Wood Appraisal Service has answers to "Frequently Asked Questions"

Wood Appraisal Service is happy to reply to any inquiries you might have about appraisals in Saint Clair County. Feel free to contact us today.

What is an appraisal?
Describe what an appraiser does
What are the reasons I would need a real estate appraisal?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What are the contents of an appraisal report?
Upon completion of the appraisal, how can I have assurance that the value indicated is veritable?
What are the requirements to be a certified appraiser?
Who employs appraisers?
Where does Wood Appraisal Service get the data used to estimate values in Saint Clair 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?
Should I do anything in advance of the appraisal appointment
How does an appraiser define "Market Value"?
Who actually owns the appraisal report?
How can I get the most ROI out of home improvements?



What is an appraisal?   (Back to top)

An appraiser performs an estimation that leads to an opinion of value. This opinion or estimate is concluded through a formal process that generally uses the three main "common approaches to value". The Cost Approach is one of the processes that appraisers use to find value; it involves finding what the improvements would cost minus physical degradation, plus the land value. The Sales Comparison Approach involves searching for comparable homes in the vicinity and figuring out the value based on making a comparison of those houses to the property in question. 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. The Income Approach is mainly used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of income a property produce.

Describe what an appraiser does   (Back to top)

An appraiser provides an unprejudiced and well substantiated determination of market value, in the support of real property exchanges. Appraisers demonstrate their expert conclusions in appraisal reports.


What are the reasons I would need a real estate appraisal?   (Back to top)

There are a lot of reasons to order an appraisal with the most common reason being real estate and mortgage transactions. Some other reasons for ordering an report include:
  • To get a loan.
  • If you would like to lower your property tax obligations.
  • To demonstrate a homeowner's acquired equity and remove insurance.
  • To fight improperly assessed property taxes.
  • To settle an estate.
  • To give you a leg-up when purchasing a home.
  • To figure out an honest price when selling your home.
  • To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Because an official agency such as the IRS requires it.
  • If you ever find yourself in a lawsuit.
For a more detailed explanation of the appraisal process click here.


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

Appraisers do not do provide residential property inspections and are not home inspectors. The purpose of a home inspection is to evaluate the structure of the property from foundation to attic. For the most part, a home inspection report will evaluate the amenities and the necessities of the property: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, visible 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)

To be honest, they share nothing in common. The CMA depends on indefinite market trends. The appraisal depends on similar definite comparable sales. Also, the appraisal verifies other factors like condition, location and construction costs. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

Who's creating the report is frankly the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, create CMA's. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Moreover, the appraiser is an independent voice, with no conditional interest in the value of a home, unlike the agent, who gets a commission based upon the value of the home.

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

The main purpose of an appraisal report is to let the reader know the value of the real estate in question, and depending on the scope of the report, you'll usually see the following:
  • The client and other intended users.
  • How the appraisal is supposed to be used.
  • The purpose of the assignment.
  • The type of value reported and a definition of that value.
  • The effective date of the value opinion.(Sometimes this is in the past or maybe the future for new construction!)
  • Relevant property characteristics, including: location, physical characteristics, legal attributes, economic attributes, 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 considerations.
  • Any 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 included in the process of completing the appraisal.
For a more detailed view of what goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, how can I have assurance that the value indicated is veritable?   (Back to top)

In communicating an appraisal report, each appraiser must ensure the following:
  • That the information analysis contained in the appraisal was appropriate.

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

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

  • The final appraisal report was understandable, sound and not easily discredited.
There are rigorous classroom and on the job experience requirements that must be met in order to become a licensed appraiser in Alabama. Likewise, appraisers must obey a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Back to top) Licensing and certification takes coursework, tests and experience working under a supervisory appraiser. Once licensed, he/she is required to complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers?   (Back to top)

Mortgage lenders are an appraiser's typical customer, requiring their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Wood Appraisal Service get the data used to estimate values in Saint Clair County or other areas?   (Back to top)

Gathering data is one of the primary tasks an appraiser performs. Data can be divided into Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.

General data is collected from a numerous sources. To find out about recently sold homes to be used as "comps", an appraiser will typically use the local Multiple Listing Service. To double-check actual sales prices, we look at items in the assessor's office and other public documents. Appraisers often have to report when a property is in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And last but not least, the appraiser gathers 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 making any kind of financial decision and the value of your home is relevant, you'll want to hire a licensed appraiser. When selling your home, an appraisal assists you in setting the most appropriate price. When buying, you can avoid overpaying by getting an independent appraisal. 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.

My mortgage statement has an item on it for PMI? Can I get rid of that?   (Back to top)

PMI stands for Private Mortgage Insurance. This additional policy takes care of the lender in the event a borrower doesn't pay on the loan and the value of the house 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.

Did you secure your mortgage with less than 20% down? Contact Wood Appraisal Service today at 205-884-1608 to see if you can get rid of your Private Mortgage Insurance premium.

Should I do anything in advance of the appraisal appointment   (Back to 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 features. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and relocate any items that would get in our way while we measure the structure. On the inside, make sure the appraiser can easily access items like furnaces and water heaters.

You can make things go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • Any records on the purchase of the property for the last three years.
  • List of personal property to be sold with the building.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
  • Locate copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.

How does an appraiser define "Market Value"?   (Back 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."

Who actually owns the appraisal report?   (Back to top)

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 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.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these situations, the appraiser may stipulate the purpose of the appraisal; 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.

How can I get the most ROI out of home improvements?   (Back to top)

A home's location - what city it is in and even what part of that city - is key to this popular question. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

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, returning 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.