Whitson Appraisals has answers to "Frequently Asked Questions"


	Whitson Appraisals is always willing to elaborate on any inquiries you might have about appraisals in Sumner County. Don't hesitate to contact us today.

What is an appraisal?
What does an appraiser do?
What are the reasons a person would require services from Whitson Appraisals?
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's in an appraisal report?
After completing the report, how can I have a guarantee that the value conclusion is valid?
What are the requirements to be a certified appraiser?
Who hires Whitson Appraisals
Where does Whitson Appraisals get the data used to estimate values in Sumner County or other areas?
Why do I need a professional appraisal?
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 inspection
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
Which home renovations add the most to the price?

What is an appraisal? (See list of FAQ's)

The method of performing an appraisal report deals with an estimation which leads to an opinion of value. The appraiser must use a several "approaches," typically three, to come to the estimation of market value. The Cost Approach is one of the methods that appraisers use to find the value of a home; it involves figuring what the improvements would cost less physical deterioration, adding the land value. Easily the most common approach in finding the likely sales price of a home is the Sales Comparison Approach which concerns figuring a comparison to similar homes 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 income produced by the building.

What does an appraiser do? (See list of FAQ's)

An appraiser produces a fair and credible opinion of market value, in the support of real property transactions. Appraisers reveal the details of their conclusions in appraisal reports.

What are the reasons a person would require services from Whitson Appraisals? (See list of FAQ's)

There are a lot of reasons to order an appraisal from Whitson Appraisals with the most common reason being real estate and mortgage transactions. Other reasons for purchasing an appraisal include:

To obtain a loan.
To reduce your property taxes.
To build a case for a homeowner's equity and remove insurance.
To contest inflated property taxes.
If you need to take care of an estate.
To give you a negotiating tool when purchasing real estate.
To figure out a likely 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 a government agency such as the IRS requires it.
It's possible you could have to deal with being in a lawsuit - an appraisal will help.

For a more detailed explanation of the appraisal process click here.

What is the difference between an appraisal and a home inspection? (See list of FAQ's)

Appraisers do not do complete house inspections and are not home inspectors. An inspection is a third-party investigation of the livable structure and systems of a home, from the top to the bottom. Generally, a home inspection report will discuss the amenities and the requirements of the house: air conditioning (weather permitting), electrical functions, 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.

What is the difference between an appraisal and a comparative market analysis (CMA)? (See list of FAQ's)

Simply, they have nothing in common. What the CMA relies upon are superficial trends. Appraisals use similar sales which are valid resources. In addition, the appraisal checks other factors like condition, location and building costs. All a CMA does is generate a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

Who's creating the report is hands down the most significant difference between a CMA and an appraisal. Real estate agents produce CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. 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 collect only a previously agreed upon sum for assignments, regardless of their outcome.

What's in an appraisal report? (See list of FAQ's)

Each appraisal should reflect a supported value opinion and must clearly state the following:

Who engaged the appraiser and other intended users.
How the appraisal is supposed to be used.
The purpose of the appraisal.
The type of value contained and a definition of that value.
The effective date of the appraiser's opinions and conclusions.
Relevant property characteristics, including: location, physical characteristics, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible considerations.
All 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.
The scope of work considered when completing the job.

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

After completing the report, how can I have a guarantee that the value conclusion is valid? (See list of FAQ's)

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

The appraisal contained an apropos analysis of the information.

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

That appraisal services were not conducted in a careless or negligent fashion.

That a believable, supportable appraisal report was conferred.

There are intense classroom and practical experience requirements that must be met in order to become a licensed appraiser in Tennessee. Likewise, appraisers must follow a stringent industry code of ethics and comply with 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).

(See list of FAQ's) Regulations regarding licensing and certification are different from state to state. In general, licensing and certification typically translates to many hours of coursework, tests and experience working under a supervisor. Once licensed, he or she is required to complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who hires Whitson Appraisals (See list of FAQ's)

Mortgage lenders are an appraiser's most likely client, requiring their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Whitson Appraisals get the data used to estimate values in Sumner County or other areas? (See list of FAQ's)

Compiling information is one of the primary functions of an appraiser. Data can be split into Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.

General data is gathered from a many sources. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. 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, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And most importantly, the appraiser assimilates general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.

Why do I need a professional appraisal? (See list of FAQ's)

An appraisal is a valuable tool whenever the value of your home is relevant to some financial decision. For those selling a home, you'll want to figure out a price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. When buying, you can avoid overpaying by commissioning an independent appraisal. For those settling an estate or divorce, an appraisal from Whitson Appraisals is the best documentation to ensure assets are divided fairly. A house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.

My mortgage statement has an item on it for PMI? Can I get rid of that? (See list of FAQ's)

PMI stands for Private Mortgage Insurance. This added policy guards the lender in case a borrower defaults on the loan and the market price of the house is lower than what the borrower still owes on 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 Whitson Appraisals today at 6153085035. You may be able to save money by removing your Private Mortgage Insurance payment.

Should I do anything in advance of the appraisal inspection (See list of FAQ's)

We start with an inspection of the property. 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. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and move any items that would get in our way while we measure the structure. On the inside, make sure we can get to appliances like furnaces and water heaters.

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

A survey or plot map of the property and building (if available).
Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
A list of "proposed" improvements when the property is being appraised "as complete".

What does "Market Value" mean? (See list of FAQ's)

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? (See list of FAQ's)

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 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.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these situations, the appraiser may define how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.

Which home renovations add the most to the price? (See list of FAQ's)

The added value of a particular amenity truly depends on the local market. 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. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms weren't far behind, returning 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.