RL Carmichael & Assoc, Inc. has answers to "Frequently Asked Questions"


	RL Carmichael & Assoc, Inc. is willing to address any questions you might have about appraisals or real estate in Chesapeake City County. Contact RL Carmichael & Assoc, Inc. today to see how we can help you with your valuation problems.

Describe an appraisal
What does an appraiser do?
Why would someone need your services?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
After completing the appraisal, what assurance is there that the final number is valid?
How are appraisers certified?
Who do appraisers work for?
Where does RL Carmichael & Assoc, Inc. get the data used to estimate values in Chesapeake City County or other areas?
How can a licensed appraiser help me?
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 is "Market Value?"
Does the appraisal belong to the bank or the consumer?
Which home renovations add the most to the price?

Describe an appraisal (See list of FAQ's)

An appraisal is an evaluation that concludes with an opinion of value. This opinion or estimate is found through a formal process that generally utilizes three "common approaches to value". The Cost Approach is one of the processes that appraisers use to find value; it involves figuring what the improvements would cost minus physical deterioration, plus the land value. Another of the approaches is the Sales Comparison Approach - which involves finding a comparison to other similar properties within a close proximity which have recently sold. Being the most common approach, the Sales Comparison Approach is generally the most accurate and best indicator of value for a residential property. One of the least common approaches in appraising residential properties is the Income Approach, which is mainly used to find the worth 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 generates a professional, unbiased opinion of market value, to be used in making real estate transactions. Appraisers summarize their conclusions in appraisal reports.

Why would someone need your services? (See list of FAQ's)

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

To receive a loan.
To reduce your tax burden.
To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
To contest inflated property taxes.
If you need to take care of an estate.
To provide you an edge when purchasing real estate.
To determine a likely price when selling real estate.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
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.

If you need a more detailed explanation of the appraisal process, please click here.

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

The appraiser is not a home inspector and he or she does not do a comprehensive home inspection. An inspection is a third-party investigation of the accessible structure and systems of a home, from the roof to the bottom. The archetypal home inspector's report will include an evaluation of the integrity of the house's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

Is an appraisal the same as a comparative market analysis(CMA)? (See list of FAQ's)

Simply, they have nothing in common. What the CMA relies upon are ill-defined trends. The appraisal is reliant on similar verifiable comparable sales. Area and construction values 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.

The credentials of the person creating the report is actually the most significant difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, Virginia licensed professional who made their livelihood on valuing properties in and around Chesapeake City County creates the appraisal. Further, the appraiser is an independent voice, with no vested interest in the value conclusion, unlike the agent, who gets a commission based upon the value of the home.

What can I expect to see in my appraisal report? (See list of FAQ's)

Each report must reflect a believable estimate of value and should document 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 reported and a definition of the value reported.
The effective date of the appraisal.(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 description, 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 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.
What was entailed in the activity of completing the assignment.

For a more detailed view of the work that goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, what assurance is there that the final number is valid? (See list of FAQ's)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:

That the information analysis contained in the appraisal was appropriate.

Whether individually or collectively, there were no significant errors contained in the report, nor any relevant details left out.

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

That a believable, supportable appraisal report was communicated.

To become a state licensed appraiser, there are intense education requirements as well as experience that must be attained. Plus, appraisers must follow a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's)

Licensing and certification is achieved through coursework, tests and real world experience. Once an appraiser is licensed, he or she must then complete continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who do appraisers work for? (See list of FAQ's)

Mortgage lenders are an appraiser's typical client, needing their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does RL Carmichael & Assoc, Inc. get the data used to estimate values in Chesapeake City County or other areas? (See list of FAQ's)

One of the most important things an appraiser does is to collect data. Data can be described as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is collected from a many places. Local Multiple Listing Services (MLS) provide data on recently sold homes that could be used as comparables. Tax records and other public documents reveal actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood system.

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

How can a licensed appraiser help me? (See list of FAQ's)

If you're making any kind of financial decision and the value of your home is relevant, you'll want a full appraisal. When selling your house, an appraisal assists you in setting the most appropriate price. When buying, be sure you're not overpaying by commissioning an independent appraisal. 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 worth means you can make smart financial decisions.

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

PMI is short for for Private Mortgage Insurance. This added policy guards the lender if a borrower doesn't pay on the loan and the market price of the home is less than what is owed 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.


	The savings from dropping the PMI required when you got your mortgage will make up for the cost of the appraisal in no time. Nobody is more qualified than RL Carmichael & Assoc, Inc. when it comes to appreciating values in Chesapeake and Chesapeake City County. Contact us today.

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

We begin with an inspection of the property. 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 status of its features. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house . Trim any shrubs and move any items that would get in our way while we measure the structure. On the inside, make sure the appraiser can easily access appliances like furnaces and water heaters.

You can make things go faster and improve the accuracy of the appraisal report by having the following things on hand:

Records on the latest purchase of the property in the last three years.
Title policy that lists encroachments or easements.
Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .
Locate copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
A list of "proposed" improvements if the property is to be appraised "as complete".

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

Market value or fair market value is the most probable price that a property should bring (will sell for) in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, 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: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised; (3) a reasonable time is allowed for exposure to the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) 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)

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 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 situations, the appraiser may define the purpose of the appraisal; 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)

It really depends on the market. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.

As a rule, the best ROI 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, yielding 85%. Adding bedrooms and baths can also help the value of your home (when done well) as long as your home doesn't then become an oddball for your neighborhood in terms of size.