Bryan & Company Real Estate Appraisals has answers to "Frequently Asked Questions"


	Bryan & Company Real Estate Appraisals is prepared to answer any questions you might have about appraisals or real estate in Wake County. Contact Bryan & Company Real Estate Appraisals today to talk about how we can help you with your specific valuation problems.

Define the term "Appraisal"
Describe what an appraiser does
Why would a person need services from Bryan & Company Real Estate Appraisals?
How is an appraiser different than a home inspector?
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, how can I have assurance that the value conclusion is trustworthy?
How are appraisers certified?
Who engages the services of appraisers?
Where does Bryan & Company Real Estate Appraisals get the data used to estimate values in Wake County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Does the appraiser need anything from me in advance?
How does an appraiser define "Market Value"?
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?

Define the term "Appraisal" (Top)

The process of creating an appraisal deals with an inspection which leads to an opinion of value. This opinion or estimate is figured by using a formal process that generally uses three "common approaches to value". The Cost Approach is one of the methods that real estate appraisers use to find the value of a home; it involves figuring what the improvements would cost less physical depreciation, adding the land value. Easily the most common approach in figuring the likely sales price of a house is the Sales Comparison Approach which deals with figuring a comparison to similar properties close by. Being the most commonly used approach, the Sales Comparison Approach is generally the most accurate and best indicator of market value for a house. One of the least common approaches in appraising residential properties is the Income Approach, which is mainly used to find the value of a property based on what an investor would pay based on the capital produced by the building.

Describe what an appraiser does (Top)

An appraiser produces a fair and credible determination of market value, to be used in making real estate transactions. Appraisers show their expert conclusions in appraisal reports.

Why would a person need services from Bryan & Company Real Estate Appraisals? (Top)

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 report include:

To get 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 Primary Mortgage Insurance.
To contest inflated property taxes.
To settle an estate.
To give you an edge when purchasing a home.
To determine an honest price when selling real estate.
To ensure parties are provided just compensation in eminient domain cases.
Because an official agency such as the IRS requires it.
If you ever find yourself in a lawsuit.

Click here for a more detailed explanation of the process dealing with getting an appraisal.

How is an appraiser different than a home inspector? (Top)

Appraisers do not do provide residential property inspections and are not home inspectors. The point of a home inspection is to evaluate the structure of the home from basement to rooftop. The general property inspector's report will include an evaluation of the integrity of the house'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.

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

Frankly, it's like comparing sugar and saccharin. The CMA depends on vague trends in the market. The appraisal is reliant on specific proven comparable sales. The appraisal report will also include neighborhood and construction costs. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

The credentials of the person creating the report is actually the most significant difference between a CMA and an appraisal. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Further, the appraiser is an unbiased party, with no conditional interest in the property's value, unlike the agent, who gets a commission based upon the price of the home.

What are the contents of an appraisal report? (Top)

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.
How the appraisal is supposed to be used.
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 attributes, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the valuation, such as personal property, trade fixtures 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 while working up the job.

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

Once the appraisal has been delivered, how can I have assurance that the value conclusion is trustworthy? (Top)

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

That the information analysis implemented 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 rendered in a careful and judicious fashion.

The final appraisal report was understandable, legitimate and defensible.

There are intense education and on the job experience requirements that must be met in order to get an appraisal license in North Carolina. In addition, 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).

(Top) Regulations regarding licensing and certification vary from state to state. In general, licensing and certification typically translates to many hours of coursework, tests and real world experience. Once licensed, he or she is required to complete continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who engages the services of appraisers? (Top)

Typically, appraisers are called upon by mortgage lenders to estimate the value of real estate involved in a loan transaction - to make sure the subject is truly adequate collateral for the loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Bryan & Company Real Estate Appraisals get the data used to estimate values in Wake County or other areas? (Top)

One of the primary things an appraiser does is to compile property data. Data can be categorized as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is gathered from a variety of places. To find out about recent sales to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. Tax records and other courthouse documents verify actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood system.

And most importantly, the appraiser assembles general data from his or her collective knowledge gained from doing assignments for other properties in the same market.

How can a licensed appraiser help me? (Top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. When selling your house, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. 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. Simply put, a home is often the single, largest financial asset anybody owns. Knowing its true value means you can make informed financial decisions.

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

PMI stands for Private Mortgage Insurance. This additional plan covers the lender in the event a borrower doesn't pay on the loan and the value of the property is less 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.


	Did you have less than 20% to put down on your mortgage? Call Bryan & Company Real Estate Appraisals today at 919-749-0213 to see if you can save money by removing your Private Mortgage Insurance premium.

Does the appraiser need anything from me in advance? (Top)

The first step in most appraisals is the property 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 status of its features. The best thing you can do to help is make sure we have easy access to the exterior of the house . Trim any landscaping and relocate any items that would make it difficult to measure the structure. On the inside, make sure we can easily access items like furnaces and water heaters.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:

A survey or plot map of the property and building (if available).
Written property agreements, such as a maintenance agreement for a shared driveway.
Title policy that describes encroachments or easements.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .

How does an appraiser define "Market Value"? (Top)

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? (Top)

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 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.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these cases, 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.

Are some home improvements more worthwhile than others? (Top)

Like all things real estate, this is dependent on a home's location. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

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, yielding 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 overbuilt for your neighborhood in terms of size.