Cranwood Appraisals has answers to "Frequently Asked Questions"

Cranwood Appraisals is prepared to handle any questions you might have about appraisals or real estate in Manatee County. Feel free to contact us today.

What is an appraisal?
Describe what an appraiser does
What would cause me to request 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 can I expect to see in my appraisal report?
Once the report has been completed, what guarantee is there that the final number is accurate?
What goes into an appraiser's certification?
Who do appraisers work for?
Where does an appraiser get the information used to estimate values in Manatee 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 appointment
What does "Market Value" mean?
Once complete, who actually owns the appraisal report?
Are some home improvements more worthwhile than others?



What is an appraisal?   (Back to top)

An appraiser provides an evaluation that generates an opinion of value. This opinion or estimate is figured through the use of a formal method that usually uses the three main "common approaches to value". One of the processes in use is the Cost Approach, which is what it would cost to restore the improvements to the home, less the age and physical deterioration, adding the land value. The Sales Comparison Approach involves searching for comparable houses nearby and discovering the value based on making a comparison of those homes to the home in question. Usually, the Sales Comparison Approach is the most definite indicator of market value of a home. One of the least common approaches in appraising homes is the Income Approach, which is commonly used to find the value of a property based on what an investor would pay based on the capital produced by the building.

Describe what an appraiser does   (Back to top)

An appraiser offers an unbiased and well justified opinion of market value, often in the context of a real estate sale. Appraisers illustate their expert conclusions in appraisal reports.


What would cause me to request a real estate appraisal?   (Back to top)

There are a lot of reasons to order an appraisal from Cranwood Appraisals with the usual reason being real estate and mortgage transactions. A few other reasons for purchasing an report include:
  • To get a loan.
  • To lower your property taxes.
  • To build a case for a homeowner's equity and remove insurance.
  • To contest improperly assessed property taxes.
  • If you need to settle an estate.
  • To give you an edge when purchasing real estate.
  • To find a reasonable sales price when listing your home.
  • 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 be involved in a lawsuit - an appraisal will definitely help.
Click here for a more extensive explanation of the process involved in getting an appraisal.


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

The appraiser is not a home inspector nor does he/she do a complete home inspection. The point of a home inspection is to evaluate the structure of the home from bottom to top. The stereotypical house inspector's report will include an evaluation of the condition of the property's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

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

Frankly, it's like comparing sugar and saccharin. The CMA depends on vague trends in the market. The appraisal is based on similar proven comparable sales. Area and building 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 the person behind the report. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, state licensed professional who has formed a career on valuing real estate in and around Manatee County creates the appraisal. Further, the appraiser is an unbiased voice, with no vested interest in the value of a home, unlike the real estate agent, who gets a commission based upon the price of the home.

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

The main objective 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, one will customarily see the following:
  • Who engaged the appraiser and other intended users.
  • The intended use of the report.
  • The reason for the appraisal.
  • The type of value reported and a definition of the value reported.
  • The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
  • Pertinent property attributes, including: location, physical attributes, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed 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.
  • The scope of work considered when completing the job.
For a more comprehensive look at what goes into an appraisal report click here: Sample Appraisal Report


Once the report has been completed, what guarantee is there that the final number is accurate?   (Back to top)

In the documentation of an appraisal, each appraiser must make sure of the following:
  • The appraisal contained a suitable analysis of the data.

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

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

  • That a credible, defensible appraisal report was conferred.
There are rigorous education and experience requirements that must be adhered to in order to become a licensed appraiser in Florida. Likewise, appraisers must stick to a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for working up an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Back to top) Licensing and certification is achieved through classroom study, tests and practical experience. Once an appraiser is licensed, he or 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 do appraisers work for?   (Back to top)

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

Where does an appraiser get the information used to estimate values in Manatee County or other areas?   (Back to top)

One of the main tasks an appraiser performs is to assimilate property data. Data can be described as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is gathered from a number of places. To look up recently sold homes to be used as "comps", an appraiser will typically use the local Multiple Listing Service. To verify actual sales prices, we look at tax records and other public documents that are usually online nowadays. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood servers.

And most importantly, the appraiser assimilates 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)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. For those selling a home, you'll want to determine a 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 house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making the right financial decisions.


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

PMI is an acronym for Private Mortgage Insurance. This added plan guards the lender in case a borrower doesn't pay on the loan and the value of the house is lower than what the borrower still owes on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

The money you keep from cancelling the PMI required when you got your mortgage will make up for the price of the appraisal in a matter of months. Nobody is more qualified than Cranwood Appraisals when it comes to analyzing real estate appreciation in Bradenton and Manatee County. Contact us today.

Should I do anything in advance of the appraisal appointment   (Back to top)

The first step in most appraisals is the property 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, pick up any clutter and make sure we can find our way to 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 expedite our work plus ensure a more accurate report, attempt if possible to have the following items:
  • A survey or plot map of the property and building (if available).
  • Written property agreements, such as a maintenance easement for a shared driveway.
  • 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 wells.
  • Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .

What does "Market Value" mean?   (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."



Once complete, 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 entitled to a copy of the appraisal - 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.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these situations, the appraiser may state 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.


Are some home improvements more worthwhile than others?   (Back to top)

This really depends on where the home is. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 increase the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.