FAQ

APPRAISAL FAQ IN SOUTHEAST LOUISIANA

What Is An Appraisal?

An appraiser provides an estimation that produces an opinion of value. The appraiser will use a few "approaches," typically three, to conclude the estimation of market value. The Cost Approach is one of the processes that real estate appraisers use to find value; it involves concluding what the improvements would cost less physical degradation, plus the land value. The Sales Comparison Approach involves searching for comparable homes nearby and figuring out the value based on comparing those houses to the house in question. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a home. One of the least common approaches in appraising homes 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?

An appraiser generates a professional, unbiased opinion of market value, often in the context of a real estate sale. Appraisers document their expert findings in appraisal reports.

What Are The Reasons Someone Would Require A Real Estate Appraisal?

There are many reasons to order an appraisal from Hartzog and Associates/Northlake Appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for ordering a report include:
  • Obtain a loan
  • Lower your property tax burden
  • Build a case for a homeowners equity and remove insurance
  • Fight inflated property taxes
  • If you need to take care of an estate
    • To offer you a leg-up when purchasing a home
    • To figure out a reasonable sales price when listing your home
    • To defend your rights if your property is being taken by means of eminent domain in a condemnation case
    • An official agency, such as the IRS, requires it
    • If you are being involved in a lawsuit

      Is an Appraisal The Same As A Home Inspection?

      Appraisers do not do complete residential property inspections and are not home inspectors. An inspection is a third-party evaluation of the accessible structure and appliances of a home, from the top to the foundation. The standard property inspector's report will include 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.

      My Agent Performed A CMA For Me. Is That The Same As An Appraisal?

      To be blunt, it's night and day. The CMA depends on indefinite local market trends. The appraisal relies on similar valid comparable sales. Area and architectural costs are also important in an appraisal. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

      The credentials of the person creating the report is hands down the most significant difference between a CMA and an appraisal. A CMA is created 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, state licensed professional who made their livelihood on valuing real estate in and around Saint Tammany County creates 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 fee for assignments, regardless of their value conclusion.

      What Does The Appraisal Report Contain?

      Every report must demonstrate a supported value opinion and should clearly state the following:
      • Who engaged the appraiser and whose purposes the appraisal is to serve
      • How the appraisal is supposed to be used
      • The appraisals purpose
      • Precisely what "value" attribute is being reported and what that value means
      • The effective date of the value opinion
      • Characteristics of the property that have a bearing on the value, including:
        • Location
        • Physical characteristics
        • legal attributes
          • economic attributes
          • the real property interest in question
          • non-real estate items included in the appraisal
            • All known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, etc.
            • Division of interest
            • What was involved in the process of completing the appraisal

              Who Hires The Appraiser?

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

              Where Does An Appraiser Get The Information Used To Estimate Values?

              One of the primary tasks an appraiser performs is to gather property data. Data can be classified as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.

              General data is collected from a variety of places. To research recently sold homes to be used as "comps", we often use the local Multiple Listing Service. To verify actual sales prices, we use items in the assessor's office and other public documents that are usually online nowadays. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood servers.

              And last but not least, the appraiser assembles general data from his or her past experience in creating appraisals for other houses in the same market.

              What Can A Full Appraisal Do For Me?

              An appraisal is a valuable tool 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 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. 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. Without knowing its real value, wise financial decisions are impossible.
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