Greg Easter Appraisals LLC. has answers to "Frequently Asked Questions"


	Greg Easter Appraisals LLC. is always happy to answer any inquiries you might have about appraisals or real estate in Jefferson County. Feel free to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
Why would someone request your services?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
After completing the appraisal, how can I have a guarantee that the value conclusion is legitimate?
What goes into an appraiser's certification?
Who do appraisers work for?
Where does Greg Easter Appraisals LLC. get the information used to estimate values in Jefferson 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?
Should I do anything in advance of the appraisal appointment
What does "Market Value" mean?
Once complete, who actually owns 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 is an estimation that concludes with an opinion of value. There are three "common approaches to value" which assists the appraiser come to this opinion or estimate. One of the methods is the Cost Approach - which is how much capital would be required to replace the improvements, minus physical deterioration and other factors, then adding the land value. The Sales Comparison Approach deals with searching for comparable homes in close proximity and discovering the value based on making a comparison of those homes to the home being appraised. The Sales Comparison Approach is commonly the most accurate and best indicator of a liklely sales price for a home. One of the least common approaches in appraising houses is the Income Approach, which is commonly used to figure the market value of a property based on what an investor would pay based on the capital produced by the property.

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

An appraiser offers a professional, unbiased assessment of market value, to be used in making real estate transactions. Appraisers document their findings in appraisal reports.

Why would someone request your services? (Go to list of questions)

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

To obtain 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 high property taxes.
To deal with an estate.
To give you an edge when purchasing a home.
To determine the most probable sales price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS require an appraisal on every property.
It's possible you could have to deal with being in a lawsuit - an appraisal will help.

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

How is an appraisal different than a home inspection? (Go to list of questions)

Appraisers do not do provide house inspections and are not home inspectors. An inspection is a third-party evaluation of the accessible structure and electrical and mechanical systems of a home, from the roof to the foundation. The usual home inspector's report will contain an evaluation of the condition of the property'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.

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

To be honest, they share nothing in common. What the CMA relies upon are vague trends. Appraisals use comparable sales which are valid resources. The appraisal report will also contain area and building prices. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the most significant factor is the person creating the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, generate CMA's. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. 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 previously agreed upon sum for work they perform, regardless of their outcome.

What does the appraisal report contain? (Go to list of questions)

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

The client and whose purposes the appraisal is to serve.
The intended use of the report.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraisal.
Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible factors.
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 used to complete the job.

For a more detailed view of the work that goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, how can I have a guarantee that the value conclusion is legitimate? (Go to list of questions)

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

The appraisal contained an apropos analysis of the information.

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

That appraisal services were not carried out in a careless or negligent manner.

The final appraisal report was understandable, credible and not easily discredited.

There are intense classroom and practical experience requirements that must be met in order to become a licensed appraiser in Alabama. Likewise, appraisers must obey a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The rules for developing an appraisal and reporting its results are insured 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 vary from state to state. However, licensing and certification typically translates to many hours of classroom study, tests and practical experience. Once licensed, he/she is required to take continuing education courses so the license remains up to date. To see the specific requirements for any state click here.

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

Typically, appraisers are employed by lenders to render a value opinion on real estate involved in a loan transaction - to make sure the house is indeed adequate collateral for the loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Greg Easter Appraisals LLC. get the information used to estimate values in Jefferson County or other areas? (Go to list of questions)

Collecting data is one of the main tasks an appraiser does. Data can be divided into Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.

General data is gathered from a numerous places. To look up recently sold homes to be used as "comps", we typically use the local Multiple Listing Service. Tax records and other courthouse documents verify 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 product.

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

Why should I hire a licensed appraiser? (Go to list of questions)

An appraisal is a valuable tool anytime the value of your home is relevant to some financial decision. When selling your home, an appraisal will help you determine the most appropriate price. If you're buying, it makes sure you don't overpay. 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.

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

PMI is an acronym for Private Mortgage Insurance. PMI 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 is owed on the loan. 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 getting rid of the PMI required when you got your mortgage will make up for the cost of the appraisal in a matter of months. Greg Easter Appraisals LLC. stays current with value trends in Birmingham and Jefferson County. Contact us today.

Should I do anything in advance of the appraisal appointment (Go to list of questions)

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 condition of its features. Is there anything you can do to help? Yes there is! First, be sure we have 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 we can easily access items like furnaces and water heaters.

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

A plot plan or survey of the house and land (if readily available).
List of personal property to be sold with the building.
Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
Brag sheet that lists major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
Information on "Homeowners Associations" or condominium covenants and fees.

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."

Once complete, who actually owns the appraisal report? (Go to list of questions)

In most real estate transactions, the appraisal is ordered by the lender. 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 entitled 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 situations, the appraiser may state the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.

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

Like all things real estate, this is dependent on a home's location. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

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%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.