Dalton Appraisals has answers to "Frequently Asked Questions"

Dalton Appraisals is more than happy to talk to you about any inquiries you might have about appraisals or real estate in Grainger County. Don't hesitate to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
What are the reasons someone would require services from Dalton Appraisals?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Upon completion of the appraisal, what assurance is there that the value conclusion is trustworthy?
What does it mean for an appraiser to be licensed?
Who hires Dalton Appraisals
Where does Dalton Appraisals get the information used to estimate values in Grainger County or other areas?
How can a licensed appraiser help me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal inspection
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
Which home renovations add the most to the price?



Define the term "Appraisal"   (Top)

The procedure of creating an appraisal report deals with an estimation which leads to an opinion of value. The real estate appraiser will use a several "approaches," typically three, to come to the estimation of market value. One of the processes in use is the Cost Approach, which is what it would cost to restore the improvements to the house, less the depreciation and physical deterioration, adding the land value. Easily the most common approach in finding the value of a home is the Sales Comparison Approach which involves figuring a comparison to similar houses nearby. Being the most common approach, the Sales Comparison Approach is generally the most accurate and best indicator of market value for a house. The Income Approach is mainly used for determining 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.

Describe what an appraiser does   (Top)

An appraiser forumlates a professional, unbiased assessment of market value, in the support of real property exchanges. Appraisers document their professional investigation in appraisal reports.


What are the reasons someone would require services from Dalton Appraisals?   (Top)

There are many reasons to obtain an appraisal from Dalton Appraisals with the usual reason being real estate and mortgage transactions. A few other reasons for purchasing an appraisal include:
  • To receive a loan.
  • To lower your property taxes.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove Primary Mortgage Insurance.
  • To challenge inflated property taxes.
  • If you need to settle an estate.
  • To provide you a negotiating tool when purchasing a home.
  • To figure out a likely price when listing 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 detailed explanation of the process dealing with getting an appraisal.


What is the difference between an appraisal and a home inspection?   (Top)

Home inspectors do not produce 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 house, from the top to the foundation. Commonly, a home inspection report will discuss the amenities and the necessities of the house: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

Is an appraisal the same as a comparative market analysis(CMA)?   (Top)

Simply put, it's like comparing sugar and saccharin. The CMA relies on indefinite market trends. The appraisal depends on specific verifiable comparable sales. Location and construction values are also precedent in an appraisal. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the biggest difference is who's behind the report. A CMA is created by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. A certified, state licensed professional who made a career on valuing real estate in and around Grainger County creates the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat fee for work they perform, regardless of their outcome.

What are the contents of an appraisal report?   (Top)

Each report should demonstrate a believable value opinion and must identify the following:
  • The client and other intended users.
  • The intended use of the report.
  • The appraisal's purpose.
  • The type of value reported and a definition of that value.
  • 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 factors, the property rights in question, and non-real estate items included in the valuation, 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 entailed in the activity of completing the job.
For a more detailed view of all that goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, what assurance is there that the value conclusion is trustworthy?   (Top)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • That the information analysis implemented in the appraisal was appropriate.

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

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

  • The final appraisal report was understandable, legitimate and not easily discredited.
To become a state licensed appraiser, there are strenuous education requirements as well as on the jobexperience that must be attained. Likewise, appraisers must obey a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for working up an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Top) Licensing and certification takes coursework, tests and practical 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 hires Dalton Appraisals   (Top)

Typically, appraisers are hired by mortgage lenders to render a value opinion on a home involved in a loan transaction - to make sure the property is truly adequate collateral for the loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Dalton Appraisals get the information used to estimate values in Grainger County or other areas?   (Top)

One of the main tasks an appraiser must accomplish is to assimilate data. Data can be split into Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is collected from a numerous places. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. Tax records and other courthouse 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 last but not least, the appraiser assembles general data from his or her past experience in doing assignments for other houses in the same market.

How can a licensed appraiser help me?   (Top)

If you're making some sort of financial decision and the value of your home is relevant, you'll want an appraisal. For those selling a home, you'll want to figure out 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. When buying, be sure you're not overpaying by getting an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A home 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?   (Top)

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 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.

The savings from cancelling the PMI required when you got your mortgage pays for the appraisal in a matter of months. Nobody is more qualified than Dalton Appraisals when it comes to analyzing real estate appreciation in Thorn Hill and Grainger County. Contact us today.

Should I do anything in advance of the appraisal inspection   (Top)

We start with an inspection of the property. 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. On the home's interior, make sure it is clutter free and that we can access things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of outside walls.

To help expedite our work as well as ensure a more accurate report, try if possible to have the following items:
  • A plot plan or survey of the house and land (if readily available).
  • List of personal property to be sold with the building.
  • Information on "Homeowners Associations" or condominium covenants and fees.
  • A list of any major home improvements and enhancements, the date of their installation and their cost (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.

What is "Market Value?"   (Top)

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."

Does the appraisal belong to the bank or the consumer?   (Top)

For mortgage transactions, the lender requests 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 certainly entitled to a copy of the appraisal - 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.

The exception to this rule is when a home owner hires an appraiser directly. In these scenarios, the appraiser may define how the appraisal can be used; 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.

Which home renovations add the most to the price?   (Top)

This really depends on where the home is. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

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 weren't far behind, returning 85%. On the contrary, work that may not add value would be painting just for the sake of redecorating.