Parks Appraisals has answers to "Frequently Asked Questions"


	Parks Appraisals is happy to handle any inquiries you might have about appraisals in Ruston and Lincoln County. Feel free to contact us today.

Describe an appraisal
Describe what an appraiser does
What are the reasons a person would request your services?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What does the appraisal report contain?
After completing the appraisal, what assurance is there that the value indicated is legitimate?
What goes into an appraiser's certification?
Who employs appraisers?
Where does Parks Appraisals get the information used to estimate values in Lincoln County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
How do I get ready for the appraiser?
Define "Market Value"
Who has rights to the appraisal report?
I want to get more for my house. Where should I spend money renovating?

Describe an appraisal (Back to top)

An appraisal report is an evaluation allowing the appraiser to come to an opinion of value. This opinion or estimate is figured by a formal method that typically uses the three main "common approaches to value". One of the processes in use is the Cost Approach, which evaluates what it would cost to replace the improvements to the home, minus age and physical dilapidation, plus the land value. Another of the approaches is the Sales Comparison Approach - which concerns making a comparison to other similar properties within a close vicinity which have recently sold. Being the most popular approach, the Sales Comparison Approach is considered the most precise 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 capital a property produce.

Describe what an appraiser does (Back to top)

An appraiser offers an objective and well substantiated determination of market value, in the support of real estate exchanges. Appraisers illustate their professional analysis in appraisal reports.

What are the reasons a person would request your services? (Back to top)

There are a lot of reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for purchasing an appraisal report include:

If you are applying for a loan.
If you would like to lower your property tax burden.
To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
To challenge improperly assessed property taxes.
To settle an estate.
To provide you a negotiating tool when purchasing a home.
To figure out a reasonable sales price when putting your home on the market.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS require an appraisal on every home.
It's possible you could be involved in a lawsuit - an appraisal will help.

If you need a more detailed explanation of the appraisal process, please click here.

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

Appraisers do not do complete home inspections and are not home inspectors. A third-party home inspector will inspect the structure of the home, from the top to the bottom. For the most part, a home inspection report will evaluate the amenities and the requirements of the house: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

My agent performed a CMA for me. Is that the same as an appraisal? (Back to top)

Honestly, they share nothing in common. What the CMA relies upon are ill-defined trends. Appraisals use similar sales which are valid resources. Location and architectural prices are also important in an appraisal. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

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. A certified, state licensed professional who has formed their livelihood on valuing homes in and around Lincoln County is behind the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a previously agreed upon sum for work they perform, regardless of their outcome.

What does the appraisal report contain? (Back to top)

Each report should reflect a credible estimate of value and should document the following:

The client and other intended users.
How the appraisal is supposed to be used.
The purpose of the assignment.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraisal.
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, trade fixtures 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 involved in the process of completing the job.

For a more comprehensive view of all that goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, what assurance is there that the value indicated is legitimate? (Back to top)

In the documentation of an appraisal, each appraiser must ensure the following:

That the information analysis implemented in the appraisal was proper.

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

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

The final appraisal report was transparent, legitimate and defensible.

There are intense classroom and on the job experience requirements that must be adhered to in order to get an appraisal license in Louisiana. Plus, appraisers must obey a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for working up an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Back to top) Licensing and certification takes classroom study, tests and real world experience. Once an appraiser is licensed, he/she is required to engage in continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who employs appraisers? (Back to top)

Mortgage lenders are an appraiser's typical customer, using their services to ensure property involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does Parks Appraisals get the information used to estimate values in Lincoln County or other areas? (Back to top)

One of the main activities of an appraiser is to collect data. Data can be described as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.

General data is gathered from a variety of sources. To find out about recently sold homes to be used as "comps", an appraiser will often use the local Multiple Listing Service. To verify actual sales prices, we use tax records and other public documents. Appraisers routinely have to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

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

Why do I need a professional appraisal? (Back to top)

If you're involved in some sort of financial decision and the value of your home is relevant, you'll want to hire a licensed appraiser. If you're selling your home, an appraisal will help you determine the most appropriate price. 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. 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? (Back to top)

PMI is short for for Private Mortgage Insurance. This supplemental plan guards the lender in the event a borrower is unable to pay on the loan and the market price of the house is less than what is owed 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 savings from cancelling the PMI required when you got your mortgage will make up for the cost of the appraisal in a matter of months. Parks Appraisals is a name you can trust when it comes to value trends in Ruston and Lincoln County. Contact us today.

How do I get ready for the appraiser? (Back to top)

We begin 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. Inside, pick up any clutter and make sure we can find our way 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.

To help expedite our work as well as ensure a more accurate report, try if possible to have the following items:

A survey or plot map of the property and building (if available).
List of personal property to be sold with the building.
Any paperwork, 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 your well.
Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .

Define "Market Value" (Back to 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."

Who has rights to the appraisal report? (Back 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.

This rule doesn't apply when a home owner hires 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 do whatever they want with the appraisal.

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

Like all things real estate, this is dependent on a home's location. For example, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!

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%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.