CL Appraisals, LLC has answers to "Frequently Asked Questions"

CL Appraisals, LLC is eager to address any questions you might have about appraisals in LONGWOOD and Seminole County. Feel free to contact us today.

What is an appraisal?
Describe what an appraiser does
What are the reasons I would need your services?
What is the difference between an appraisal and a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What can I expect to see in my appraisal report?
Once the assignment has been delivered, how can I have certainty that the value indicated is legitimate?
What does it mean for an appraiser to be licensed?
Who engages the services of appraisers?
Where does CL Appraisals, LLC get the data used to estimate values in Seminole County or other areas?
Why should I hire a licensed appraiser?
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?
Once complete, who actually owns the appraisal report?
Which home renovations add the most to the price?



What is an appraisal?   (Back to top)

The procedure of producing an appraisal consists of an investigation which forms an opinion of value. There are three "common approaches to value" which assists the real estate appraiser conclude this opinion or valuation. One of the processes in use is the Cost Approach, which is what it would cost to replace the improvements to the house, minus age and physical deterioration, adding the land value. Another of the approaches is the Sales Comparison Approach - which deals with making a comparison to other similar properties within a close vicinity which have recently sold. Usually, the Sales Comparison Approach is the most definite indicator of market value of a residential property. 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 a fair and credible opinion of market value, often in the context of a real estate exchange. Appraisers summarize their expert conclusions in appraisal reports.


What are the reasons I would need your services?   (Back to top)

There are a lot of reasons to obtain an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for ordering an report include:
  • To obtain 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 PMI.
  • To fight improperly assessed property taxes.
  • If you need to settle an estate.
  • To offer you an edge when purchasing a home.
  • To figure out a reasonable price when selling real estate.
  • To defend 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 have to deal with being in a lawsuit - an appraisal will definitely help.
For a more extensive explanation of the appraisal process click here.


What is the difference between an appraisal and a home inspection?   (Back to top)

The appraiser is not a home inspector and does not do a complete home inspection. The point of a home inspection is to evaluate the structure of the house from foundation to rooftop. Commonly, a home inspection report will evaluate the amenities and the necessities of the home: 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, 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 blunt, it's like comparing Shakespeare to reality TV. The CMA utilizes market trends to generate most of their business. Appraisals use similar sales which are verifiable resources. Location and building prices are also a priority in an appraisal. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

Who's creating the report is frankly the biggest difference between a CMA and an appraisal. 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. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. 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 accept a previously agreed upon sum for work they perform, regardless of their value conclusion.

What can I expect to see in my appraisal report?   (Back to top)

Each report should reflect a believable value opinion and will document the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • The intended use of the report.
  • The appraisal's purpose.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the value opinion.
  • Pertinent property characteristics, including: location, physical characteristics, legal attributes, economic factors, the property rights in question, and non-real estate items included in the appraisal, such as personal property, trade fixtures 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 activity of completing the appraisal.
For a more detailed view of what goes into an appraisal report click here: Sample Appraisal Report

Once the assignment has been delivered, how can I have certainty that the value indicated is legitimate?   (Back to top)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • The appraisal contained a suitable analysis of the information.

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

  • That appraisal services were not carried out in a careless or negligent fashion.

  • The final appraisal report was clear, credible and conclusive.
To become a state licensed appraiser, we must meet considerable education and experience requirements that enable us to formulate an unbiased opinion. Plus, appraisers must stick to a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for developing 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 requires coursework, tests and experience working under a supervisor. Once licensed, he or she must then complete continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who engages the services of appraisers?   (Back to top)

Mortgage lenders are an appraiser's most likely customer, requiring their services to ensure real estate 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 CL Appraisals, LLC get the data used to estimate values in Seminole 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 from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.

General data is collected from a numerous places. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. Tax records and other public documents reveal actual sales prices in a market. Appraisers routinely need to report when a property is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And most importantly, the appraiser gathers general data from his or her past experience in doing assignments for other houses in the same market.

Why should I hire a licensed appraiser?   (Back to top)

If you're making any kind of financial decision and the value of your home matters, you'll want a full appraisal. If you're selling your home, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from CL Appraisals, LLC is the best way to ensure assets are divided fairly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value means you can make the right financial decisions.

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

PMI is short for for Private Mortgage Insurance. It takes care of the lender if a borrower defaults on the loan and the value of the house is lower 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 amount 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 CL Appraisals, LLC when it comes to analyzing real estate appreciation in LONGWOOD and Seminole County. Contact us today.

Should I do anything in advance of the appraisal inspection   (Back 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 amenities. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house . Trim any bushes and move any items that would get in our way while we measure the structure. Indoors, make sure the appraiser can get to items like furnaces and water heaters.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
  • A survey or plot map of the property and building (if available).
  • Information on any written private agreements, such as a shared driveway with a neighbor.
  • Most recent real estate tax bill and or legal description of the property.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

What does "Market Value" mean?   (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."

Once complete, who actually owns the appraisal report?   (Back to top)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. 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 report - it's usually bundled with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner engages an appraiser directly. In these cases, the appraiser may state how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.

Which home renovations add the most to the price?   (Back to top)

It really depends on the market. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!

As a rule, the most value returned from renovating a home comes in the kitchen. 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%. Adding bedrooms and baths can also help the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.