The method of producing an appraisal report consists of an estimation which leads to an opinion of value. This opinion or estimate is arrived at by using a formal process that generally utilizes the three main "common approaches to value". One of them is the Cost Approach - which is how much it would cost to replace the improvements, minus physical deterioration and other factors, then adding the land value. Another of the processes is the Sales Comparison Approach - which deals with discovering a comparable analysis to other similar properties within a close proximity which have recently sold. Being the most commonly used approach, the Sales Comparison Approach tends to be the most accurate and best indicator of market value for a house. The Income Approach is mainly used for finding the market value of income-producing properties based on what an investor would pay based on the amount of income a property would bring in.

An appraiser generates an objective and well substantiated assessment of market value, to be used in making real estate transactions. Appraisers summarize their expert findings in appraisal reports.

There are a lot of reasons to purchase an appraisal from Appraisals By Michael with the usual reason being real estate and mortgage transactions. Other reasons for getting an appraisal report include:

• -If you are applying for a loan.
• -If you would like to lower your property tax obligations.
• -To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
• -To fight inflated property taxes.
• -If you need to take care of an estate.
• -To give you a leg-up when purchasing real estate.
• -To determine a reasonable price when listing your home.
• -To defend 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.
• -It's possible you could be involved in a lawsuit - an appraisal will definitely help.

If you need more information regarding the appraisal process, please click here.

Home inspectors do not generate an opinion of value and do not use the same forms as appraisers. A third-party home inspector will evaluate the structure of the home, from the roof to the bottom. The archetypal home 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 accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

To be blunt, it's like comparing sugar and saccharin. The CMA utilizes market trends to conduct most of their business. An appraisal is based on comparable sales that can be proven by public record. The appraisal report will also contain area and building values. 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 behind the report is actually the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA's. A certified, Georgia licensed professional who made their livelihood on valuing real estate in and around Fulton County is behind 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 accept a flat sum for assignments, regardless of their value conclusion.

Each report must indicate a supported estimate of value and should clearly state the following:

• -The client and other intended users.
• -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 value opinion.(Sometimes this is in the past or maybe the future for new construction!)
• -Relevant property characteristics, including: location, physical characteristics, legal attributes, economic factors, the real property interest in question, 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 considered when completing the appraisal.

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

In the documentation of an appraisal, each appraiser must make sure of the following:

• -That the information analysis utilized in the appraisal was proper.
• -Whether individually or collectively, there were no substantial errors contained in the report, nor any relevant details left out.
• -That appraisal services were provided in a careful and judicious fashion.
• That a trustworthy, supportable appraisal report was communicated.

To become a state licensed appraiser, there are intense education requirements as well as experience that must be attained. Plus, appraisers must follow a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

Regulations regarding licensing and certification are different from state to state. However, licensing and certification typically translates to many hours of coursework, tests and real world experience. Once licensed, he/she is required to complete continuing education courses so the license stays current. To see the specific requirements for any state click here.

Typically, appraisers are called upon by lenders to estimate the value of a home involved in a loan transaction - to make sure the property is indeed adequate collateral for the loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Gathering data is one of the main things an appraiser performs. Data can be classified as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.

General data is received from a variety of sources. Local Multiple Listing Services (MLS) have information on recently sold homes that could be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers routinely have to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

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

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. If you're selling your home, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. When buying, you can avoid overpaying by getting an independent appraisal. For parties settling an estate or divorce, an appraisal from Appraisals By Michael is the best documentation to ensure assets are divided evenly. A home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

PMI is short for for Private Mortgage Insurance. This supplemental policy protects the lender if a borrower doesn't pay on the loan and the value of the property is less than the loan balance. 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 dropping your PMI will make up for the price of the appraisal in no time. Nobody is more qualified than Appraisals By Michael when it comes to analyzing real estate appreciation in Atlanta and Fulton County. Contact us today.

The first step in most appraisals is the home inspection. 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 status of its features. The best thing you can do to help is make sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and move any items that would make it difficult to measure the structure. On the inside, make sure we can get to appliances 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 survey or plot map of the property and building (if available).
-A list of any personal property that is part of the home and you intend to be sold with the home, such as a oven, or a washer and dryer, if applicable.
-A bill for your most recent real estate taxes which should also contain a legal description of the property.
-A list of any major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
-A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

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."

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 entitled to use the report for any other purpose without permission from the lender.

The exception to this rule is 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.

The added value of a particular amenity truly depends on the local market. For example, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!

No matter where you go, however, renovating a kitchen is almost always a safe move. 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 are right up there with kitchens, returning 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size.