Titan Appraisals, LLC. has answers to "Frequently Asked Questions"


	Titan Appraisals, LLC. is more than happy to handle any questions you might have about appraisals or real estate in Mercer County. Don't hesitate to contact us today.

Describe an appraisal
Describe what an appraiser does
What would cause me to need a real estate appraisal?
What is the difference between an appraisal and a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What's in an appraisal report?
Upon completion of the report, what guarantee is there that the final number is legitimate?
What does it mean for an appraiser to be licensed?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in Mercer County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Do you need anything from the homeowner in advance?
Define "Market Value"
Once complete, who actually owns the appraisal report?
Which home renovations add the most to the price?

Describe an appraisal (Back to top)

The procedure of writing an appraisal report deals with an inspection which leads to an opinion of value. This opinion or estimate is discerned by using a formal method that typically uses three "common approaches to value". One of the methods in use is the Cost Approach, which is what it would cost to restore the improvements to the home, minus age and physical deterioration, plus the land value. The Sales Comparison Approach involves searching for comparable homes nearby and discovering the value based on comparing those houses to the property in question. Being the most popular approach, the Sales Comparison Approach is considered the most precise and best indicator of market value for a residence. The third approach is the Income Approach, which is the best method in appraising income producing properties - it involves estimating what an investor would pay based on the capital generated by the property.

Describe what an appraiser does (Back to top)

An appraiser forumlates an unbiased and well substantiated determination of market value, in the support of real property transactions. Appraisers summarize their expert analysis in appraisal reports.

What would cause me to need a real estate appraisal? (Back to top)

There are a lot of reasons to get an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for getting an appraisal report include:

If you are applying for a loan.
If you would like to reduce your property tax obligations.
To build a case for a homeowner's equity and remove insurance.
To fight improperly assessed property taxes.
To deal with an estate.
To offer you a leg-up when purchasing real estate.
To find a likely price when putting your home on the market.
To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
Because an official agency such as the IRS requires it.
If you are ever involved in a civil case.

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

What is the difference between an appraisal and a home inspection? (Back to top)

Home inspectors do not estimate an opinion of value and do not use the same forms as appraisers. An inspection is a third-party evaluation of the accessible structure and electrical and mechanical systems of a home, from the top to the bottom. The standard house 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.

What is the difference between an appraisal and a comparative market analysis (CMA)? (Back to top)

Honestly, they share nothing in common. The CMA utilizes market trends to conduct most of their business. Appraisals use similar sales which are valid resources. Location and architectural prices are also important in an appraisal. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the largest differentiator is who's behind the report. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, state licensed professional who bases their livelihood on valuing properties in and around Mercer County is behind the appraisal. Moreover, the appraiser is an unbiased party, with no conditional interest in the value conclusion, unlike the real estate agent, who gets a commission based upon the value of the home.

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

The main objective of an appraisal report is to give a value opinion, and depending on the scope of the report, you'll usually see the following:

Who engaged the appraiser and other intended users.
The intended use of the appraisal.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraisal.
Relevant property attributes, including: location, physical characteristics, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible items.
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.
What was included in the activity of completing the job.

For a more comprehensive view of what goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the report, what guarantee is there that the final number is legitimate? (Back to top)

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

The appraisal used an appropriate analysis of the data.

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

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

The final appraisal report was easy to explain, legitimate and not easily discredited.

To become a state licensed appraiser, there are extensive education requirements as well as on the jobexperience that must be attained. Plus, appraisers must abide by a strict industry code of ethics and observe national standards of practice for real estate appraisal. The rules for carrying out an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Back to top) Regulations regarding licensing and certification vary from state to state. However, licensing and certification is commonly associated with many hours of coursework, tests and real world experience. Once licensed, he/she is required to take continuing education courses in order to keep the license 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 most likely client, needing their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does an appraiser get the information used to estimate values in Mercer County or other areas? (Back to top)

Collecting data is one of the primary activities of an appraiser. Data can be categorized as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is collected from a number of places. Local Multiple Listing Services (MLS) have information on recently sold homes that could be used as comparables. Tax records and other courthouse documents reveal actual sales prices in a market. Appraisers often need 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 service.

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

Why do I need a professional appraisal? (Back to top)

An appraisal is a valuable tool whenever your home's value is pertinent to a financial decision. When selling your house, an appraisal assists you in setting the most appropriate price. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Titan Appraisals, LLC. is the best way to ensure assets are split up properly. Simply put, a house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.

My mortgage statement has an item on it for PMI? Can I get rid of that? (Back to top)

PMI is an acronym for Private Mortgage Insurance. This supplemental policy guards the lender in case a borrower is unable to pay on the loan and the market price of the property is lower than what the borrower still owes on the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.


	The savings from cancelling your PMI pays for the appraisal in no time. Titan Appraisals, LLC. is in the business of tracking value trends in Bluefield and Mercer County. Contact us today.

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

We start with an inspection of the home. 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. Inside, make sure it is clutter free and that we can find our way to things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of exterior walls.

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

Information on any written private agreements, such as a shared driveway with a neighbor.
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.
Brag sheet that lists major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
A list of "suggested" improvements if the property is to be appraised "as complete".

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."

Once complete, who actually owns the appraisal report? (Back to top)

In most real estate transactions, the appraisal is ordered by the lender. 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.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these situations, 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 do whatever they want with the appraisal.

Which home renovations add the most to the price? (Back to top)

It really depends on the market. 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 most value returned from renovating a home comes in the kitchen. 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%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.