Whitworth Appraisals has answers to "Frequently Asked Questions"

Whitworth Appraisals is prepared to answer any questions you might have about appraisals or real estate in Clayton County. Contact Whitworth Appraisals today to learn how we can help you with your specific valuation problems.

Describe an appraisal
What does an appraiser do?
What are the reasons someone would need a real estate appraisal?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative (or competitive) market analysis(CMA)?
What are the contents of an appraisal report?
Upon completion of the report, how can I have confidence that the value conclusion is accurate?
What goes into an appraiser's certification?
Who employs appraisers?
Where does an appraiser get the information used to estimate values in Clayton County or other areas?
What can a full appraisal do for me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal appointment
What is "Market Value?"
Who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?



Describe an appraisal   (List of questions)

The procedure of writing an appraisal consists of an evaluation which leads to an opinion of value. This opinion or estimate is concluded by using a formal process that usually uses the three main "common approaches to value". One of the methods is the Cost Approach - which is how much capital would be required 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 deals with making a comparison to other similar properties within a close proximity which have recently sold. The Sales Comparison Approach is normally the most accurate and clearest indicator of value for a residential property. 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 produced by the property.

What does an appraiser do?   (List of questions)

An appraiser forumlates an impartial and well justified determination of market value, to be used in making real estate transactions, estate or legal property settlements, tax appeals, etc. Appraisers document their investigation in appraisal reports.


What are the reasons someone would need a real estate appraisal?   (List of questions)

There are many reasons to purchase an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for getting an appraisal include:
  • To get 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 fight high property taxes.
  • If you need to settle an estate.
  • To offer you a leg-up when purchasing a home.
  • To determine the most probable property value when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS require an appraisal on every home.
  • If you are ever involved in a lawsuit.
Click here for a more detailed explanation of the process about getting an appraisal.


What is the difference between an appraisal and a home inspection?   (List of questions)

Appraisers do not do provide house inspections and are not home inspectors. A third-party home inspector will evaluate the structure of the property, from the roof to the foundation. Commonly, a home inspection report will evaluate the amenities and the requirements 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, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

Is an appraisal the same as a comparative (or competitive) market analysis(CMA)?   (List of questions)

Frankly, it's night and day. What the CMA relies upon are superficial trends. Appraisals use similar sales which are selected from verifiable sources. Also, the appraisal looks at other factors like condition, location and replacement prices. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

However, the most significant factor is who's creating the report. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, state licensed professional who bases their livelihood on valuing homes in and around your property is behind the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a flat sum for work they perform, regardless of their value conclusion with no influence from a potential sale.

What are the contents of an appraisal report?   (List of questions)

Each appraisal must demonstrate a believable estimate of value and will document the following:

  • Who engaged the appraiser and other intended users.
  • The intended use of the report.
  • The purpose of the assignment.
  • The type of value contained and a definition of that value.
  • The effective date of the appraisal.
  • Pertinent property characteristics, including: location, physical characteristics, 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 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 used when completing the job.
For a more in depth look at what goes into an appraisal report click here: Sample Appraisal Report


Upon completion of the report, how can I have confidence that the value conclusion is accurate?   (List of questions)

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

  • That the information analysis contained in the appraisal was suitable.
  • Whether individually or collectively, there were no major errors contained in the report, nor any material details left out.
  • That appraisal services were not carried out in a careless or negligent manner.
  • The final appraisal report was transparent, credible and defensible.
There are intense classroom and real world experience requirements that must be fulfilled in order to get an appraisal license in Georgia. In addition, appraisers must obey a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for working up an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

   (List of questions) Licensing and certification requires classroom study, tests and practical experience. Once licensed, he or she is required to engage in continuing education courses in order to keep the license current. To see the specific requirements for any state click here.

Who employs appraisers?   (List of questions)

Mortgage lenders are an appraiser's most likely customer, requesting their services to ensure a home involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements. Individuals obtain appraisals to plan or settle their estates, for divorces, PMI removal and other reasons.

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

Collecting data is one of the primary occupations of an appraiser. Data can be categorized as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is obrained from numerous places and is based on intensive research. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparable sales and/or listings. Tax records and other public documents verify physical data and actual sales prices in a market. Appraisers often need 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 collective knowledge gained from doing assignments for other properties in the same market.


What can a full appraisal do for me?   (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. 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. Simply put, a home is often the single, largest financial asset anybody owns. Don't make decisions in the dark without a professional appraisal.


My mortgage statement has an item on it for PMI? Can I get rid of that?   (List of questions)

PMI is the common abbreviation for for Private Mortgage Insurance. PMI guards the lender if a borrower doesn't pay on the loan and the value 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.

Has your home value appreciated since you first purchased? Call Whitworth Appraisals today at (770) 478-9205 to see if you can save money by removing your Private Mortgage Insurance premium.

Should I do anything in advance of the appraisal appointment   (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 both inside and out for inclusion in the report. Is there anything you can do to help? Yes there is! First, be sure we have easy access to both the exterior and interior of the house. Trim any shrubs and move any items that would get in our way while we measure the structure. Indoors, make sure we can easily access 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.
  • A list of any personal property that will be left behind and sold with the home, such as a oven, or a washer and dryer, if applicable.
  • Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
  • Find copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.

What is "Market Value?"   (List of questions)

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."



Who actually owns the appraisal report?   (List of questions)

In most real estate transactions, the appraisal is ordered by the lender. Even though it's the buyer who 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 entitled to use the report for any other purpose without permission from the lender. The entity ordering the appraisal is considered the client. By law, the client is the only one the appraiser can provide with a copy of the report without written permission from the client.

The exception to this rule is when a home owner hires an appraiser directly. In these cases, the appraiser may state 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 use the appraisal for any purpose.


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, installing 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. According to one national survey, kitchen remodels returned an average of 88% of the investment. In other words, a $10,000 kitchen remodeling project might 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 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 or features.