Eckert Appraisal Group, Inc. has answers to "Frequently Asked Questions"

Eckert Appraisal Group, Inc. is always ready to elaborate on any questions you might have about appraisals or real estate in Broward County. Contact Eckert Appraisal Group, Inc. today to see how we can help solve your valuation problems.

What is an appraisal?
What does an appraiser do?
Why would a person require a real estate appraisal?
How is an appraisal different than a home inspection?
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 a guarantee that the value indicated is accurate?
What goes into an appraiser's certification?
Who hires an appraiser?
Where does an appraiser get the data used to estimate values in Broward County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
Define "Market Value"
Who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?



What is an appraisal?   (Back to top)

The appraisal process is an evaluation that leads to an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or valuation. The Cost Approach is one of the processes that real estate appraisers use to find value; it involves finding what the improvements would cost without physical degradation, adding 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. The Sales Comparison Approach is commonly the most accurate and clearest indicator of a liklely sales price for a residence. One of the least common approaches in appraising houses is the Income Approach, which is generally used to find the value of a property based on what an investor would pay based on the income produced by the building.

What does an appraiser do?   (Back to top)

An appraiser produces a professional, unbiased assessment of market value, in the support of real estate transactions. Appraisers exhibit their professional findings in appraisal reports.


Why would a person require a real estate appraisal?   (Back to top)

There are many reasons to get an appraisal from Eckert Appraisal Group, Inc. with the usual reason being real estate and mortgage transactions. Other reasons for getting an appraisal report include:
  • To receive a loan.
  • To lower your property taxes.
  • To demonstrate a homeowner's acquired equity and remove insurance.
  • To contest inflated property taxes.
  • If you need to take care of an estate.
  • To provide you a leg-up when purchasing a home.
  • To find an honest sales price when putting your home on the market.
  • 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.
  • It's possible you could be involved in a lawsuit - an appraisal will definitely help.
For a more detailed explanation of the appraisal process click here.


How is an appraisal different than a home inspection?   (Back to top)

Home inspectors do not provide an opinion of value and do not do appraisal reports. A third-party home inspector will investigate the structure of the house, from the roof to the foundation. The stereotypical home inspector's report will include an evaluation of the integrity 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.

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

Frankly, it's like comparing Shakespeare to reality TV. What the CMA depends on are vague trends. The appraisal is based on similar proven comparable sales. The appraisal report will also contain neighborhood and building prices. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

The person creating the report is hands down the biggest difference between a CMA and an appraisal. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Further, the appraiser is an unbiased party, with no vested interest in the value conclusion, unlike the agent, whose income is tied to the value of the home.

What are the contents of an 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:
  • The client and other intended users.
  • How the appraisal is supposed to be used.
  • The appraisal's purpose.
  • The type of value contained and a definition of that value.
  • The effective date of the appraiser's opinions and conclusions.(Sometimes this is in the past or maybe the future for new construction!)
  • Pertinent property attributes, including: location, physical attributes, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible considerations.
  • 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 used while working up the job.
For a more comprehensive view of what goes into an appraisal report click here: Sample Appraisal Report


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

In communicating an appraisal report, each appraiser must make sure of the following:
  • That the information analysis implemented in the appraisal was appropriate.

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

  • That appraisal services were provided in a careful and cognizant fashion.

  • The final appraisal report was transparent, legitimate and conclusive.
To become a state licensed appraiser, we must fulfill intense education and experience requirements that train us to produce an unbiased opinion. Likewise, appraisers must stick to a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for developing an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Back to top) Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. In general, licensing and certification is most often associated with many hours of coursework, tests and real world experience. Once an appraiser is licensed, he or she must then take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who hires an appraiser?   (Back to top)

Mortgage lenders are an appraiser's typical client, requesting their services to ensure a home involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

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

One of the main activities of an appraiser is to compile property data. Data can be categorized as either Specific or General. Specific data is 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 variety of sources. 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. 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 service.

And last but not least, the appraiser gathers general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.


How can a licensed appraiser help me?   (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 the price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. When buying, be sure you're not overpaying by commissioning an independent appraisal. For parties settling an estate or divorce, an appraisal from Eckert Appraisal Group, Inc. is the best way to ensure assets are split up fairly. A house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.


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

PMI is an acronym for Private Mortgage Insurance. PMI guards the lender if a borrower defaults on the loan and the market price of the property is lower than what is owed on the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.

Does your monthly loan payment include a fee for PMI?Call Eckert Appraisal Group, Inc. today at (954)742-7775 or send us an e-mail. Documentation of your home's current value could save you thousands.

How do I get ready for the appraiser?   (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 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 shrubs 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.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
  • Any records on the purchase of the property for the last three years.
  • Written property agreements, such as a maintenance agreement for a shared driveway.
  • Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
  • A list of any major home improvements and upgrades, 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 copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

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 actually owns the appraisal report?   (Back to top)

For mortgage transactions, the lender orders 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 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.

The exception to this rule is when a home owner engages an appraiser directly. In these scenarios, 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.


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

As a rule, the best ROI from renovating a home comes in the kitchen. 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 help the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.