Alliance Appraisal Associates of Florida, Inc. has answers to "Frequently Asked Questions"

Alliance Appraisal Associates of Florida, Inc. is more than happy to answer any concerns you might have about appraisals in Manatee County. Feel free to contact us today.

Define the term "Appraisal"
What does an appraiser do?
Why would a person require your services?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
Upon completion of the appraisal, how can I have assurance that the value conclusion is veritable?
What does it mean for an appraiser to be licensed?
Who engages the services of appraisers?
Where does Alliance Appraisal Associates of Florida, Inc. get the information used to estimate values in Manatee 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?
Do you need anything from the homeowner in advance?
What does "Market Value" mean?
Who actually owns the appraisal report?
Which home renovations add the most to the price?



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

The method of producing an appraisal report consists of an investigation which forms an opinion of value. The appraiser will use a several "approaches," typically three, to draw up the estimation of market value. The Cost Approach is one of the methods that real estate appraisers use to find value; it involves figuring what the improvements would cost less physical deterioration, plus the land value. The Sales Comparison Approach deals with finding comparable houses nearby and figuring out the value based on comparing those prior sales to the house being investigated. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a residential property. One of the least common approaches in appraising homes is the Income Approach, which is generally used to determine the market 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 assessment of market value, in the support of real estate exchanges. Appraisers illustate their expert investigation in appraisal reports.


Why would a person require your services?   (Go to list of  questions)

There are a lot of reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for ordering an appraisal include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax burden.
  • To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
  • To fight improperly assessed property taxes.
  • To settle an estate.
  • To provide you an edge when purchasing a home.
  • To find a reasonable price when selling your home.
  • 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.
Click here for a more extensive explanation of the process involved in getting an appraisal.


Is an appraisal the same as a home inspection?   (Go to list of  questions)

Home inspectors do not generate an opinion of value and do not use the same forms as appraisers. A third-party home inspector will judge the structure of the home, from the top to the bottom. The general property inspector's report will contain an evaluation of the integrity of the house's heating system, 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.

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

Simply put, it's night and day. The CMA depends on indefinite local market trends. Appraisals use comparable sales which are valid resources. Also, the appraisal checks other factors like condition, neighborhood and replacement 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 most significant factor is the person doing the report. A CMA is written by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. The appraisal is created by a licensed, certified professional who makes a living 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 flat sum for work they perform, regardless of their value conclusion.

What does the appraisal report contain?   (Go to list of  questions)

Each report must indicate a supported value opinion and should clearly state the following:
  • Who engaged the appraiser and other intended users.
  • The intended use of the appraisal.
  • The purpose of the assignment.
  • Precisely what "value" attribute is being reported and what that value means.
  • 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 description, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible considerations.
  • 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.
  • What was included in the activity of completing the assignment.
For a more in depth view of the work that goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, how can I have assurance that the value conclusion is veritable?   (Go to list of  questions)

In communicating an appraisal report, each appraiser must ensure the following:
  • The appraisal used a suitable analysis of the information.

  • Whether individually or collectively, there were no crucial errors contained in the report, nor any relevant details left out.

  • That appraisal services were provided in a careful and conscientious fashion.

  • The final appraisal report was understandable, credible and defensible.
To become a state licensed appraiser, there are intense education requirements as well as practical experience that must be logged - all with the end goal of gaining the skills required to render unbiased value opinions. Plus, appraisers must abide by a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for carrying out an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Go to list of  questions) Regulations regarding licensing and certification vary from state to state. However, licensing and certification is commonly associated with many hours of classroom study, tests and experience working under a supervisor. Once licensed, he/she must then take 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?   (Go to list of  questions)

Mortgage lenders are an appraiser's most likely client, requiring their services to ensure property involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Alliance Appraisal Associates of Florida, Inc. get the information used to estimate values in Manatee County or other areas?   (Go to list of  questions)

One of the most important activities of an appraiser is to gather data. Data can be categorized as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.

General data is gathered from a variety of places. To research recently sold homes to be used as "comps", we typically go to the local Multiple Listing Service. To double-check actual sales prices, we research tax records and other public documents. Flood zone data is retrieved from FEMA data outlets, 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 doing assignments for other properties 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. When selling your home, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. When buying, be sure you're not overpaying by commissioning an independent appraisal. For those settling an estate or divorce, an appraisal from Alliance Appraisal Associates of Florida, Inc. is the best documentation 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?   (Go to list of  questions)

PMI is short for for Private Mortgage Insurance. PMI covers the lender in case a borrower is unable to pay on the loan and the value of the home is less 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.

The money you keep from dropping the PMI required when you got your mortgage will make up for the price of the appraisal in no time. Nobody is more qualified than Alliance Appraisal Associates of Florida, Inc. when it comes to analyzing real estate appreciation in Sarasota and Manatee County. Contact us today.

Do you need anything from the homeowner in advance?   (Go to list of  questions)

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 amenities. 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 landscaping 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:
  • Any information 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, your septic system and your well.
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
  • A list of "suggested" improvements if the property is to be appraised "as complete".

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

In real estate appraising, Market Value (as opposed to Fair 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?   (Go to list of  questions)

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 certainly entitled to a copy of the report - it's usually included with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these situations, the appraiser may state how the appraisal can be used; 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?   (Go to list of  questions)

This really depends on where the home is. 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 investment. 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 are right up there with kitchens, yielding 85%. Adding bedrooms and baths can also increase 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.