Elite Appraisals has answers to "Frequently Asked Questions"


	Elite Appraisals is more than happy to talk to you about any questions you might have about appraisals or real estate in Saint Francis County. Don't hesitate to contact us today.

Define the term "Appraisal"
What does an appraiser do?
Why would a person request your services?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What's in an appraisal report?
After completing the report, what guarantee is there that the value indicated is accurate?
What does it mean for an appraiser to be licensed?
Who hires Elite Appraisals
Where does Elite Appraisals get the information used to estimate values in Saint Francis 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?
Once complete, who actually owns the appraisal report?
Are some home improvements more worthwhile than others?

Define the term "Appraisal" (List of questions)

The method of producing an appraisal report deals with an estimation which leads to an opinion of value. There are three "common approaches to value" which assists the appraiser come to this opinion or valuation. One of the processes 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. Another of the approaches is the Sales Comparison Approach - which concerns finding a comparable analysis to other similar nearby properties which have recently sold. Being the most common approach, the Sales Comparison Approach tends to be the most precise and best indicator of market value for a home. One of the least common approaches in appraising homes is the Income Approach, which is mainly used to find the market value of a property based on what an investor would pay based on the income produced by the building.

What does an appraiser do? (List of questions)

An appraiser offers a professional, unbiased assessment of market value, to be used in making real estate transactions. Appraisers illustate their analysis in appraisal reports.

Why would a person request your services? (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 ordering an report include:

To obtain a loan.
To lower your tax burden.
To demonstrate a homeowner's acquired equity and remove PMI.
To challenge high property taxes.
If you need to settle an estate.
To provide you a leg-up when purchasing real estate.
To determine an honest 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.
Because a government agency such as the IRS requires it.
If you are ever involved in a lawsuit.

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

How is an appraiser different than a home inspector? (List of questions)

The appraiser is not a home inspector and he or she does not do a complete home inspection. A third-party home inspector will evaluate the structure of the home, from the top to the bottom. The archetypal property 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.

My agent performed a CMA for me. Is that the same as an appraisal? (List of questions)

To be honest, they share nothing in common. The CMA utilizes market trends to conduct most of their business. Appraisals use comparable sales which are verifiable resources. The appraisal report will also contain location and construction values. 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.

But the largest differentiator is who's doing the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. A certified, Oklahoma licensed professional who bases a career on valuing real estate in and around Saint Francis County is behind the appraisal. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat fee for work they perform, regardless of their outcome.

What's in an appraisal report? (List of questions)

The main objective of an appraisal document is to give a value opinion, and depending on the scope of the report, one will customarily see the following:

The client and other intended users.
The intended use of the appraisal.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraiser's opinions and conclusions.(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 attributes, the real property interest valued, and non-real estate items included in the valuation, 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.
The scope of work used to complete the appraisal.

For a more detailed look at all that goes into an appraisal report click here: Sample Appraisal Report

After completing the report, what guarantee is there that the value indicated is accurate? (List of questions)

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

The appraisal contained an apropos analysis of the data.

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

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

The final appraisal report was transparent, credible and conclusive.

There are intense education and real world experience requirements that must be satisfied in order to get an appraisal license in Oklahoma. In addition, appraisers must follow a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The rules for developing an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(List of questions) Regulations regarding licensing and certification vary from state to state. In general, licensing and certification is most often associated with many hours of coursework, tests and real world experience. Once licensed, he/she must then take continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who hires Elite Appraisals (List of questions)

Typically, appraisers are called upon by lenders to render a value opinion on a house involved in a loan transaction - to make sure the real estate is truly adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Elite Appraisals get the information used to estimate values in Saint Francis County or other areas? (List of questions)

One of the main tasks an appraiser must accomplish is to collect property data. Data can be described as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.

General data is gathered from a numerous sources. To look up recent sales to be used as "comps", an appraiser will often go to the local Multiple Listing Service. Tax records and other public documents verify actual sales prices in a market. Appraisers routinely have 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 last but not least, the appraiser gathers general data from his or her past experience in creating appraisals for other houses in the same market.

Why do I need a professional appraisal? (List of questions)

An appraisal is a worthwhile anytime the value of your home is relevant to some financial decision. For those selling a home, you'll want to determine a price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Elite Appraisals is the best documentation to ensure assets are split up properly. Simply put, a home 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? (List of questions)

PMI is an acronym for Private Mortgage Insurance. This supplemental plan guards the lender if a borrower is unable to pay on the loan and the value of the house is lower than what the borrower still owes on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	The savings from cancelling your PMI pays for the appraisal in no time. Elite Appraisals stays current with real estate value trends in Oklahoma City and Saint Francis County. Contact us today.

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

We begin 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. Inside, make sure it is clutter free and that we can get to things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of outside walls.

To help speed things along plus ensure a more accurate report, try if possible to have the following items:

Any records on the purchase of the property for the last three years.
List of personal property to be sold with the home.
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).
Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .

What does "Market Value" mean? (List of questions)

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."

Once complete, who actually owns the appraisal report? (List of questions)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. 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 entitled to a copy of the report - it's usually included with all the other closing documents - but is not allowed 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 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.

Are some home improvements more worthwhile than others? (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 investment. 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 weren't far behind, returning 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.