Elite Appraisal, Inc. has answers to "Frequently Asked Questions"
||Elite Appraisal, Inc. is ready to handle any inquiries you might have about appraisals in Miami-Dade County.
Contact us today to see how we can help solve your valuation problems.
Define the term "Appraisal"
Describe what an appraiser does
What would cause me to require services from Elite Appraisal, Inc.?
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?
Once the assignment is done, what assurance is there that the value conclusion is trustworthy?
What goes into an appraiser's certification?
Who hires an appraiser?
Where does an appraiser get the data used to estimate values in Miami-Dade 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 appointment
What does "Market Value" mean?
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?
Define the term "Appraisal" (See list of FAQ's)
An appraisal is an evaluation allowing the appraiser to come to an opinion of value.
The appraiser will typically use a few "approaches," typically three, to come to the estimation of market value.
The Cost Approach is one of the methods that appraisers use to find value; it involves finding what the improvements would cost less physical deterioration, adding the land value.
Another of the approaches is the Sales Comparison Approach - which involves discovering a comparison to other similar nearby properties which have recently sold.
The Sales Comparison Approach is normally the most accurate and best indicator of a liklely sales price for a home.
The third approach is the Income Approach, which is the best method in appraising income producing properties - it involves estimating what an investor would pay based on the money generated by the property.
Describe what an appraiser does (See list of FAQ's)
An appraiser offers a fair and credible opinion of market value, to be used in making real estate transactions.
Appraisers document their analysis in appraisal reports.
What would cause me to require services from Elite Appraisal, Inc.? (See list of FAQ's)
There are many reasons to purchase an appraisal from Elite Appraisal, Inc. with the most common reason being real estate and mortgage transactions.
A few other reasons for purchasing an appraisal include:
For a more extensive explanation of the appraisal process click here.
- To obtain a loan.
- To lower your property taxes.
- To help a homeowner realize if they owe less than 80% of their home's value and remove insurance.
- To contest inflated property taxes.
- To handle an estate.
- To give you an edge when purchasing a home.
- To find an honest property value when listing your home.
- 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 help.
The appraiser is not a home inspector nor does he/she do a full home inspection.
The point of a home inspection is to investigate the structure of the home from basement to attic.
The archetypal property inspector's report will include an evaluation of the condition of the house's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.
My agent performed a CMA for me. Is that the same as an appraisal? (See list of FAQ's)
Simply put, it's apples and oranges.
The CMA relies on indistinct trends in the market.
Appraisals use similar sales which are verifiable resources.
The appraisal report will also contain 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.
But the biggest difference is the person behind the report.
A CMA is written by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends.
A certified, Florida licensed professional who has formed a career on valuing properties in and around Miami-Dade County is behind the appraisal.
Further, the appraiser is an independent voice, with no vested interest in the value conclusion, unlike the agent, who gets a commission based upon the value of the home.
Every appraisal should demonstrate a supported value opinion and will clearly state the following:
For a more comprehensive view of all that goes into an appraisal report click here: Sample Appraisal Report
- Who engaged the appraiser and whose purposes the appraisal is to serve.
- How the appraisal is supposed to be used.
- The reason for the assignment.
- The type of value reported and a definition of the value reported.
- The effective date of the appraiser's opinions and conclusions.(Sometimes this is in the past or maybe the future for new construction!)
- Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible items.
- 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 considered while working up the assignment.
Once the assignment is done, what assurance is there that the value conclusion is trustworthy? (See list of FAQ's)
In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
There are intense classroom and practical experience requirements that must be satisfied in order to become a licensed appraiser in Florida.
Plus, appraisers must obey a strict industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).
- The appraisal used an appropriate analysis of the information.
- Whether individually or collectively, there were no substantial errors contained in the report, nor any relevant details left out.
- That appraisal services were not rendered in a careless or negligent fashion.
- The final appraisal report was easy to explain, credible and conclusive.
(See list of FAQ's)
Licensing and certification takes classroom study, tests and experience working under a supervisor.
Once licensed, he or she is required to engage in continuing education courses so the license stays current. To see the specific requirements for any state click here.
Who hires an appraiser? (See list of FAQ's)
Typically, appraisers are called upon by lenders to render a value opinion on a house involved in a loan transaction.
Appraisers also provide opinions for legal settlements, tax matters and investment decisions.
Where does an appraiser get the data used to estimate values in Miami-Dade County or other areas? (See list of FAQ's)
One of the main tasks an appraiser must accomplish is to collect property data.
Data can be divided into Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.
General data is gathered from a numerous sources.
To find out about recently sold homes to be used as "comps", an appraiser will typically use the local Multiple Listing Service.
To verify actual sales prices, we look at tax records and other public documents that are usually online nowadays.
Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood system.
And most importantly, the appraiser assembles general data from his or her past experience in creating appraisals for other houses in the same market.
What can a full appraisal do for me? (See list of FAQ's)
An appraisal is a worthwhile anytime the value of your home is pertinent to some financial decision.
If you're selling your home, an appraisal assists you in setting the most appropriate price.
When buying, be sure you're not overpaying by commissioning an independent appraisal.
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. Knowing its true value means you can make the right financial decisions.
What exactly is PMI and how can I get rid of it? (See list of FAQ's)
PMI is an acronym for Private Mortgage Insurance.
It takes care of the lender in the event 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 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.
Did you have less than 20% to put down on your mortgage? Call Elite Appraisal, Inc. today at 305-480-8010 to see if you can save money by removing your Private Mortgage Insurance payment.
Should I do anything in advance of the appraisal appointment (See list of FAQ's)
We begin with an inspection of the home.
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.
Inside, make sure it is clutter free and that we can get to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of exterior walls.
You can make our visit go faster and improve the accuracy of the appraisal report by having the following things on hand:
- A plot plan or survey of the house and land (if readily available).
- Title policy that lists encroachments or easements.
- Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
- A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
- A bill for your most recent real estate taxes which should also contain a legal description of the property.
What does "Market Value" mean? (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."
Who has rights to the appraisal report? (See list of FAQ's)
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 certainly entitled to a copy of the report - 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 scenarios, the appraiser may define 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)
The answer to this is different depending upon the location of the home.
if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.
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 weren't far behind, returning 85%.
Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.