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ALSouth Appraisal Services LLC has answers to "Frequently Asked Questions"

ALSouth Appraisal Services LLC is always happy to address any inquiries you might have about appraisals or real estate in Geneva County. Feel free to contact us today.

Describe an appraisal
What does an appraiser do?
What are the reasons a person would need a real estate appraisal?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What can I expect to see in my appraisal report?
Upon completion of the report, what assurance is there that the final number is valid?
What does it mean for an appraiser to be licensed?
Who are an appraiser's customers?
Where does ALSouth Appraisal Services LLC get the information used to estimate values in Geneva County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
What is "Market Value?"
Who actually owns the appraisal report?
Which home renovations add the most to the price?



Describe an appraisal   (Return to top)

The process of performing an appraisal consists of an evaluation which leads to an opinion of value. There are three "common approaches to value" which assists the appraiser come to this opinion or estimate. The Cost Approach is one of the approaches that real estate appraisers use to find the value of a property; it involves concluding what the improvements would cost minus physical depreciation, adding the land value. The most common approach in finding the likely sales price of a house is the Sales Comparison Approach which concerns concluding a comparison to comparable houses nearby. Generally speaking, the Sales Comparison Approach is the most accurate indicator of market value of a house. The Income Approach is generally used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of income a property produce.

What does an appraiser do?   (Return to top)

An appraiser forumlates a fair and credible opinion of market value, often in the context of a real estate exchange. Appraisers demonstrate their expert conclusions in appraisal reports.


What are the reasons a person would need a real estate appraisal?   (Return to top)

There are many reasons to order an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for ordering an appraisal include:
  • To obtain a loan.
  • If you would like to reduce your property tax obligations.
  • To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
  • To contest inflated property taxes.
  • To handle an estate.
  • To provide you an edge when purchasing a home.
  • To determine a likely sales price when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • 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 definitely help.
For a more extensive description of the appraisal process click here.


How is an appraiser different than a home inspector?   (Return to top)

Home inspectors do not figure out an opinion of value and do not use the same forms as appraisers. An inspection is a third-party evaluation of the accessible structure and systems of a home, from the top to the bottom. 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 capacity 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?   (Return to top)

Frankly, it's night and day. The CMA uses market trends to conduct most of their business. Appraisals use similar sales which are verifiable resources. Location and architectural values are also important in an appraisal. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

The person creating the report is frankly the biggest difference between a CMA and an appraisal. 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, Alabama licensed professional who bases a career on valuing properties in and around Geneva County creates the appraisal. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a flat fee for assignments, regardless of their value conclusion.

What can I expect to see in my appraisal report?   (Return to top)

The main objective 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, one will customarily see the following:
  • The client and other intended users.
  • The intended use of the appraisal.
  • The purpose of the assignment.
  • The type of value contained and a definition of that value.
  • The effective date of the value opinion.
  • Relevant property attributes, including: location, physical characteristics, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible items.
  • Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and other items of a similar nature.
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • The scope of work considered to complete the assignment.
For a more comprehensive view of the work that goes into an appraisal report click here: Sample Appraisal Report


Upon completion of the report, what assurance is there that the final number is valid?   (Return to top)

In communicating an appraisal report, each appraiser must make sure of the following:
  • That the information analysis implemented in the appraisal was suitable.

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

  • That appraisal services were not conducted in a careless or negligent manner.

  • The final appraisal report was transparent, sound and not easily discredited.
To become a state licensed appraiser, there are education requirements as well as on the jobexperience that must be attained - all with the end goal of being able to render unbiased value opinions. Likewise, appraisers must abide by a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for developing an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Return to top) Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. However, licensing and certification typically translates to many hours of classroom study, tests and practical experience. Once an appraiser is licensed, he or she must then complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who are an appraiser's customers?   (Return to top)

Most of the time, appraisers are employed by lenders to estimate the value of a home involved in a loan transaction - to make sure the house is truly adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does ALSouth Appraisal Services LLC get the information used to estimate values in Geneva County or other areas?   (Return to top)

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

General data is collected from a many sources. To find out about recently sold homes to be used as "comps", an appraiser will typically use the local Multiple Listing Service. Tax records and other public documents verify actual sales prices in a market. 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 service.

And most importantly, the appraiser assembles general data from his or her past experience in doing assignments for other houses in the same market.


What can a full appraisal do for me?   (Return to top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. If you're selling your home, an appraisal assists you in setting the most appropriate price. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from ALSouth Appraisal Services LLC is the best way to ensure assets are divided properly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making informed financial decisions.


What exactly is PMI and how can I get rid of it?   (Return to top)

PMI stands for Private Mortgage Insurance. It takes care of the lender in case a borrower doesn't pay on the loan and the value of the house is lower than what is owed on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

Has your home value appreciated since you first purchased? Contact ALSouth Appraisal Services LLC today at 3346841495. You may be able to get rid of your Private Mortgage Insurance payment.

Should I do anything in advance of the appraisal inspection   (Return to top)

The first step in most appraisals is the home inspection. During this process, the appraiser 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. The best thing you can do to help is make 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 get in our way while we measure the structure. Indoors, make sure the appraiser can easily access appliances like furnaces and water heaters.

You can make our visit go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • Any information on the purchase of the property for 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, septic systems and wells.
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
  • Most recent real estate tax bill from Geneva and or legal description of the property.

What is "Market Value?"   (Return to 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?   (Return to top)

In most real estate transactions, the appraisal is ordered by the lender. 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 entitled 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 state how the appraisal can be used; 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?   (Return to top)

This really depends on where the home is. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

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 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.