Whitehead Appraisal Service has answers to "Frequently Asked Questions"


	Whitehead Appraisal Service is always ready to answer any concerns you might have about appraisals in Central Arkansas. Feel free to contact us today.

What is an appraisal?
Describe what an appraiser does
What would cause me to request services from Whitehead Appraisal Service?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
After completing the report, how can I have confidence that the value conclusion is trustworthy?
How hard is it to become certified?
Who engages the services of appraisers?
Where does an appraiser get the data used to estimate values in Pulaski 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?
How do I get ready for the appraiser?
What is "Market Value?"
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?

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

The method of performing an appraisal deals with an inspection which leads to an opinion of value. The real estate appraiser will typically use a few "approaches," typically three, to arrive at the estimation of value. One of them is the Cost Approach - which is how much it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. The Sales Comparison Approach involves searching for comparable houses in close proximity and discerning value based on making a comparison of those properties to the property in question. The Sales Comparison Approach is commonly the most accurate and clearest indicator of cost for a residence. One of the least common approaches in appraising houses is the Income Approach, which is commonly used to find the worth of a property based on what an investor would pay based on the capital 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 demonstrate their expert findings in appraisal reports.

What would cause me to request services from Whitehead Appraisal Service? (See list of FAQ's)

There are a lot of reasons to order an appraisal from Whitehead Appraisal Service with the most common reason being real estate and mortgage transactions. A few other reasons for ordering an report include:

If you are applying for a loan.
To lower your property taxes.
To show a homeowner has 30% equity and remove PMI.
To fight inflated property taxes.
To settle an estate.
To give you a leg-up when purchasing a home.
To figure out a reasonable 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 definitely help.

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

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

The appraiser is not a home inspector and he or she does not do a complete home inspection. A third-party home inspector will judge the structure of the house, from the top to the foundation. The standard home inspector's report will contain an evaluation of the condition of the home's heating systems, 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. What the CMA depends on are superficial trends. The appraisal relies on specific proven comparable sales. In addition, the appraisal looks at other factors like condition, neighborhood and replacement costs. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

Who's creating the report is frankly the most significant difference between a CMA and an appraisal. Real estate agents produce CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Further, the appraiser is an independent party, with no vested interest in the value conclusion, unlike the real estate agent, gets a commission based upon the value of the home.

What can I expect to see in my appraisal report? (See list of FAQ's)

Every report should demonstrate a credible value opinion and will clearly state the following:

Who engaged the appraiser and other intended users.
How the appraisal is supposed to be used.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraiser's opinions and conclusions.(Sometimes this is in the past or maybe the future for new construction!)
Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic attributes, 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.
All 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 used when completing the appraisal.

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

After completing the report, how can I have confidence that the value conclusion is trustworthy? (See list of FAQ's)

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

That the information analysis contained in the appraisal was suitable.

That crucial 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 easy to explain, legitimate and conclusive.

There are rigorous education and experience requirements that must be adhered to in order to achieve the designation of "licensed appraiser" in Arkansas. In addition, appraisers must stick to a stringent 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).

(See list of FAQ's)

Regulations regarding licensing and certification are different from state to state. However, licensing and certification typically translates to many hours of classroom study, tests and practical experience. Once an appraiser is licensed, he or she must then take continuing education courses so the license remains current. To see the specific requirements for any state click here.

Who engages the services of appraisers? (See list of FAQ's)

Typically, appraisers are employed by lenders to render a value opinion on property involved in a loan transaction - to make sure the property is indeed adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

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

One of the most important tasks an appraiser engages in is to assimilate data. Data can be described as either Specific or General. Specific data is taken 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 many places. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. To verify actual sales prices, we look at tax records and other public documents. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood service.

And most importantly, the appraiser assembles general data from his or her collective knowledge gained from doing assignments for other properties in the same market.

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

An appraisal is a worthwhile anytime the value of your home is pertinent to a financial decision. When selling your home, an appraisal will help you determine a price that maximizes profit and reduces time on the market. When buying, be sure you're not overpaying by getting an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A house is often the single, largest financial asset anybody owns. Knowing its true value means you can make smart financial decisions.

My mortgage statement has an item on it for PMI? Can I get rid of that? (See list of FAQ's)

PMI is short for for Private Mortgage Insurance. PMI guards the lender in case a borrower is unable to pay on the loan and the market price of the home is lower than the balance of the loan. 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 Whitehead Appraisal Service today at 5013262259 to see if you can get rid of your Private Mortgage Insurance payment.

How do I get ready for the appraiser? (See list of FAQ's)

The first step in most appraisals is the property 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. The best thing you can do to help is make sure we have easy access to the exterior of the house . Trim any bushes and relocate any items that would get in our way while we measure the structure. Indoors, make sure the appraiser can get to appliances like furnaces and water heaters.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:

Any records on the purchase of the property for the last three years.
Title policy that describes encroachments or easements.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
Find copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.
A bill for your most recent real estate taxes which should also contain a legal description of the property.

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

Market value or fair market value is the most probable price that a property should bring (will sell for) in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, 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: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised; (3) a reasonable time is allowed for exposure to the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) 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? (See list of FAQ's)

For mortgage transactions, the lender requests 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 appraisal - 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 define 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? (See list of FAQ's)

The answer to this is different depending upon the location of the home. The added value of a particular amenity truly depends on the local market. Adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

No matter where you go, however, renovating a kitchen is almost always a safe move. 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, returning 85%. Adding bedrooms and baths can also boost the value of your home (when done well) as long as your home doesn't then become overbuilt for your neighborhood in terms of size.