Walker & Associates has answers to "Frequently Asked Questions"


	Walker & Associates is always willing to address any inquiries you might have about appraisals in Charlotte and Mecklenburg County. Contact us today to learn how we can help solve your valuation problems.

What is an appraisal?
What does an appraiser do?
Why would I need services from Walker & Associates?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
Once the assignment has been completed, what assurance is there that the value indicated is accurate?
What goes into an appraiser's certification?
Who are an appraiser's customers?
Where does Walker & Associates get the data used to estimate values in Mecklenburg County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
How does an appraiser define "Market Value"?
Who actually owns the appraisal report?
How can I get the most ROI out of home improvements?

What is an appraisal? (List of questions)

The appraisal process is an evaluation that produces an opinion of value. This opinion or estimate is concluded through a formal process that commonly uses three "common approaches to value". The Cost Approach is one of the approaches that appraisers use to find the value of a house; it involves discerning what the improvements would cost minus physical deterioration, plus the land value. The Sales Comparison Approach deals with searching for comparable houses in close proximity and discovering the value based on comparing those homes to the house being appraised. Being the most popular approach, the Sales Comparison Approach tends to be the most accurate and best indicator of market value for a house. One of the least common approaches in appraising houses is the Income Approach, which is mainly used to determine the value of a property based on what an investor would pay based on the capital produced by the property.

What does an appraiser do? (List of questions)

An appraiser produces an impartial and well justified determination of market value, in the support of real property exchanges. Appraisers exhibit their professional analysis in appraisal reports.

Why would I need services from Walker & Associates? (List of questions)

There are a lot of reasons to get an appraisal from Walker & Associates with the usual reason being real estate and mortgage transactions. Other reasons for ordering an report include:

To obtain a loan.
If you would like to reduce your property tax obligations.
To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
To fight improperly assessed property taxes.
To handle an estate.
To give you an edge when purchasing a home.
To determine a likely sales price when listing your home.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Because an official agency such as the IRS requires it.
It's possible you could be involved in a lawsuit - an appraisal will help.

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

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

Appraisers do not do provide house inspections and are not home inspectors. An inspection is a third-party investigation of the available structure and electrical and mechanical systems of a property, from the roof to the foundation. The standard home inspector's report will contain 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 visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

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

Simply, they share nothing in common. The CMA relies on indefinite trends in the market. The appraisal depends on specific definite comparable sales. In addition, the appraisal checks other factors like condition, location and building prices. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the biggest difference is the person behind the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, create CMA's. A certified, state licensed professional who has formed a career on valuing real estate in and around Mecklenburg 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 flat fee for assignments, regardless of their value conclusion.

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

The main purpose of an appraisal document is to provide a value opinion, 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.
The intended use of the report.
The appraisal's purpose.
The type of value contained and a definition of that value.
The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
Pertinent property attributes, including: location, physical characteristics, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible factors.
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 process of completing the assignment.

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

Once the assignment has been completed, what assurance is there that the value indicated is accurate? (List of questions)

In communicating an appraisal report, each appraiser must ensure the following:

The appraisal contained an appropriate analysis of the information.

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

That appraisal services were delivered in a careful and judicious manner.

That a trustworthy, defensible appraisal report was communicated.

There are rigorous education and experience requirements that must be met in order to become a licensed appraiser in North Carolina. Plus, appraisers must abide by a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for carrying out an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(List of questions) Licensing and certification is achieved through coursework, tests and real world experience. Once an appraiser is licensed, he/she is required to complete continuing education courses in order to keep the license current. To see the specific requirements for any state click here.

Who are an appraiser's customers? (List of questions)

Mortgage lenders are an appraiser's most likely customer, requesting their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Walker & Associates get the data used to estimate values in Mecklenburg County or other areas? (List of questions)

One of the most important activities of an appraiser is to collect data. Data can be divided into Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.

General data is gathered from a numerous sources. To look up recently sold homes to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. To verify actual sales prices, we research tax records and other public documents. Appraisers routinely need to report when a property lies in a flood zone, so 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 collective knowledge gained from creating appraisals for other properties in the same market.

Why should I hire a licensed appraiser? (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, be sure you're not overpaying by commissioning an independent appraisal. For people settling an estate or divorce, an appraisal from Walker & Associates is the best documentation to ensure assets are split up evenly. 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? (List of questions)

PMI is an acronym for Private Mortgage Insurance. This supplemental plan takes care of the lender if a borrower is unable to pay on the loan and the market price of the property is lower than what is owed on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Does your monthly house payment have a lineitem for PMI?Call Walker & Associates today at (704) 366-0661 or send us an e-mail. A current appraisal could save you thousands.

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

We begin with an inspection of the home. 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 (gates aren't locked, etc). Trim any shrubs and relocate any items that would make it difficult to measure the structure. Indoors, make sure the appraiser can get to appliances like furnaces and water heaters.

To help expedite our work as well as ensure a more accurate report, try if possible to have the following items:

A plot plan or survey of the house and land (if readily available).
Written property agreements, such as a maintenance easement for a shared driveway.
Most recent real estate tax bill from Mecklenburg and or legal description of the property.
Brag sheet that lists major home improvements and enhancements, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
Locate copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.

How does an appraiser define "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)

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 appraisal - 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 hiring the appraiser for things outside securing a mortgage. In these cases, the appraiser may stipulate 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 do whatever they want with the appraisal.

How can I get the most ROI out of home improvements? (List of questions)

The answer to this is different depending upon the location of the home. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

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 would add approximately $8,800 to the value of the home. Bathrooms are right up there with kitchens, returning 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.