Gilpatrick Appraisal has answers to "Frequently Asked Questions"

Gilpatrick Appraisal is always prepared to answer any inquiries you might have about appraisals or real estate in Mecklenburg County. Feel free to contact us today.

Define the term "Appraisal"
What does an appraiser do?
Why would I require services from Gilpatrick Appraisal ?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
Upon completion of the report, what assurance is there that the value indicated is legitimate?
What goes into an appraiser's certification?
Who employs appraisers?
Where does an appraiser get the data used to estimate values in Mecklenburg County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
What is "Market Value?"
Who has rights to the appraisal report?
Which home renovations add the most to the price?



Define the term "Appraisal"   (Go to list of  questions)

An appraisal report is a thought process that concludes with an opinion of value. There are three "common approaches to value" which assists the real estate appraiser come to this opinion or estimate. One of them is the Cost Approach - which is how much capital would be required to replace the improvements, minus physical deterioration and other factors, plus the land value. The most common approach in finding the value of a house is the Sales Comparison Approach which involves making a comparison to similar properties close by. Being the most commonly used approach, the Sales Comparison Approach tends to be the most precise and best indicator of market value for a residence. One of the least common approaches in appraising homes is the Income Approach, which is mainly used to find the value of a property based on what an investor would pay based on the income produced by the property.

What does an appraiser do?   (Go to list of  questions)

An appraiser forumlates a fair and credible determination of market value, often in the context of a real estate exchange. Appraisers present their professional conclusions in appraisal reports.


Why would I require services from Gilpatrick Appraisal ?   (Go to list of  questions)

There are many reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for ordering an report include:
  • If you are applying for a loan.
  • To lower your property taxes.
  • To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
  • To challenge high property taxes.
  • If you need to settle an estate.
  • To offer you a leg-up when purchasing a home.
  • To determine a reasonable property value when putting your home on the market.
  • 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 be involved in a lawsuit - an appraisal will help.
For a more extensive description of the appraisal process click here.


What is the difference between an appraisal and a home inspection?   (Go to list of  questions)

Appraisers do not do complete residential property inspections and are not home inspectors. The point of a home inspection is to evaluate the structure of the property from bottom to top. The usual house inspector's report will contain an evaluation of the condition of the home'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.

Is an appraisal the same as a comparative market analysis(CMA)?   (Go to list of  questions)

To be honest, they share nothing in common. What the CMA depends on are vague trends. The appraisal relies on specific definite comparable sales. Location and construction prices are also a priority in an appraisal. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

But the most significant factor is the person creating the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. 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 previously agreed upon sum for assignments, regardless of their value conclusion.

What can I expect to see in my appraisal report?   (Go to list of  questions)

The main purpose of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The appraisal's purpose.
  • The type of value reported and a definition of that value.
  • The effective date of the appraisal.(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 characteristics, legal attributes, economic factors, the property rights valued, and non-real estate items included in the valuation, 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 the like.
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • The scope of work used to complete the assignment.
For a more detailed look at what goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the report, what assurance is there that the value indicated is legitimate?   (Go to list of  questions)

In communicating an appraisal report, each appraiser must make sure of the following:
  • The appraisal contained an appropriate analysis of the data.

  • That major 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 understandable, sound and defensible.
To become a state licensed appraiser, we must meet considerable education and experience requirements that give us the background to formulate an unbiased opinion. 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 developing an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Go to list of  questions) Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. In general, licensing and certification is commonly associated with many hours of coursework, tests and practical experience. Once licensed, he/she is required to take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers?   (Go to list of  questions)

Mortgage lenders are an appraiser's typical client, requiring their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does an appraiser get the data used to estimate values in Mecklenburg County or other areas?   (Go to list of  questions)

One of the primary activities of an appraiser is to collect data. Data can be divided into Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is gathered from a many sources. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. To double-check actual sales prices, we look at items in the assessor's office and other public documents. Appraisers routinely have to report when a property is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And last but not least, the appraiser assimilates general data from his or her collective knowledge gained from doing assignments for other houses in the same market.

What can a full appraisal do for me?   (Go to list of  questions)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. For those selling a home, you'll want to determine the price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. 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. Don't make decisions in the dark with a professional appraisal.

What exactly is PMI and how can I get rid of it?   (Go to list of  questions)

PMI is an acronym for Private Mortgage Insurance. It covers the lender in case a borrower doesn't pay on the loan and the market price of the property is lower than the loan balance. 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.

Has your real estate appreciated since you first purchased? Contact Gilpatrick Appraisal today at 7044916196 to see if you can cancel your Private Mortgage Insurance premium.

Should I do anything in advance of the appraisal inspection   (Go to list of  questions)

We begin 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. On the home's interior, 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 outside walls.

You can make our visit go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • Records on the latest purchase of the property in the last three years.
  • A list of any personal property that will be left behind and sold with the home, such as an oven, or a washer and dryer, if applicable.
  • Information on "Homeowners Associations" or condominium covenants and fees.
  • Brag sheet that lists major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
  • Most recent real estate tax bill and or legal description of the property.

What is "Market Value?"   (Go to list of  questions)

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 has rights to the appraisal report?   (Go to list of  questions)

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 engages an appraiser directly. In these situations, 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.

Which home renovations add the most to the price?   (Go to list of  questions)

Like all things real estate, this is dependent on a home's location. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

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 were second, yielding 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 atypical for your neighborhood in terms of size.