AA1 Appraisals LLC has answers to "Frequently Asked Questions"


	AA1 Appraisals LLC is willing to handle any concerns you might have about appraisals in Lake County. Don't hesitate to contact us today.

What is an appraisal?
Describe what an appraiser does
What would cause me to require services from AA1 Appraisals LLC?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
Once the report has been delivered, what assurance is there that the final number is legitimate?
How are appraisers certified?
Who do appraisers work for?
Where does an appraiser get the data used to estimate values in Lake 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
How does an appraiser define "Market Value"?
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?

What is an appraisal? (Return to top)

The appraisal process is an evaluation that produces an opinion of value. There are three "common approaches to value" which assists the appraiser conclude this opinion or valuation. The Cost Approach is one of the approaches that real estate appraisers use to find the value of a house; it involves discerning what the improvements would cost less physical depreciation, adding the land value. Another of the processes is the Sales Comparison Approach - which involves finding a comparable analysis to other similar properties within a close proximity which have recently sold. The Sales Comparison Approach is normally the most definitive and clearest indicator of value for a home. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it deals with estimating what an investor would pay based on the money generated by the property.

Describe what an appraiser does (Return to top)

An appraiser forumlates a fair and credible opinion of market value, to be used in making real estate transactions. Appraisers document their professional findings in appraisal reports.

What would cause me to require services from AA1 Appraisals LLC? (Return to top)

There are a lot of reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for getting an report include:

If you are applying for a loan.
To lower your property taxes.
To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
To fight inflated property taxes.
If you need to settle an estate.
To provide you a leg-up when purchasing a home.
To find a likely sales price when selling real estate.
To ensure parties are provided just compensation in eminient domain cases.
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 extensive description of the appraisal process click here.

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

The appraiser is not a home inspector nor does he/she do a complete home inspection. The point of a home inspection is to evaluate the structure of the property from foundation to top. For the most part, a home inspection report will discuss the amenities and the necessities of the house: 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, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

Is an appraisal the same as a comparative market analysis(CMA)? (Return to top)

Frankly, they have nothing in common. The CMA depends on indistinct local market trends. Appraisals use similar sales which are valid resources. Area and architectural prices are also important in an appraisal. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the most significant factor is the person behind the report. A CMA is written by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. A certified, Florida licensed professional who made their livelihood on valuing real estate in and around Lake County is behind the appraisal. Likewise, the agent has a vested interest in 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 work they perform, regardless of their value conclusion.

What's in an appraisal report? (Return to top)

Every appraisal must demonstrate a believable estimate of value and will document the following:

The client and whose purposes the appraisal is to serve.
The intended use of the report.
The appraisal's purpose.
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!)
Pertinent property attributes, including: location, physical characteristics, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible factors.
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 used while working up the assignment.

For a more in depth view of all that goes into an appraisal report click here: Sample Appraisal Report

Once the report has been delivered, what assurance is there that the final number is legitimate? (Return to top)

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

The appraisal contained an apropos analysis of the information.

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

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

The final appraisal report was transparent, credible and not easily discredited.

To become a state licensed appraiser, we must fulfill extensive education and experience requirements that prepare us to produce an unbiased opinion. Likewise, appraisers must abide by a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Return to top) Licensing and certification takes coursework, tests and experience working under a supervisor. Once an appraiser is licensed, he/she must then complete continuing education courses so the license remains up to date. To see the specific requirements for any state click here.

Who do appraisers work for? (Return to top)

Most of the time, appraisers are hired by lenders to render a value opinion on a home involved in a loan transaction - to make sure the subject is indeed adequate collateral for the loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does an appraiser get the data used to estimate values in Lake County or other areas? (Return to top)

Collecting information is one of the main tasks an appraiser engages in. Data can be described as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is gathered from a variety of sources. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. To verify actual sales prices, we research tax records and other public documents that are usually online nowadays. Appraisers often need to report when a property is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And last but not least, the appraiser gathers general data from his or her past experience in doing assignments for other properties in the same market.

How can a licensed appraiser help me? (Return to top)

An appraisal is a worthwhile whenever the value of your home is pertinent to some financial decision. For those selling a home, you'll want to determine the 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. When buying, you can avoid overpaying by getting an independent appraisal. For people settling an estate or divorce, an appraisal from AA1 Appraisals LLC is the best way to ensure assets are split up fairly. A house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

My mortgage statement has an item on it for PMI? Can I get rid of that? (Return to top)

PMI stands for Private Mortgage Insurance. It takes care of the lender in case a borrower is unable to pay on the loan and the market price of the house is less than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Did you have less than 20% to put down on your mortgage? Call AA1 Appraisals LLC today at (248) 390-7118. You may be able to save money by removing your Private Mortgage Insurance payment.

Should I do anything in advance of the appraisal inspection (Return to top)

The first step in most appraisals is the property inspection. 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 features. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and relocate any items that would make it difficult to measure the structure. Indoors, make sure we can get to items like furnaces and water heaters.

To help expedite our work plus ensure a more accurate report, try if possible to have the following items:

A survey or plot map of the property and building (if available).
List of personal property to be sold with the home.
Most recent real estate tax bill from Lake and or legal description of the property.
A list of any major home improvements and enhancements, the date of their installation and their cost (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 .

How does an appraiser define "Market Value"? (Return 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 has rights to the appraisal report? (Return 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 certainly 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.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these situations, the appraiser may state 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.

How can I get the most ROI out of home improvements? (Return to top)

The answer to this is different depending upon the location of the home. 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

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 were second, returning 85%. On the contrary, work that may not add value would be painting just for the sake of redecorating.