Josh Anderson Appraisals, INC. has answers to "Frequently Asked Questions"


	Josh Anderson Appraisals, INC. is ready to answer any inquiries you might have about appraisals or real estate in Calcasieu County. Contact Josh Anderson Appraisals, INC. today to learn how we can help you with your specific valuation problems.

Define the term "Appraisal"
Describe what an appraiser does
What are the reasons a person would require services from Josh Anderson Appraisals, INC.?
Is an appraisal the same as a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What's in an appraisal report?
Once the report is done, how can I have confidence that the value conclusion is trustworthy?
What does it mean for an appraiser to be licensed?
Who are an appraiser's customers?
Where does an appraiser get the data used to estimate values in Calcasieu County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
Do you need anything from me in advance?
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?

Define the term "Appraisal" (Back to top)

An appraisal report is an inspection that concludes with an opinion of value. The appraiser must use a several "approaches," typically three, to draw up the estimation of market value. One of the three is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value. Easily the most common approach in finding the likely sales price of a house is the Sales Comparison Approach which concerns making a comparison to similar houses close by. The Sales Comparison Approach is commonly the most accurate and best indicator of a liklely sales price for a residence. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it involves estimating what an investor would pay based on the money produced by the property.

Describe what an appraiser does (Back to top)

An appraiser produces an unbiased and well substantiated opinion of market value, in the support of real property exchanges. Appraisers summarize their findings in appraisal reports.

What are the reasons a person would require services from Josh Anderson Appraisals, INC.? (Back to top)

There are many reasons to purchase an appraisal from Josh Anderson Appraisals, INC. with the most common reason being real estate and mortgage transactions. Some other reasons for ordering an appraisal include:

If you are applying for a loan.
To lower your tax burden.
To demonstrate a homeowner's acquired equity and remove insurance.
To challenge inflated property taxes.
To settle an estate.
To provide you a negotiating tool when purchasing real estate.
To figure out a reasonable property value when putting your home on the market.
To ensure parties are provided just compensation in eminient domain cases.
Because a government agency such as the IRS requires it.
If you are ever involved in a lawsuit.

Click here for a more extensive explanation of the process involved in getting an appraisal.

Is an appraisal the same as a home inspection? (Back to top)

The appraiser is not a home inspector and he or she does not do a complete home inspection. The purpose of a home inspection is to evaluate the structure of the home from basement to attic. For the most part, a home inspection report will discuss the amenities and the necessities of the home: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

My agent performed a CMA for me. Is that the same as an appraisal? (Back to top)

Simply put, it's night and day. The CMA utilizes market trends to create most of their business. Appraisals use comparable sales which are valid resources. The appraisal report will also contain area and construction prices. 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.

Who's creating the report is hands down the most significant difference between a CMA and an appraisal. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, state licensed professional who has formed a career on valuing properties in and around Calcasieu 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 fee for assignments, regardless of their value conclusion.

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

Each report must indicate a credible value opinion and must clearly state the following:

The client and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The reason for the appraisal.
The type of value contained and a definition of the value reported.
The effective date of the appraiser's opinions and conclusions.
Pertinent property characteristics, including: location, physical characteristics, 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 considerations.
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.
The scope of work used to complete the assignment.

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

Once the report is done, how can I have confidence that the value conclusion is trustworthy? (Back to top)

In communicating an appraisal report, each appraiser must ensure the following:

The appraisal contained analysis of the information.

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

That appraisal services were delivered in a careful and conscientious fashion.

That a believable, substantiated appraisal report was imparted.

To become a state licensed appraiser, there are strenuous education requirements as well as experience that must be attained - all with the end goal of gaining the skills required to render unbiased value opinions. Likewise, appraisers must obey a strict industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for working up an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Back to top) Licensing and certification requires classroom study, tests and practical experience. Once an appraiser is licensed, he or she is required to engage in continuing education courses so the license remains current. To see the specific requirements for any state click here.

Who are an appraiser's customers? (Back to top)

Mortgage lenders are an appraiser's typical client, using their services to ensure a home 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 an appraiser get the data used to estimate values in Calcasieu County or other areas? (Back to top)

Gathering information is one of the primary occupations of an appraiser. Data can be described as either Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is received from a variety of places. To find out about recently sold homes to be used as "comps", an appraiser will often go to the local Multiple Listing Service. To double-check actual sales prices, we use tax records and other public documents. Appraisers routinely 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 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 should I hire a licensed appraiser? (Back to top)

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 will help you determine the most appropriate price. When buying, you can avoid overpaying by getting 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. Don't make decisions in the dark with a professional appraisal.

What exactly is PMI and how can I get rid of it? (Back to top)

PMI stands for Private Mortgage Insurance. This supplemental plan covers the lender if a borrower doesn't pay on the loan and the value of the home is lower than the balance of 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.


	Is PMI something increasing your monthly house payment?Call Josh Anderson Appraisals, INC. today at 3378536106 or send us an e-mail. A current appraisal could save you thousands.

Do you need anything from me in advance? (Back to top)

We start 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 condition 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. Indoors, make sure the appraiser can easily access items like furnaces and water heaters.

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

A plot plan or survey of the house and land (if readily available).
A list of any personal property that will be left behind and sold with the home, such as an oven, or a washer and dryer, if applicable.
Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .
A list of any major home improvements and enhancements, 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).
Most recent real estate tax bill and or legal description of the property.

How does an appraiser define "Market Value"? (Back to top)

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? (Back to top)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. 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 appraisal - it's usually included 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 hires an appraiser directly. 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 stipulated otherwise, the home owner can use the appraisal for any purpose.

Are some home improvements more worthwhile than others? (Back to top)

A home's location - what city it is in and even what part of that city - is key to this popular question. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

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, yielding 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.