Ring and Associates has answers to "Frequently Asked Questions"


	Ring and Associates is always prepared to answer any inquiries you might have about appraisals or real estate in Jackson County. Contact us today to talk about how we can help solve your valuation problems.

Define the term "Appraisal"
Describe what an appraiser does
What are the reasons I would request services from Ring and Associates?
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?
Upon completion of the appraisal, how can I have assurance 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 Jackson County or other areas?
How can a licensed appraiser help me?
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"?
Does the appraisal belong to the bank or the consumer?
Which home renovations add the most to the price?

Define the term "Appraisal" (List of questions)

The process of performing an appraisal consists of an evaluation which leads to an opinion of value. There are three "common approaches to value" which helps the appraiser come to this opinion or estimate. One of the methods is the Cost Approach - which is what it would cost to replace the improvements, less physical deterioration and other factors, then adding the land value. The Sales Comparison Approach deals with searching for similar houses nearby and discerning value based on comparing those properties to the house being investigated. Being the most commonly used approach, the Sales Comparison Approach is considered the most precise and best indicator of market value for a property. The Income Approach is mainly used for finding the market value of income-producing properties based on what an investor would pay based on the amount of income a property produce.

Describe what an appraiser does (List of questions)

An appraiser forumlates a professional, unbiased determination of market value, to be used in making real estate transactions. Appraisers document their findings in appraisal reports.

What are the reasons I would request services from Ring and Associates? (List of questions)

There are many reasons to get an appraisal with the most common reason being real estate and mortgage transactions. Some other reasons for purchasing an appraisal report include:

If you are applying for a loan.
If you would like to reduce your property tax obligations.
To demonstrate a homeowner's acquired equity and remove PMI.
To fight inflated property taxes.
To handle an estate.
To offer you a leg-up when purchasing a home.
To determine a likely sales price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS need an appraisal on every house.
If you ever find yourself in a lawsuit.

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

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

Home inspectors do not figure out an opinion of value and do not use the same forms as appraisers. An inspection is a third-party evaluation of the available structure and electrical and mechanical systems of a house, from the top to the bottom. The archetypal property inspector's report will contain an evaluation of the condition of the house's heating system, 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)? (List of questions)

Simply put, it's apples and oranges. What the CMA depends on are vague trends. An appraisal relies on comparable sales that can be verified by public record. Area and construction prices are also important in an appraisal. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

But the most significant factor is the person behind the report. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Moreover, the appraiser is an independent party, with no conditional interest in the property's value, unlike the agent, who gets a commission based upon the price of the home.

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

The main objective of an appraisal report is to provide a value opinion, and depending on the scope of the report, you'll usually see the following:

The client and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The purpose of the assignment.
The type of value contained and a definition of that value.
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 attributes, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible items.
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.
What was involved in the process of completing the assignment.

For a more in depth look at the work that goes into an appraisal report click here: Sample Appraisal Report

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

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

That the information analysis utilized in the appraisal was suitable.

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

That appraisal services were provided in a careful and judicious fashion.

That a credible, substantiated appraisal report was communicated.

To become a state licensed appraiser, we must satisfy intense education and experience requirements that enable us to produce an unbiased opinion. Plus, appraisers must follow a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The tenets 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 takes coursework, tests and practical experience. Once an appraiser is licensed, he or she is required to engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers? (List of questions)

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 information used to estimate values in Jackson County or other areas? (List of questions)

One of the main things an appraiser does is to collect data. Data can be classified as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specifics are gathered by the appraiser while on site.

General data is collected from a many places. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. Tax records and other public documents verify 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 assimilates general data from his or her past experience in doing assignments for other houses in the same market.

How can a licensed appraiser help me? (List of questions)

If you're making some sort of financial decision and the value of your home is relevant, you'll want a full appraisal. If you're selling your home, an appraisal helps you set the most appropriate price. 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. Knowing its true value means you can make the right financial decisions.

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

PMI is the common abbreviation for for Private Mortgage Insurance. It guards the lender in the event a borrower doesn't 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.


	Is PMI a lineitem in your monthly house payment?Call Ring and Associates today at 678-765-1347 or send us an e-mail. Documentation of your home's present value could save you thousands.

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

The first step in most appraisals is the property inspection. 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 condition of its amenities. On the home's interior, pick up any clutter and make sure we can access things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of exterior walls.

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

A plot plan or survey of the house and land (if available).
Information on any written private agreements, such as a shared driveway with a neighbor.
A bill for your most recent real estate taxes which should also contain a legal description of the property.
A list of any major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
Information on "Homeowners Associations" or condominium covenants and fees.

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."

Does the appraisal belong to the bank or the consumer? (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 entitled to a copy of the appraisal - 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.

This rule doesn't apply when a home owner engages an appraiser directly. In these cases, the appraiser may state the purpose of the appraisal; 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.

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

Like all things real estate, this is dependent on a home's location. 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 move. 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, yielding 85%. On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.