Accurate Appraisal Associates, Inc has answers to "Frequently Asked Questions"

Accurate Appraisal Associates, Inc is always eager to talk to you about any questions you might have about appraisals or real estate in Limestone County. Don't hesitate to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
What are the reasons I would require a real estate appraisal?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
Once the appraisal has been completed, how can I have assurance that the value indicated is valid?
How difficult is it to become certified?
Who are an appraiser's customers?
Where does an appraiser get the data used to estimate values in Limestone 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?
How do I get ready for the appraiser?
Define "Market Value"
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?



Define the term "Appraisal"   (List of questions)

An appraisal report is a thought process that concludes with an opinion of value. There are three "common approaches to value" which assists the appraiser conclude this opinion or estimate. One of the methods in use is the Cost Approach, which is what it would cost to restore the improvements to the property, minus depreciation and physical dilapidation, plus the land value. Easily the most common approach in figuring the likely sales price of a home is the Sales Comparison Approach which deals with figuring a comparison to similar properties close by. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a house. One of the least common approaches in appraising residential properties is the Income Approach, which is generally used to find the value of a property based on what an investor would pay based on the capital produced by the property.

Describe what an appraiser does   (List of questions)

An appraiser provides a fair and credible assessment of market value, often in the context of a real estate exchange. Appraisers show their expert findings in appraisal reports.


What are the reasons I would require a real estate appraisal?   (List of questions)

There are a lot of reasons to get an appraisal from Accurate Appraisal Associates, Inc with the usual reason being real estate and mortgage transactions. Some other reasons for getting an appraisal report include:
  • If you are applying for a loan.
  • To lower your property taxes.
  • To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
  • To contest high property taxes.
  • If you need to settle an estate.
  • To offer you a leg-up when purchasing real estate.
  • To figure out the most probable sales price when listing your home.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because an official agency such as the IRS requires it.
  • It's possible you could be involved in a lawsuit - an appraisal will definitely help.
Click here for a more detailed explanation of the process involved in getting an appraisal.


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

The appraiser is not a home inspector and does not do a comprehensive home inspection. A third-party home inspector will judge the structure of the home, from the top to the foundation. Commonly, a home inspection report will explain the amenities and the necessities 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, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

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

To be honest, they share nothing in common. The CMA depends on vague local market trends. The appraisal is reliant on similar definite comparable sales. Area and construction values are also a priority in an appraisal. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

But the biggest difference is who's behind the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, create CMA's. A certified, Alabama licensed professional who bases their livelihood on valuing properties in and around Limestone County creates 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 previously agreed upon sum for work they perform, regardless of their outcome.

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

The main purpose of an appraisal report is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:
  • The client and other intended users.
  • How the appraisal is supposed to be used.
  • The appraisal's purpose.
  • The type of value reported 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 characteristics, including: location, physical characteristics, legal attributes, economic factors, the property rights valued, and non-real estate items included in the appraisal, such as personal property, trade fixtures 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 entailed in the activity of completing the assignment.
For a more detailed look at all that goes into an appraisal report click here: Sample Appraisal Report

Once the appraisal has been completed, how can I have assurance that the value indicated is valid?   (List of questions)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
  • The appraisal used analysis of the data.

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

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

  • The final appraisal report was easy to explain, sound and defensible.
To become a state licensed appraiser, there are strenuous education requirements as well as real world experience that must be attained - all with the objective of gaining the skills required to render unbiased value opinions. Likewise, appraisers must obey a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for working up an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (List of questions) Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. However, licensing and certification is commonly associated with many hours of coursework, tests and real world experience. Once licensed, he or she is required to take continuing education courses so the license stays up to date. 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 a home involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

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

One of the main activities of an appraiser is to assimilate property data. Data can be divided into Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.

General data is received from a many places. Local Multiple Listing Services (MLS) have information on recently sold homes that could be used as comparables. To double-check actual sales prices, we use tax records and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood servers.

And most importantly, the appraiser assembles general data from his or her collective knowledge gained from doing assignments for other houses 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. If you're selling your home, an appraisal will help you determine a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from Accurate Appraisal Associates, Inc is the best way to ensure assets are split up fairly. Simply put, a home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making informed financial decisions.

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

PMI is short for for Private Mortgage Insurance. PMI guards the lender in case a borrower defaults on the loan and the value of the home is less 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 Accurate Appraisal Associates, Inc today at (256)874-6501. You may be able to get rid of your Private Mortgage Insurance premium.

How do I get ready for the appraiser?   (List of questions)

The first step in most appraisals is the home inspection. 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. On the home's interior, make sure it is clutter free and that we can access things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of exterior walls.

You can make things go faster and improve the quality of the appraisal report by having the following things on hand:
  • Information on the latest purchase of the property in the last three years.
  • Title policy that lists encroachments or easements.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
  • Most recent real estate tax bill and or legal description of the property.

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)

In most real estate transactions, the appraisal is ordered by the lender. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The buyer is certainly entitled to a copy of the report - it's usually included 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 scenarios, 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 use the appraisal for any purpose.

Are some home improvements more worthwhile than others?   (List of questions)

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!

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 add value would be painting just for the sake of redecorating.