Linda Carney has answers to "Frequently Asked Questions"


	Linda Carney is happy to address any questions you might have about appraisals in Highlands County. Feel free to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
Why would someone need your services?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What does the appraisal report contain?
Once the appraisal is done, how can I have confidence that the final number is veritable?
How are appraisers certified?
Who engages the services of appraisers?
Where does an appraiser get the information used to estimate values in Highlands County or other areas?
Why do I need a professional appraisal?
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?
Who has rights to the appraisal report?
Which home renovations add the most to the price?

Define the term "Appraisal" (List of questions)

The method of creating an appraisal consists of an inspection which forms an opinion of value. This opinion or estimate is discerned through a formal process that commonly uses the three main "common approaches to value". The Cost Approach is one of the processes that real estate appraisers use to find value; it involves concluding what the improvements would cost without physical degradation, plus the land value. Easily the most common approach in figuring the value of a house is the Sales Comparison Approach which deals with making a comparison to similar houses nearby. The Sales Comparison Approach is normally the most accurate and best indicator of value for a home. The third approach is the Income Approach, which is the best method in appraising income producing properties - it deals with estimating what an investor would pay based on the income generated by the property.

Describe what an appraiser does (List of questions)

An appraiser forumlates an impartial and well supported determination of market value, to be used in making real estate transactions. Appraisers summarize their professional analysis in appraisal reports.

Why would someone need your services? (List of questions)

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

If you are applying for 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 insurance.
To contest inflated property taxes.
To settle an estate.
To give you an edge when purchasing real estate.
To determine an honest price when putting your home on the market.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Because a government agency such as the IRS requires it.
It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.

For a more extensive description of the appraisal process click here.

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

Home inspectors do not produce 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 property from bottom to rooftop. Usually, a home inspection report will explain the amenities and the requirements of the house: 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, visible 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)

Honestly, they have nothing in common. The CMA uses market trends to generate most of their business. The appraisal is based on specific proven comparable sales. The appraisal report will also contain location and building prices. All a CMA does is generate 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 frankly the biggest 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. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a flat fee for assignments, regardless of their outcome.

What does the appraisal report contain? (List of questions)

The main purpose 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 whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The appraisal's purpose.
The type of value contained and a definition of the value reported.
The effective date of the value opinion.(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 characteristics, legal attributes, economic attributes, the property rights valued, 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 job.

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

Once the appraisal is done, how can I have confidence that the final number is veritable? (List of questions)

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

That the information analysis utilized in the appraisal was suitable.

That significant errors of omission or commission were not committed individually or collectively.

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

That a solid, supportable appraisal report was communicated.

To become a state licensed appraiser, there are education requirements as well as experience that must be attained - all with the end goal of gaining the skills required to render unbiased value opinions. Likewise, appraisers must follow a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for working up an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(List of questions) Licensing and certification takes classroom study, tests and practical experience. Once licensed, he/she must then take continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who engages the services of appraisers? (List of questions)

Typically, appraisers are employed by mortgage lenders to estimate the value of real estate involved in a loan transaction - to make sure the real estate is truly adequate collateral for the loan. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does an appraiser get the information used to estimate values in Highlands County or other areas? (List of questions)

Gathering information is one of the primary things an appraiser performs. Data can be categorized as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.

General data is collected from a number of places. To research recently sold homes to be used as "comps", we typically go to the local Multiple Listing Service. To double-check actual sales prices, we look at tax records and other public documents. Appraisers routinely have to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And most importantly, the appraiser assembles general data from his or her past experience in 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. If you're selling your home, an appraisal helps you set 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. Without knowing its real value, wise financial decisions are impossible.

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

PMI stands for Private Mortgage Insurance. This supplemental plan covers the lender in case a borrower is unable to pay on the loan and the market price of the house is lower than the loan balance. 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.


	The amount you keep from cancelling your PMI pays for the appraisal in a matter of months. Linda Carney is a name you can trust when it comes to real estate value trends in Sebring and Highlands County. Contact us today.

Does the appraiser need anything from the homeowner in advance? (List of questions)

We begin with an inspection of the home. During this process, the appraiser 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 . Trim any shrubs and relocate any items that would get in our way while we measure the structure. Indoors, make sure we can get to 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:

Records on the latest purchase of the property in the last three years.
Written property agreements, such as a maintenance agreement for a shared driveway.
A bill for your most recent real estate taxes which should also contain a legal description of the property.
Brag sheet that lists major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
A list of "suggested" improvements when the property is being appraised "as complete".

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.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these situations, the appraiser may define how the appraisal can be used; 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.

Which home renovations add the most to the price? (List of questions)

The added value of a particular amenity truly depends on the local market. 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 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 an oddball for your neighborhood in terms of size.