WILBORN APPRAISALS - Phil & Reynolds has answers to "Frequently Asked Questions"


	WILBORN APPRAISALS - Phil & Reynolds is always ready to address any concerns you might have about appraisals or real estate in Columbia and Richland County. Feel free to contact us today.

Describe an appraisal
What does an appraiser do?
What are the reasons I would need services from WILBORN APPRAISALS - Phil & Reynolds?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
After completing the report, how can I have assurance that the value indicated is legitimate?
What goes into an appraiser's certification?
Who engages the services of appraisers?
Where does an appraiser get the information used to estimate values in Richland County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
Does the appraiser need anything from the homeowner in advance?
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
Which home renovations add the most to the price?

Describe an appraisal (Top)

The appraisal process is an estimation that generates an opinion of value. There are three "common approaches to value" which assists the appraiser come to this opinion or valuation. The Cost Approach is one of the processes that appraisers use to find value; it involves finding what the improvements would cost less physical depreciation, plus the land value. Easily the most common approach in finding the value of a home is the Sales Comparison Approach which concerns figuring a comparison to similar properties close by. The Sales Comparison Approach is normally the most accurate and clearest indicator of a liklely sales price for a residential property. One of the least common approaches in appraising houses is the Income Approach, which is commonly used to figure the value of a property based on what an investor would pay based on the capital produced by the property.

What does an appraiser do? (Top)

An appraiser produces a fair and credible opinion of market value, often in the context of a real estate sale. Appraisers exhibit their professional analysis in appraisal reports.

What are the reasons I would need services from WILBORN APPRAISALS - Phil & Reynolds? (Top)

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

To get a loan.
If you would like to lower your property tax burden.
To show a homeowner has 30% equity and remove PMI.
To contest inflated property taxes.
If you need to take care of an estate.
To provide you a negotiating tool when purchasing a home.
To figure out an honest property value when selling real estate.
To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
Government agencies such as the IRS need an appraisal on every property.
If you ever find yourself in a lawsuit.

Click here for a more extensive explanation of the process about getting an appraisal.

What is the difference between an appraisal and a home inspection? (Top)

Home inspectors do not estimate an opinion of value and do not use the same forms as appraisers. The purpose of a home inspection is to evaluate the structure of the house from foundation to attic. Usually, a home inspection report will explain the amenities and the requirements of the property: 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.

Is an appraisal the same as a comparative market analysis(CMA)? (Top)

Frankly, they share nothing in common. What the CMA depends on are vague trends. The appraisal is reliant on specific verifiable comparable sales. Area and architectural values are also precedent in an appraisal. 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 largest differentiator is who's creating the report. Real estate agents produce 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 made their livelihood on valuing real estate in and around Richland 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 accept a previously agreed upon sum for work they perform, regardless of their outcome.

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

The main purpose of an appraisal report is to give a value opinion, and depending on the scope of the report, you'll usually see the following:

The client and other intended users.
How the appraisal is supposed to be used.
The purpose of the appraisal.
The type of value reported and a definition of the value reported.
The effective date of the appraisal.
Pertinent property attributes, including: location, physical description, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible items.
All 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.
What was involved in the process of completing the job.

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

After completing the report, how can I have assurance that the value indicated is legitimate? (Top)

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

The appraisal contained an apropos analysis of the information.

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

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

That a trustworthy, supportable appraisal report was imparted.

To become a state licensed appraiser, we must satisfy intense education and experience requirements that train us to produce an unbiased opinion. Likewise, appraisers must follow a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Top) Licensing and certification requires coursework, tests and practical experience. Once an appraiser is licensed, he or she is required to take continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who engages the services of appraisers? (Top)

Most of the time, appraisers are employed by lenders to estimate the value of property involved in a loan transaction - to make sure the property is indeed adequate collateral for the loan. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does an appraiser get the information used to estimate values in Richland County or other areas? (Top)

One of the primary activities of an appraiser is to collect property data. Data can be divided into Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is received from a number of sources. To find out about recently sold homes to be used as "comps", we often use the local Multiple Listing Service. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood product.

And last but not least, the appraiser gathers general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.

Why should I hire a licensed appraiser? (Top)

If you're involved in some sort of financial decision and the value of your home matters, you'll want to hire a licensed appraiser. For those selling a home, you'll want to figure out the price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. When buying, be sure you're not overpaying by getting 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. 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 is an acronym for Private Mortgage Insurance. This additional policy covers the lender in the event a borrower is unable to pay on the loan and the market price of the house is less than the balance of 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 savings from cancelling your PMI will make up for the price of the appraisal in a matter of months. WILBORN APPRAISALS - Phil & Reynolds has years of experience with real estate value trends in Columbia and Richland County. Contact us today.

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

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. The best thing you can do to help is make sure we have easy access to the exterior of the house . Trim any bushes and move any items that would get in our way while we measure the structure. On the inside, make sure the appraiser can easily access appliances like furnaces and water heaters.

To help speed things along as well as ensure a more accurate report, try if possible to have the following items:

A plot plan or survey of the house and land (if readily available).
List of personal property to be sold with the building.
Most recent real estate tax bill from Richland and or legal description of the property.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
Locate copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.

What does "Market Value" mean? (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."

Does the appraisal belong to the bank or the consumer? (Top)

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 entitled to a copy of the appraisal - 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.

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

Which home renovations add the most to the price? (Top)

It really depends on the market. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!

As a rule, the most value returned from renovating a home comes in the kitchen. 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.