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Hatcher Appraisal Services has answers to "Frequently Asked Questions"

Hatcher Appraisal Services is always prepared to elaborate on any questions you might have about appraisals in Columbus and Franklin County. Don't hesitate to contact us today.

Describe an appraisal
Describe what an appraiser does
What are the reasons a person would require a real estate appraisal?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Once the appraisal is done, how can I have assurance that the final number is accurate?
How hard is it to become certified?
Who hires an appraiser?
Where does Hatcher Appraisal Services get the data used to estimate values in Franklin County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
Which home renovations add the most to the price?



Describe an appraisal   (Return to top)

An appraiser performs an evaluation that leads to an opinion of value. This opinion or estimate is concluded using a formal process that commonly uses 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, less physical deterioration and other factors, plus the land value. The most common approach in finding the likely sales price of a home is the Sales Comparison Approach which concerns concluding a comparison to comparable properties nearby. The Sales Comparison Approach is normally the most definitive and best indicator of a liklely sales price for a residential property. The third approach is the Income Approach, which is the best method in appraising income producing properties - it deals with estimating what an investor would pay based on the capital produced by the property.

Describe what an appraiser does   (Return to top)

An appraiser offers an objective and well substantiated determination of market value, often in the context of a real estate sale. Appraisers reveal the details of their professional investigation in appraisal reports.


What are the reasons a person would require a real estate appraisal?   (Return to top)

There are many reasons to get an appraisal from Hatcher Appraisal Services with the most common reason being real estate and mortgage transactions. Other reasons for purchasing an appraisal 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 insurance.
  • To challenge improperly assessed property taxes.
  • To handle an estate.
  • To offer you a leg-up when purchasing real estate.
  • To figure out the most probable property value when selling your home.
  • To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Because a government agency such as the IRS requires it.
  • It's possible you could be involved in a lawsuit - an appraisal will definitely help.
For a more extensive description of the appraisal process click here.


Is an appraisal the same as a home inspection?   (Return to top)

Appraisers do not do complete house inspections and are not home inspectors. An inspection is a third-party evaluation of the accessible structure and mechanical systems of a home, from the top to the bottom. Usually, a home inspection report will discuss the amenities and the requirements of the home: air conditioning (weather permitting), electrical functions, 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.

Is an appraisal the same as a comparative market analysis(CMA)?   (Return to top)

Simply put, it's night and day. The CMA relies on indefinite market trends. An appraisal relies on comparable sales that can be proven by public record. Also, the appraisal looks at other factors like condition, area and replacement prices. All a CMA does is generate a "ball park 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 frankly the biggest 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. The appraisal is produce 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 collect only a previously agreed upon fee for work they perform, regardless of their outcome.

What are the contents of an appraisal report?   (Return to top)

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:
  • The client and whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The appraisal's purpose.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the value opinion.
  • Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the appraisal, such as personal property, trade fixtures 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.
  • What was entailed in the activity of completing the job.
For a more in depth view of all that goes into an appraisal report click here: Sample Appraisal Report


Once the appraisal is done, how can I have assurance that the final number is accurate?   (Return to top)

In communicating an appraisal report, each appraiser must make sure of the following:
  • That the information analysis utilized in the appraisal was suitable.

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

  • That appraisal services were done in a careful and cognizant manner.

  • That a trustworthy, substantiated appraisal report was conferred.
To become a state licensed appraiser, there are strenuous education requirements as well as experience that must be attained. In addition, appraisers must follow a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The rules for developing an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Return to top) Licensing and certification requires coursework, tests and experience working under a supervisor. Once licensed, he or she must then complete continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who hires an appraiser?   (Return to top)

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

Where does Hatcher Appraisal Services get the data used to estimate values in Franklin County or other areas?   (Return to top)

One of the primary activities of an appraiser is to collect property data. Data can be described as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.

General data is collected from a number of sources. To find out about recently sold homes to be used as "comps", an appraiser will often use the local Multiple Listing Service. Tax records and other public documents verify actual sales prices in a market. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood servers.

And most importantly, the appraiser gathers 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?   (Return to top)

If you're involved in some sort of financial decision and the value of your home matters, you'll want an appraisal. For those selling a home, you'll want to figure out a price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. When buying, be sure you're not overpaying by getting an independent appraisal. For people settling an estate or divorce, an appraisal from Hatcher Appraisal Services is the best documentation to ensure assets are divided evenly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making informed financial decisions.


What exactly is PMI and how can I get rid of it?   (Return to top)

PMI is an acronym for Private Mortgage Insurance. PMI protects the lender if a borrower is unable to pay on the loan and the market price of the home is less 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 money you keep from getting rid of your PMI will make up for the price of the appraisal in no time. Hatcher Appraisal Services stays current with real estate value trends in Columbus and Franklin County. Contact us today.

Should I do anything in advance of the appraisal inspection   (Return to top)

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 condition of its features. Inside, make sure it is clutter free and that we can access 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.

To help speed things along as well as ensure a more accurate report, attempt if possible to have the following items:
  • Any records on the purchase of the property for the last three years.
  • Information on any written private agreements, such as a shared driveway with a neighbor.
  • Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
  • Information on "Homeowners Associations" or condominium covenants and fees.

What does "Market Value" mean?   (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."



Does the appraisal belong to the bank or the consumer?   (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 entitled to a copy of the report - it's usually bundled 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 scenarios, the appraiser may stipulate 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?   (Return to top)

The answer to this is different depending upon the location of the home. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.

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 weren't far behind, yielding 85%. Adding bedrooms and baths can also help the value of your home (when done well) as long as your home doesn't then become overbuilt for your neighborhood in terms of size.