Carolina Appraisal Group has answers to "Frequently Asked Questions"

Carolina Appraisal Group is always ready to talk to you about any inquiries you might have about appraisals in Cleveland County. Feel free to contact us today.

Describe an appraisal
Describe what an appraiser does
Why would someone require services from Carolina Appraisal Group?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
After completing the appraisal, how can I have confidence that the value indicated is valid?
How are appraisers certified?
Who employs appraisers?
Where does Carolina Appraisal Group get the information used to estimate values in Cleveland County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
Does the appraiser need anything from the homeowner in advance?
How does an appraiser define "Market Value"?
Who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?



Describe an appraisal   (Back to top)

An appraisal report is an evaluation allowing the appraiser to come to an opinion of value. This opinion or estimate is concluded by a formal method that commonly utilizes the three main "common approaches to value". One of the processes in use is the Cost Approach, which evaluates what it would cost to replace the improvements to the property, minus depreciation and physical deterioration, plus the land value. Another of the processes is the Sales Comparison Approach - which deals with discovering a comparison to other similar properties within a close proximity which have recently sold. The Sales Comparison Approach is normally the most definitive and best indicator of value for a house. The third approach is the Income Approach, which is the best method in appraising income producing properties - it involves estimating what an investor would pay based on the capital produced by the property.

Describe what an appraiser does   (Back to top)

An appraiser forumlates a professional, unbiased opinion of market value, in the support of real estate transactions. Appraisers reveal the details of their expert findings in appraisal reports.


Why would someone require services from Carolina Appraisal Group?   (Back to top)

There are many reasons to obtain an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal include:
  • To get a loan.
  • To lower your property taxes.
  • To show a homeowner has 30% equity and remove PMI.
  • To contest improperly assessed property taxes.
  • If you need to take care of an estate.
  • To provide you an edge when purchasing real estate.
  • To figure out a likely price when putting your home on the market.
  • To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Government agencies such as the IRS need an appraisal on every house.
  • If you are ever involved in a lawsuit.
For a more extensive explanation of the appraisal process click here.


How is an appraisal different than a home inspection?   (Back to top)

Appraisers do not do complete home inspections and are not home inspectors. An inspection is a third-party evaluation of the livable structure and systems of a property, from the roof to the foundation. Commonly, a home inspection report will explain the amenities and the requirements of the property: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

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

To be honest, they have nothing in common. The CMA utilizes market trends to generate most of their business. An appraisal utilizes comparable sales that can be validated by records. Location and architectural costs are also precedent in an appraisal. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the biggest difference is who's creating the report. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, state licensed professional who made their livelihood on valuing homes in and around Cleveland 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 fee for assignments, regardless of their value conclusion.

What can I expect to see in my appraisal report?   (Back to top)

Every appraisal should indicate a believable value opinion and will identify the following:
  • The client and other intended users.
  • How the appraisal is supposed to be used.
  • The purpose of the appraisal.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraiser's opinions and conclusions.
  • Relevant property characteristics, including: location, physical attributes, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible considerations.
  • 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 used to complete the job.
For a more in depth look at what goes into an appraisal report click here: Sample Appraisal Report


After completing the appraisal, how can I have confidence that the value indicated is valid?   (Back to top)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • The appraisal used a suitable analysis of the information.

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

  • That appraisal services were not carried out in a careless or negligent manner.

  • That a trustworthy, defensible appraisal report was imparted.
There are rigorous classroom and on the job experience requirements that must be adhered to in order to get an appraisal license in North Carolina. In addition, appraisers must abide by a strict industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for developing an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Back to top) Licensing and certification takes classroom study, tests and experience working under a supervisor. Once an appraiser is licensed, he/she must then complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers?   (Back to top)

Commonly, appraisers are hired by mortgage lenders to estimate the value of real estate involved in a loan transaction - to make sure the subject is truly adequate collateral for the loan. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does Carolina Appraisal Group get the information used to estimate values in Cleveland County or other areas?   (Back to top)

Collecting information is one of the primary roles of an appraiser. Data can be described as either Specific or General. Specific data is gathered from the property 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 find out about recently sold homes to be used as "comps", we typically use the local Multiple Listing Service. To double-check actual sales prices, we research tax records and other public documents. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood service.

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 do I need a professional appraisal?   (Back to top)

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 house, an appraisal assists you in setting 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. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value means you can make informed financial decisions.


What exactly is PMI and how can I get rid of it?   (Back to top)

PMI stands for Private Mortgage Insurance. This supplementary plan covers the lender if a borrower defaults on the loan and the market price of the property is less than what the borrower still owes on the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.

The savings from dropping the PMI required when you got your mortgage pays for the appraisal in no time. Nobody is more qualified than Carolina Appraisal Group when it comes to analyzing real estate appreciation in Shelby, and Cleveland County. Contact us today.

Does the appraiser need anything from the homeowner in advance?   (Back to top)

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 condition of its amenities. Inside, make sure it is clutter free and that we can find our way to things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of outside walls.

You can make the inspection go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • Any information on the purchase of the property for the last three years.
  • Written property agreements, such as a maintenance easement for a shared driveway.
  • Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
  • Brag sheet that lists 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).
  • A list of "proposed" improvements when the property is being appraised "as complete".

How does an appraiser define "Market Value"?   (Back to top)

In real estate appraising, Market Value (as opposed to Fair 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?   (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 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 stipulate the purpose of the appraisal; 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.


I want to get more for my house. Where should I spend money renovating?   (Back to top)

This really depends on where the home is. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 are right up there with kitchens, yielding 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.