Southland Appraisal, LLC has answers to "Frequently Asked Questions"


	Southland Appraisal, LLC is prepared to talk to you about any concerns you might have about appraisals or real estate in Watertown and Wilson County. Contact us today to see how we can help you with your specific valuation problems.

What is an appraisal?
Describe what an appraiser does
Why would a person request your services?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
Once the assignment has been delivered, how can I have confidence that the final number is legitimate?
What are the requirements to be a certified appraiser?
Who are an appraiser's customers?
Where does an appraiser get the data used to estimate values in Wilson 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?
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? (See list of FAQ's)

An appraisal report is an estimation leading to an opinion of value. This opinion or estimate is discerned by using a formal process that commonly uses three "common approaches to value". One of the three is the Cost Approach - which is what it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. Easily the most common approach in finding the likely sales price of a house is the Sales Comparison Approach which deals with concluding a comparison to comparable properties nearby. Being the most commonly used approach, the Sales Comparison Approach is considered 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 market value of a property based on what an investor would pay based on the income produced by the building.

Describe what an appraiser does (See list of FAQ's)

An appraiser forumlates a fair and credible assessment of market value, often in the context of a real estate purchase. Appraisers present their professional investigation in appraisal reports.

Why would a person request your services? (See list of FAQ's)

There are a lot of reasons to obtain an appraisal from Southland Appraisal, LLC with the usual reason being real estate and mortgage transactions. Some other reasons for ordering an appraisal report include:

If you are applying for a loan.
If you would like to reduce your property tax obligations.
To show a homeowner has 30% equity and remove PMI.
To fight high property taxes.
To deal with an estate.
To provide you a leg-up when purchasing a home.
To figure out a reasonable sales price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS need an appraisal on every property.
It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.

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

Is an appraisal the same as a home inspection? (See list of FAQ's)

The appraiser is not a home inspector and he or she does not do a complete home inspection. The point of a home inspection is to investigate the structure of the house from bottom to top. For the most part, a home inspection report will evaluate the amenities and the necessities of the home: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

Is an appraisal the same as a comparative market analysis(CMA)? (See list of FAQ's)

To be blunt, it's like comparing sugar and saccharin. The CMA uses market trends to create most of their business. The appraisal is reliant on specific definite comparable sales. The appraisal report will also include area and construction values. 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.

But the biggest difference is the person creating the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, create CMA's. The appraisal is produce by a licensed, certified professional who makes a living 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 flat fee for work they perform, regardless of their outcome.

What can I expect to see in my appraisal report? (See list of FAQ's)

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

The client and whose purposes the appraisal is to serve.
The intended use of the appraisal.
The reason for the assignment.
The type of value contained 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 property rights in question, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible considerations.
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 look at what goes into an appraisal report click here: Sample Appraisal Report

Once the assignment has been delivered, how can I have confidence that the final number is legitimate? (See list of FAQ's)

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

That the information analysis implemented in the appraisal was appropriate.

Whether individually or collectively, there were no substantial errors contained in the report, nor any material details left out.

That appraisal services were not rendered in a careless or negligent fashion.

The final appraisal report was clear, legitimate and not easily discredited.

To become a state licensed appraiser, we must satisfy considerable education and experience requirements that enable us to produce an unbiased opinion. Plus, appraisers must stick to a strict industry code of ethics and observe national standards of practice for real estate appraisal. The rules for carrying out an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's) Regulations regarding licensing and certification are different from state to state. However, licensing and certification typically translates to many hours of classroom study, tests and real world experience. Once an appraiser is licensed, he/she is required to 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? (See list of FAQ's)

Commonly, appraisers are hired by lenders to estimate the value of property involved in a loan transaction - to make sure the real estate is indeed adequate collateral for the loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does an appraiser get the data used to estimate values in Wilson County or other areas? (See list of FAQ's)

Compiling data is one of the primary tasks an appraiser performs. Data can be classified as either Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is collected from a number of sources. To research recently sold homes to be used as "comps", an appraiser will often go to the local Multiple Listing Service. Tax records and other courthouse documents reveal actual sales prices in a market. Appraisers routinely 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 creating appraisals for other properties in the same market.

How can a licensed appraiser help me? (See list of FAQ's)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. For those selling a home, you'll want to determine 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. 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. Don't make decisions in the dark with a professional appraisal.

What exactly is PMI and how can I get rid of it? (See list of FAQ's)

PMI is short for for Private Mortgage Insurance. PMI protects the lender if a borrower is unable to pay on the loan and the value of the house is less than the balance of 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 Southland Appraisal, LLC today at 615-697-2115 to see if you can save money by removing your Private Mortgage Insurance payment.

Does the appraiser need anything from me in advance? (See list of FAQ's)

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 status of its amenities. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house . Trim any shrubs and move any items that would make it difficult to measure the structure. On the inside, make sure the appraiser can get to appliances 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:

Information on any written private easements, such as a shared driveway with a neighbor.
A list of any personal property that is part of the home and you intend to be sold with the home, such as an oven, or a washer and dryer, if applicable.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
Brag sheet that lists major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
A bill for your most recent real estate taxes which should also contain a legal description of the property.

What is "Market Value?" (See list of FAQ's)

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? (See list of FAQ's)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. 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 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 scenarios, 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 use the appraisal for any purpose.

How can I get the most ROI out of home improvements? (See list of FAQ's)

A home's location - what city it is in and even what part of that city - is key to this popular question. For example, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!

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 weren't far behind, returning 85%. Adding bedrooms and baths can also boost 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.