M & E Appraisals, Inc has answers to "Frequently Asked Questions"


	M & E Appraisals, Inc is prepared to answer any questions you might have about appraisals or real estate in Brevard County. Contact M & E Appraisals, Inc today to see how we can help you with your specific valuation problems.

What is an appraisal?
What does an appraiser do?
Why would a person require your services?
How is an appraiser different than a home inspector?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What's in an appraisal report?
Once the report is done, how can I have assurance that the value conclusion is legitimate?
How are appraisers certified?
Who engages the services of appraisers?
Where does M & E Appraisals, Inc get the information used to estimate values in Brevard County or other areas?
Why should I hire a licensed appraiser?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Does the appraiser need anything from me in advance?
Define "Market Value"
Who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?

What is an appraisal? (Return to top)

The appraisal process is an evaluation that leads to an opinion of value. The real estate appraiser must use a several "approaches," typically three, to come to the estimation of market 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 depreciation and physical deterioration, plus the land value. The most common approach in finding the value of a home is the Sales Comparison Approach which deals with figuring a comparison to comparable homes close by. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a residential property. The Income Approach is primarily 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.

What does an appraiser do? (Return to top)

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

Why would a person require your services? (Return to top)

There are a lot of reasons to get an appraisal from M & E Appraisals, Inc with the usual reason being real estate and mortgage transactions. Some other reasons for purchasing an appraisal include:

If you are applying for a loan.
If you would like to reduce your property tax obligations.
To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
To contest high property taxes.
If you need to settle an estate.
To give you an edge when purchasing real estate.
To determine a likely price when selling real estate.
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 need an appraisal on every property.
If you are ever involved in a lawsuit.

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

How is an appraiser different than a home inspector? (Return to top)

Home inspectors do not estimate an opinion of value and are not appraisers. A third-party home inspector will judge the structure of the property, from the top to the bottom. For the most part, a home inspection report will explain the amenities and the requirements of the home: air conditioning (weather permitting), electrical systems, 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 other visible structures.

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

Simply, they share nothing in common. The CMA depends on vague trends in the market. The appraisal is based on specific proven comparable sales. Also, the appraisal verifies other factors like condition, location and building prices. 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 who's creating the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA's. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Moreover, the appraiser is an independent party, with no vested interest in the value conclusion, unlike the real estate agent, whose income is tied to the price of the home.

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

Each appraisal should demonstrate a supported value opinion and should clearly state the following:

Who engaged the appraiser and whose purposes the appraisal is to serve.
The intended use of the appraisal.
The appraisal's purpose.
The type of value reported and a definition of the value reported.
The effective date of the value opinion.
Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible factors.
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 used to complete the appraisal.

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

Once the report is done, how can I have assurance that the value conclusion is legitimate? (Return to top)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:

The appraisal contained an appropriate analysis of the information.

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

That appraisal services were not carried out in a careless or negligent manner.

The final appraisal report was understandable, legitimate and conclusive.

To become a state licensed appraiser, there are extensive education requirements as well as experience that must be logged. Plus, appraisers must abide by a strict industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for carrying out an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Return to top) Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. However, licensing and certification is most often associated with many hours of classroom study, tests and real world experience. Once licensed, he or she must then engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who engages the services of appraisers? (Return to top)

Mortgage lenders are an appraiser's most likely client, needing their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does M & E Appraisals, Inc get the information used to estimate values in Brevard County or other areas? (Return to top)

Compiling data is one of the primary tasks an appraiser performs. Data can be categorized as either Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.

General data is received from a number of places. To find out about recent sales to be used as "comps", we often use the local Multiple Listing Service. Tax records and other public documents reveal actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood system.

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? (Return to top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. When selling your home, an appraisal will help you determine a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. 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. Knowing its true value is essential to making informed financial decisions.

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

PMI is the common abbreviation for for Private Mortgage Insurance. This supplemental policy guards the lender if a borrower doesn't pay on the loan and the market price of the house 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.


	Is PMI something increasing your monthly house payment?Call M & E Appraisals, Inc today at 772-664-8707 or send us an e-mail. Documentation of your home's current value could save you thousands.

Does the appraiser need anything from me in advance? (Return to top)

We start with an inspection of the home. 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. Inside, pick up any clutter and make sure we can get to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of outside walls.

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.
A list of any personal property that will be left behind and sold with the home, such as a oven, or a washer and dryer, if applicable.
Most recent real estate tax bill from Brevard and or legal description of the property.
Brag sheet that lists major home improvements and enhancements, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .

Define "Market Value" (Return 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."

Who actually owns the appraisal report? (Return to top)

In most real estate transactions, the appraisal is ordered by the lender. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. 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.

The exception to this rule is when a home owner hires an appraiser directly. 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 do whatever they want with the appraisal.

I want to get more for my house. Where should I spend money renovating? (Return to top)

The answer to this is different depending upon the location of the home. 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 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%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.