Elite Appraisal, Inc. has answers to "Frequently Asked Questions"

Elite Appraisal, Inc. is always happy to elaborate on any questions you might have about appraisals or real estate in Miami and Miami-Dade County. Don't hesitate to contact us today.

Describe an appraisal
Describe what an appraiser does
Why would someone request a real estate appraisal?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
Upon completion of the report, what assurance is there that the value conclusion is valid?
How hard is it to become certified?
Who do appraisers work for?
Where does Elite Appraisal, Inc. get the information used to estimate values in Miami-Dade County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
What does "Market Value" mean?
Who has rights to the appraisal report?
I want to get more for my house. Where should I spend money renovating?



Describe an appraisal   (List of questions)

An appraiser provides an estimation that produces an opinion of value. The appraiser will typically use a few "approaches," typically three, to arrive at the estimation of market value. One of the processes is the Cost Approach - which is how much it would cost to replace the improvements, less physical deterioration and other factors, then adding the land value. Another of the methods is the Sales Comparison Approach - which involves finding a comparable analysis to other similar properties within a close proximity which have recently sold. Usually, the Sales Comparison Approach is the most definite indicator of market value of a home. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it deals with estimating what an investor would pay based on the money generated by the property.

Describe what an appraiser does   (List of questions)

An appraiser forumlates a fair and credible opinion of market value, in the support of real property exchanges. Appraisers exhibit their findings in appraisal reports.


Why would someone request a real estate appraisal?   (List of questions)

There are many reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for ordering an appraisal include:
  • To receive a loan.
  • To lower your tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
  • To contest high property taxes.
  • If you need to take care of an estate.
  • To give you a leg-up when purchasing a home.
  • To find the most probable property value when selling your home.
  • To protect 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.
  • It's possible you could be involved in a lawsuit - an appraisal will definitely help.
Click here for a more detailed explanation of the process about getting an appraisal.


How is an appraisal different than a home inspection?   (List of questions)

Home inspectors do not come to an opinion of value and are not appraisers. An inspection is a third-party evaluation of the available structure and systems of a home, from the roof to the foundation. Usually, a home inspection report will discuss 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 integrity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

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

To be blunt, it's like comparing broadband and dial-up. The CMA depends on indistinct trends in the market. Appraisals use similar sales which are valid resources. The appraisal report will also contain location and building prices. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

The person behind the report is hands down the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. A certified, state licensed professional who bases a career on valuing homes in and around Miami-Dade County creates the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon sum for work they perform, regardless of their value conclusion.

What can I expect to see in my appraisal report?   (List of questions)

Each report should indicate a supported value opinion and will identify the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The purpose of the assignment.
  • The type of value contained and a definition of the value reported.
  • The effective date of the value opinion.
  • Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic factors, the property rights in question, and non-real estate items included in the valuation, 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 the like.
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • What was included in the activity of completing the job.
For a more in depth look at all that goes into an appraisal report click here: Sample Appraisal Report


Upon completion of the report, what assurance is there that the value conclusion is valid?   (List of questions)

In communicating an appraisal report, each appraiser must make sure of the following:
  • The appraisal contained analysis of the data.

  • Whether individually or collectively, there were no major errors contained in the report, nor any relevant details left out.

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

  • That a credible, substantiated appraisal report was conferred.
To become a state licensed appraiser, there are education requirements as well as real world experience that must be attained - all with the objective of being able to render unbiased value opinions. In addition, appraisers must obey a strict industry code of ethics and observe national standards of practice for real estate appraisal. The rules for carrying out an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (List of questions) Regulations regarding licensing and certification are different from state to state. In general, licensing and certification is commonly associated with many hours of classroom study, tests and experience working under a supervisory appraiser. Once an appraiser is licensed, he/she is required to take continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who do appraisers work for?   (List of questions)

Mortgage lenders are an appraiser's typical client, needing their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Elite Appraisal, Inc. get the information used to estimate values in Miami-Dade County or other areas?   (List of questions)

One of the primary tasks an appraiser engages in is to compile data. Data can be described as either 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 many sources. To look up recently sold homes to be used as "comps", we typically go to the local Multiple Listing Service. Tax records and other public documents reveal actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood product.

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


Why do I need a professional appraisal?   (List of questions)

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 a 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, you can avoid overpaying by commissioning an independent appraisal. For people settling an estate or divorce, an appraisal from Elite Appraisal, Inc. is the best way to ensure assets are split up evenly. A house is often the single, largest financial asset anybody owns. Knowing its true value means you can make the right financial decisions.


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

PMI is the common abbreviation for for Private Mortgage Insurance. PMI covers the lender in case a borrower doesn't pay on the loan and the market price of the house is lower 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.

Did you have less than 20% to put down on your mortgage? Contact Elite Appraisal, Inc. today at 305-480-8010 to see if you can get rid of your Private Mortgage Insurance payment.

Should I do anything in advance of the appraisal inspection   (List of questions)

We start with an inspection of the property. 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 the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and relocate any items that would make it difficult to measure the structure. Indoors, make sure we 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:
  • Written property agreements, such as a maintenance easement for a shared driveway.
  • 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.
  • Information on "Homeowners Associations" or condominium covenants and fees.
  • A list of any 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).
  • Most recent real estate tax bill from Miami-Dade and or legal description of the property.

What does "Market Value" mean?   (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."



Who has rights to the appraisal report?   (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 certainly 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.

This rule doesn't apply when a home owner hires an appraiser directly. In these situations, the appraiser may stipulate the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can do whatever they want with the appraisal.


I want to get more for my house. Where should I spend money renovating?   (List of questions)

This really depends on where the home is. 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

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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, 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 an oddball for your neighborhood in terms of size.