Karen Lorona Appraisals, Inc has answers to "Frequently Asked Questions"


	Karen Lorona Appraisals, Inc. is ready to reply to any concerns you might have about appraisals in Harrison, Hancock & Jackson County. Don't hesitate to contact us today.

What is an appraisal?
What does an appraiser do?
What are the reasons someone would need services from Karen Delk & Associates, Inc?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What's in an appraisal report?
Once the assignment has been completed, what assurance is there that the final number is trustworthy?
How are appraisers certified?
Who hires an appraiser?
Where does Karen Delk & Associates, Inc get the data used to estimate values in Harrison 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?
How do I get ready for the appraiser?
How does an appraiser define "Market Value"?
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?

What is an appraisal? (List of questions)

An appraisal report is a thought process that concludes with an opinion of value. The real estate appraiser will typically use a several "approaches," typically three, to draw up the estimation of market value. The Cost Approach is one of the approaches that real estate appraisers use to find the value of a property; it involves discerning what the improvements would cost minus physical depreciation, adding the land value. Easily the most common approach in figuring the likely sales price of a house is the Sales Comparison Approach which deals with making a comparison to similar houses close by. The Sales Comparison Approach is commonly the most definitive and clearest indicator of value for a residence. One of the least common approaches in appraising houses is the Income Approach, which is mainly used to figure the value of a property based on what an investor would pay based on the capital produced by the property.

What does an appraiser do? (List of questions)

An appraiser generates an impartial and well substantiated determination of market value, to be used in making real estate transactions. Appraisers illustate their findings in appraisal reports.

What are the reasons someone would need services from Karen Lorona Appraisals, Inc? (List of questions)

There are a lot of reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for ordering an appraisal include:

To get a loan.
To lower your property taxes.
To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
To fight improperly assessed property taxes.
If you need to settle an estate.
To offer you a leg-up when purchasing real estate.
To determine a reasonable price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS need an appraisal on every house.
If you ever find yourself in a lawsuit.

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

How is an appraisal different than a home inspection? (List of questions)

Home inspectors do not provide an opinion of value and do not use the same forms as appraisers. The point of a home inspection is to evaluate the structure of the home from foundation to rooftop. The stereotypical property inspector's report will contain an evaluation of the integrity of the home's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

What is the difference between an appraisal and a comparative market analysis (CMA)? (List of questions)

Frankly, it's like comparing broadband and dial-up. The CMA uses market trends to generate most of their business. The appraisal is reliant on specific definite comparable sales. The appraisal report will also contain area and building prices. The CMA will provide a non-specific 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 hands down the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. A certified, state licensed professional who made a career on valuing real estate in and around Harrison County creates the appraisal. Moreover, 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's in an appraisal report? (List of questions)

The main objective of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, you'll usually see the following:

Who engaged the appraiser and other intended users.
How the appraisal is supposed to be used.
The appraisal's purpose.
The type of value contained and a definition of the value reported.
The effective date of the appraisal.
Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible items.
Any 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.
What was included in the process of completing the appraisal.

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

Once the assignment has been completed, what assurance is there that the final number is trustworthy? (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 major errors of omission or commission were not committed individually or collectively.

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

That a credible, supportable appraisal report was communicated.

To become a state licensed appraiser, there are extensive education requirements as well as on the jobexperience that must be logged. Likewise, appraisers must follow a stringent 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).

(List of questions) Regulations regarding licensing and certification are different from state to state. In general, licensing and certification is commonly associated with many hours of classroom study, tests and practical experience. Once an appraiser is licensed, he/she is required to take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who hires an appraiser? (List of questions)

Mortgage lenders are an appraiser's typical client, needing their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does Karen Lorona Appraisals, Inc get the data used to estimate values in Harrison County or other areas? (List of questions)

One of the main tasks an appraiser performs is to gather data. Data can be categorized as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is gathered from a number of sources. To research recent sales to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. To double-check actual sales prices, we research items in the assessor's office and other public documents. Appraisers often have to report when a property lies in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

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? (List of questions)

If you're involved in any kind of financial decision and the value of your home is relevant, you'll want a full appraisal. For those selling a home, you'll want to determine 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. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from Karen Delk & Associates, Inc is the best way to ensure assets are split up fairly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making informed financial decisions.

My mortgage statement has an item on it for PMI? Can I get rid of that? (List of questions)

PMI stands for Private Mortgage Insurance. This supplemental policy protects the lender in the event a borrower defaults on the loan and the value of the house 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.


	Does your monthly loan payment have a lineitem for PMI?Call Karen Delk & Associates, Inc today at 2283881171 or send us an e-mail. Documentation of your home's current value could save you thousands.

How do I get ready for the appraiser? (List of questions)

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, pick up any clutter and make sure we can find our way to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of exterior walls.

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

A plot plan or survey of the house and land (if available).
List of personal property to be sold with the home.
Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .

How does an appraiser define "Market Value"? (List of questions)

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? (List of questions)

For mortgage transactions, the lender requests 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 certainly entitled to a copy of the report - it's usually bundled with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

This rule doesn't apply when a home owner hires an appraiser directly. In these cases, the appraiser may state 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 use the appraisal for any purpose.

Are some home improvements more worthwhile than others? (List of questions)

This really depends on where the home is. 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 most value returned from renovating a home comes in the kitchen. 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 were second, returning 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.