Filson's Real Estate Appraisal Services, Inc. has answers to "Frequently Asked Questions"


	Filson's Real Estate Appraisal Services, Inc. is always ready to reply to any concerns you might have about appraisals in Atlanta and Fulton County. Don't hesitate to contact us today.

What is an appraisal?
Describe what an appraiser does
What are the reasons a person would need a real estate appraisal?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
Upon completion of the report, what guarantee is there that the value conclusion is veritable?
What goes into an appraiser's certification?
Who are an appraiser's customers?
Where does an appraiser get the data used to estimate values in Fulton County or other areas?
What can a full appraisal do for me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Do you need anything from me in advance?
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
I want to get more for my house. Where should I spend money renovating?

What is an appraisal? (See list of FAQ's)

The procedure of performing an appraisal report deals with an evaluation which forms an opinion of value. This opinion or estimate is discerned by using a formal method that typically utilizes three "common approaches to value". One of the processes in use is the Cost Approach, which is what it would cost to restore the improvements to the house, less the depreciation and physical dilapidation, plus the land value. Easily the most common approach in figuring the value of a home is the Sales Comparison Approach which concerns making a comparison to comparable houses close by. Generally speaking, the Sales Comparison Approach is the most accurate indicator of market value of a residential property. One of the least common approaches in appraising homes is the Income Approach, which is generally used to figure the market value of a property based on what an investor would pay based on the income produced by the building.

Describe what an appraiser does (See list of FAQ's)

An appraiser forumlates a professional, unbiased determination of market value, to be used in making real estate transactions. Appraisers reveal the details of their expert investigation in appraisal reports.

What are the reasons a person would need a real estate appraisal? (See list of FAQ's)

There are many reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal report include:

If you are applying for a loan.
To reduce your tax burden.
To show a homeowner has 30% equity and remove PMI.
To fight high property taxes.
To handle an estate.
To provide you an edge when purchasing a home.
To figure out an honest price when selling your home.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Government agencies such as the IRS require an appraisal on every home.
If you are ever involved in a civil case.

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

How is an appraisal different than a home inspection? (See list of FAQ's)

Home inspectors do not provide an opinion of value and do not do appraisal reports. A third-party home inspector will inspect the structure of the home, from the top to the bottom. The standard property inspector's report will include an evaluation of the condition of the house'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)? (See list of FAQ's)

Honestly, they have nothing in common. The CMA depends on indistinct trends in the market. The appraisal is based on specific definite comparable sales. In addition, the appraisal verifies other factors like condition, location and construction costs. A CMA delivers 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 the person behind the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. A certified, Georgia licensed professional who bases a career on valuing real estate in and around Fulton County creates 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 previously agreed upon sum for work they perform, regardless of their outcome.

What are the contents of an appraisal report? (See list of FAQ's)

Each appraisal should indicate a believable estimate of value and must clearly state the following:

Who engaged the appraiser and other intended users.
The intended use of the appraisal.
The purpose of the assignment.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the value opinion.
Pertinent property attributes, including: location, physical description, legal attributes, economic factors, the property rights 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 other items of a similar nature.
Division of interest, such as fractional interest, physical segment and partial holding.
The scope of work considered to complete the job.

For a more detailed view of the work that goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the report, what guarantee is there that the value conclusion is veritable? (See list of FAQ's)

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 information.

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

That appraisal services were done in a careful and judicious manner.

That a credible, substantiated appraisal report was conferred.

To become a state licensed appraiser, there are extensive education requirements as well as experience that must be logged - all with the end goal of gaining the skills required to provide unbiased value opinions. In addition, appraisers must abide by a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's) Licensing and certification takes coursework, tests and experience working under a supervisor. Once an appraiser is licensed, he/she is required to engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who are an appraiser's customers? (See list of FAQ's)

Most of the time, appraisers are called upon by mortgage lenders to estimate the value of a house involved in a loan transaction. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does an appraiser get the data used to estimate values in Fulton County or other areas? (See list of FAQ's)

Compiling information is one of the primary activities of an appraiser. Data can be split into Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is gathered from a number of places. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. To double-check actual sales prices, we research items in the assessor's office and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood product.

And most importantly, the appraiser assembles general data from his or her past experience in doing assignments for other houses in the same market.

What can a full appraisal do for me? (See list of FAQ's)

An appraisal is a worthwhile whenever your home's value is relevant to a financial decision. For those selling a home, you'll want to figure out 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. When buying, be sure you're not overpaying by commissioning an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. Simply put, a home 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? (See list of FAQ's)

PMI is an acronym for Private Mortgage Insurance. It guards the lender in the event a borrower is unable to pay on the loan and the market price of the house is lower than what is owed 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.


	The savings from cancelling the PMI required when you got your mortgage will make up for the cost of the appraisal in a matter of months. Filson's Real Estate Appraisal Services, Inc. has years of experience with real estate value trends in Atlanta and Fulton County. Contact us today.

Do you need anything from me in advance? (See list of FAQ's)

The first step in most appraisals is the home inspection. During this process, we 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. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any shrubs and move any items that would make it difficult to measure the structure. Indoors, make sure the appraiser can easily access items like furnaces and water heaters.

You can make our visit go faster and improve the quality of the appraisal report by having the following things on hand:

Information on the latest purchase of the property in the last three years.
A list of any personal property that is part of the home and you intend to be sold with the home, such as an oven, or a washer and dryer, if applicable.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
A list of "suggested" improvements if the property is to be appraised "as complete".

What does "Market Value" mean? (See list of FAQ's)

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? (See list of FAQ's)

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 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.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these scenarios, the appraiser may define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can use the appraisal for any purpose.

I want to get more for my house. Where should I spend money renovating? (See list of FAQ's)

Like all things real estate, this is dependent on a home's location. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 weren't far behind, yielding 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.

Certified General Real Estate Appraisers on Staff. (COMMERCIAL APPRAISALS) Covering the entire state of GEORGIA