Griffin Appraisals has answers to "Frequently Asked Questions"

Griffin Appraisals is happy to address any inquiries you might have about appraisals in Madison County. Don't hesitate to contact us today.

What is an appraisal?
What does an appraiser do?
Why would someone request your services?
What is the difference between an appraisal and a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
Once the report has been delivered, how can I have a guarantee that the value conclusion is accurate?
How difficult is it to become certified?
Who do appraisers work for?
Where does an appraiser get the information used to estimate values in Madison County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?



What is an appraisal?   (Back to top)

An appraisal is a thought process that concludes with an opinion of value. There are three "common approaches to value" which assists the appraiser arrive at this opinion or estimate. One of the methods in use is the Cost Approach, which finds what it would cost to restore the improvements to the house, minus depreciation and physical dilapidation, adding the land value. Another of the approaches is the Sales Comparison Approach - which involves discovering a comparison to other similar properties within a close vicinity which have recently sold. Usually, the Sales Comparison Approach is the most definite indicator of market value of a home. One of the least common approaches in appraising homes is the Income Approach, which is generally used to find the market value of a property based on what an investor would pay based on the income produced by the building.

What does an appraiser do?   (Back to top)

An appraiser forumlates a professional, unbiased assessment of market value, to be used in making real estate transactions. Appraisers present their expert conclusions in appraisal reports.


Why would someone request your services?   (Back to top)

There are many reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for obtaining an appraisal report include:
  • If you are applying for 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 Primary Mortgage Insurance.
  • To fight high property taxes.
  • If you need to settle an estate.
  • To give you a negotiating tool when purchasing real estate.
  • To figure out a likely property value when listing your home.
  • 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.
  • If you ever find yourself in a lawsuit.
Click here for a more extensive explanation of the process of getting an appraisal.


What is the difference between an appraisal and a home inspection?   (Back to top)

Appraisers do not do provide residential property inspections and are not home inspectors. A third-party home inspector will investigate the structure of the home, from the top to the bottom. The archetypal house inspector's report will include an evaluation of the integrity of the home'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.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (Back to top)

Frankly, they share nothing in common. The CMA relies on indistinct trends in the market. Appraisals use similar sales which are valid resources. The appraisal report will also contain area and construction values. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the largest differentiator is the person behind the report. A CMA is created 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, state licensed professional who bases their livelihood on valuing real estate in and around Madison County is behind the appraisal. Further, the appraiser is an unbiased voice, with no conditional interest in the value of a home, unlike the real estate agent, whose income is tied to the price of the home.

What are the contents of an appraisal report?   (Back to top)

Each appraisal should reflect a credible value opinion and will clearly state the following:
  • The client and other intended users.
  • The intended use of the report.
  • The purpose of 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!)
  • Pertinent property characteristics, 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 factors.
  • All 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 when completing the job.
For a more in depth view of the work that goes into an appraisal report click here: Sample Appraisal Report

Once the report has been delivered, how can I have a guarantee that the value conclusion is accurate?   (Back to top)

In the documentation of an appraisal, each appraiser must ensure the following:
  • The appraisal contained an appropriate analysis of the data.

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

  • That appraisal services were rendered in a careful and cognizant manner.

  • That a trustworthy, supportable appraisal report was conferred.
There are rigorous classroom and real world experience requirements that must be fulfilled in order to achieve the title of "licensed appraiser" in Alabama. Likewise, appraisers must obey a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Back to top) Licensing and certification takes 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 do appraisers work for?   (Back to top)

Commonly, appraisers are employed by lenders to estimate the value of a house involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does an appraiser get the information used to estimate values in Madison County or other areas?   (Back to top)

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

General data is gathered from a many sources. To research 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 look at tax records and other public documents. Appraisers often 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 service.

And most importantly, the appraiser assembles general data from his or her past experience in creating appraisals for other properties in the same market.

What can a full appraisal do for me?   (Back to top)

An appraisal is a valuable tool whenever your home's value is pertinent to a financial decision. For those selling a home, you'll want to figure out the 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. A home 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?   (Back to top)

PMI is an acronym for Private Mortgage Insurance. PMI protects the lender in the event a borrower is unable to pay on the loan and the value 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.

Did you secure your mortgage with less than 20% down? Call Griffin Appraisals today at 2567720844. You may be able to cancel your Private Mortgage Insurance payment.

How do I get ready for the appraiser?   (Back to top)

The first step in most appraisals is the property inspection. 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 we have easy access to the exterior of the house (gates aren't locked, etc). Trim any bushes and relocate any items that would get in our way while we measure the structure. On the inside, make sure we can easily access appliances like furnaces and water heaters.

You can make our visit go faster and improve the quality of the appraisal report by having the following things on hand:
  • Any information on the purchase of the property for the last three years.
  • Title policy that lists encroachments or easements.
  • Information on "Homeowners Associations" or condominium covenants and fees.
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
  • A list of "suggested" improvements when the property is being appraised "as complete".

What is "Market Value?"   (Back to top)

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."

Does the appraisal belong to the bank or the consumer?   (Back to top)

In most real estate transactions, the appraisal is ordered by the lender. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is 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 cases, the appraiser may stipulate 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.

How can I get the most ROI out of home improvements?   (Back to top)

This really depends on where the home is. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!

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 were second, returning 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.