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Do you need anything from me in advance?
Define "Market Value"
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?

Describe an appraisal (List of questions)

The appraisal process is an estimation that produces an opinion of value. This opinion or estimate is found through a formal process that usually uses three "common approaches to value". One of the methods in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the home, minus depreciation and physical deterioration, plus the land value. The Sales Comparison Approach deals with finding similar homes in the vicinity and figuring out the value based on comparing those properties to the home being investigated. The Sales Comparison Approach is commonly the most definitive and clearest indicator of value for a house. One of the least common approaches in appraising residential properties is the Income Approach, which is generally used to determine the value of a property based on what an investor would pay based on the capital produced by the property.

Describe what an appraiser does (List of questions)

An appraiser forumlates a fair and credible opinion of market value, in the support of real property transactions. Appraisers reveal the details of their conclusions in appraisal reports.

Why would a person require a real estate appraisal? (List of questions)

There are many reasons to order an appraisal with the most common reason being real estate and mortgage transactions. Some other reasons for ordering an appraisal report include:

To obtain a loan.
If you would like to lower your property tax burden.
To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
To challenge improperly assessed property taxes.
If you need to settle an estate.
To offer you a negotiating tool when purchasing real estate.
To figure out a likely property value when selling your home.
To ensure parties are provided just compensation in eminient domain cases.
Because a government agency such as the IRS requires it.
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 of getting an appraisal.

What is the difference between an appraisal and a home inspection? (List of questions)

Home inspectors do not come to an opinion of value and do not do appraisal reports. An inspection is a third-party investigation of the accessible structure and systems of a house, from the top to the foundation. Generally, a home inspection report will discuss the amenities and the necessities of the home: air conditioning (weather permitting), electrical services, 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 other visible structures.

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

Frankly, they share nothing in common. The CMA uses market trends to create most of their business. The appraisal depends on specific definite comparable sales. Area and architectural values are also precedent in an appraisal. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the most significant factor is who's creating the report. Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, state licensed professional who bases their livelihood on valuing real estate in and around Lafayette County is behind the appraisal. Likewise, the agent has a vested interest in 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 value conclusion.

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

The main purpose 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 whose purposes the appraisal is to serve.
The intended use of the appraisal.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraiser's opinions and conclusions.
Characteristics of the property that have a bearing on the value, including: location, physical description, 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 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.
What was entailed in the activity of completing the appraisal.

For a more comprehensive look at all that goes into an appraisal report click here: Sample Appraisal Report

Once the appraisal has been delivered, what guarantee is there that the value conclusion is accurate? (List of questions)

In communicating an appraisal report, each appraiser must make sure of the following:

The appraisal contained an appropriate analysis of the information.

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

That appraisal services were done in a careful and judicious fashion.

That a credible, substantiated appraisal report was communicated.

To become a state licensed appraiser, there are extensive education requirements as well as real world experience that must be logged. Likewise, appraisers must follow a strict 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 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 most often associated with many hours of coursework, tests and real world experience. Once an appraiser is licensed, he/she is required to complete continuing education courses so the license remains current. To see the specific requirements for any state click here.

Who hires AJC Appraisals LLC (List of questions)

Commonly, appraisers are hired by mortgage lenders to render a value opinion on a home involved in a loan transaction - to make sure the subject is indeed adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does AJC Appraisals LLC get the information used to estimate values in Lafayette County or other areas? (List of questions)

One of the main activities of an appraiser is to assimilate property data. Data can be described as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser while on site.

General data is received from a variety of places. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. To verify actual sales prices, we use items in the assessor's office and other public documents that are usually online nowadays. Appraisers routinely 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 gathers general data from his or her collective knowledge gained from doing assignments for other houses in the same market.

Why should I hire a licensed appraiser? (List of questions)

An appraisal is a worthwhile anytime the value of your home is pertinent to some financial decision. When selling your house, an appraisal helps you set a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from AJC Appraisals LLC is the best documentation to ensure assets are 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? (List of questions)

PMI is the common abbreviation for for Private Mortgage Insurance. This supplemental policy guards the lender in case a borrower is unable to pay on the loan and the market price of the home is lower 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.


	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 AJC Appraisals LLC when it comes to analyzing real estate appreciation in Lafayette and Lafayette County. Contact us today.

Do you need anything from me in advance? (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. 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 exterior walls.

You can make things go faster and improve the quality of the appraisal report by having the following things on hand:

Any information on the purchase of the property for the last three years.
Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
Locate copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
A list of "proposed" improvements when the property is being appraised "as complete".

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 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 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 hiring the appraiser for things outside securing a mortgage. In these cases, the appraiser may define how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can use the appraisal for any purpose.

Are some home improvements more worthwhile than others? (List of questions)

This really depends on where the home is. For example, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!

No matter where you go, however, renovating a kitchen is almost always a safe move. 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 weren't far behind, returning 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.