Florida Appraisal Group, INC has answers to "Frequently Asked Questions"


	Florida Appraisal Group, INC is always eager to talk to you about any concerns you might have about appraisals in Clearwater and Pinellas County. Don't hesitate to contact us today.

What is an appraisal?
What does an appraiser do?
What would cause me to request a real estate appraisal?
Is an appraisal the same as a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What does the appraisal report contain?
Once the report is done, how can I have confidence that the value indicated is veritable?
What are the requirements to be a certified appraiser?
Who hires an appraiser?
Where does Florida Appraisal Group, INC get the data used to estimate values in Pinellas 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 the homeowner in advance?
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?

What is an appraisal? (List of questions)

An appraiser provides an estimation that produces an opinion of value. The real estate appraiser will use a several "approaches," typically three, to conclude the estimation of market value. One of the three is the Cost Approach - which is how much it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value. The most common approach in finding the value of a house is the Sales Comparison Approach which deals with figuring a comparison to comparable houses nearby. Being the most popular approach, the Sales Comparison Approach is generally the most precise and best indicator of market value for a property. The Income Approach is mainly 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.

What does an appraiser do? (List of questions)

An appraiser produces an objective and well justified opinion of market value, in the support of real property transactions. Appraisers document their professional findings in appraisal reports.

What would cause me to request a real estate appraisal? (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 ordering an appraisal include:

If you are applying for a loan.
If you would like to lower your property tax obligations.
To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
To contest inflated property taxes.
To deal with an estate.
To give you an edge when purchasing a home.
To determine a reasonable sales price when listing your home.
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.
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.

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

Appraisers do not do provide house inspections and are not home inspectors. An inspection is a third-party investigation of the available structure and appliances of a home, from the top to the foundation. For the most part, 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 integrity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

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

Simply put, it's apples and oranges. The CMA depends on indefinite market trends. An appraisal utilizes comparable sales that can be validated by public record. Location and building costs are also important in an appraisal. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the largest differentiator is the person behind the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, create CMA's. A certified, state licensed professional who has formed their livelihood on valuing properties in and around Pinellas County creates the appraisal. Further, the appraiser is an independent party, with no vested interest in the value of a home, unlike the agent, who gets a commission based upon the value of the home.

What does the appraisal report contain? (List of questions)

The main purpose of an appraisal report is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:

The client and whose purposes the appraisal is to serve.
The intended use of the appraisal.
The reason for the appraisal.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraisal.
Pertinent property attributes, including: location, physical description, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the appraisal, 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 job.

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

Once the report is done, how can I have confidence that the value indicated is veritable? (List of questions)

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

That the information analysis implemented in the appraisal was suitable.

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

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

That a trustworthy, defensible appraisal report was conferred.

There are intense classroom and real world experience requirements that must be met in order to get an appraisal license in Florida. Plus, appraisers must stick to a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for developing an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

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

Who hires an appraiser? (List of questions)

Mortgage lenders are an appraiser's typical customer, requiring their services to ensure a home involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Florida Appraisal Group, INC get the data used to estimate values in Pinellas County or other areas? (List of questions)

Collecting data is one of the primary activities of an appraiser. Data can be classified as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.

General data is received from a number of sources. To find out about recent sales to be used as "comps", we typically use the local Multiple Listing Service. To verify actual sales prices, we research items in the assessor's office and other public documents. Appraisers often have 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 assimilates general data from his or her past experience in doing assignments for other houses in the same market.

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

An appraisal is a valuable tool whenever the value of your home is pertinent to some financial decision. If you're selling your house, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. When buying, you can avoid overpaying by commissioning an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. 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 an acronym for Private Mortgage Insurance. PMI protects the lender in the event a borrower doesn't pay on the loan and the value of the house is less than the balance of 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 amount you keep from getting rid of your PMI pays for the appraisal in a matter of months. Nobody is more qualified than Florida Appraisal Group, INC when it comes to analyzing real estate appreciation in Clearwater and Pinellas County. Contact us today.

Do you need anything from the homeowner in advance? (List of questions)

The first step in most appraisals is the property 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. In the yard, trim any bushes so we can be free to get an accurate measurement of outside walls.

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

Any records on the purchase of the property for the last three years.
Information on any written private agreements, such as a shared driveway with a neighbor.
A bill for your most recent real estate taxes which should also contain a legal description of the property.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

What is "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."

Does the appraisal belong to the bank or the consumer? (List of questions)

For mortgage transactions, the lender orders 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 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 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 stated otherwise, the home owner can do whatever they want with the appraisal.

How can I get the most ROI out of home improvements? (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 are right up there with kitchens, returning 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.