Abacus Appraisal, Inc. has answers to "Frequently Asked Questions"


	Abacus Appraisal, Inc. is more than happy to talk to you about any concerns you might have about appraisals or real estate in Escambia County. Don't hesitate to contact us today.

What is an appraisal?
What does an appraiser do?
Why would I require your services?
How is an appraisal different than 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 appraisal has been completed, what guarantee is there that the final number is valid?
How hard is it to become certified?
Who are an appraiser's customers?
Where does an appraiser get the data used to estimate values in Escambia County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Do you need anything from the homeowner in advance?
What does "Market Value" mean?
Once complete, who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?

What is an appraisal? (See list of FAQ's)

The method of writing an appraisal report deals with an inspection which forms an opinion of value. There are three "common approaches to value" which assists the appraiser arrive at this opinion or estimate. The Cost Approach is one of the processes that appraisers use to find the value of a home; it involves finding what the improvements would cost less physical depreciation, plus the land value. Another of the processes is the Sales Comparison Approach - which deals with discovering a comparison to other similar nearby properties which have recently sold. Being the most common approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a property. The third approach is the Income Approach, which is the best method in appraising income producing properties - it deals with estimating what an investor would pay based on the money produced by the property.

What does an appraiser do? (See list of FAQ's)

An appraiser forumlates a professional, unbiased opinion of market value, often in the context of a real estate sale. Appraisers summarize their professional findings in appraisal reports.

Why would I require your services? (See list of FAQ's)

There are many reasons to get an appraisal from Abacus Appraisal, Inc. with the most common reason being real estate and mortgage transactions. A few other reasons for ordering an appraisal include:

To obtain a loan.
If you would like to lower your property tax obligations.
To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
To contest high property taxes.
If you need to take care of an estate.
To give you an edge when purchasing a home.
To determine a likely sales price when selling your home.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS need an appraisal on every home.
If you ever find yourself in a lawsuit.

For a more detailed description of the appraisal process click here.

How is an appraisal different than a home inspection? (See list of FAQ's)

Home inspectors do not come to an opinion of value and do not use the same forms as appraisers. An inspection is a third-party investigation of the livable structure and systems of a home, from the top to the bottom. For the most part, a home inspection report will evaluate the amenities and the necessities of the home: 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.

Is an appraisal the same as a comparative market analysis(CMA)? (See list of FAQ's)

Simply put, it's apples and oranges. The CMA uses market trends to conduct most of their business. The appraisal relies on specific valid comparable sales. The appraisal report will also include neighborhood and building prices. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

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 be trained in technical valuation concepts or even have a handle on market trends. A certified, Florida licensed professional who made a career on valuing real estate in and around Escambia County creates 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 collect only a previously agreed upon sum for work they perform, regardless of their value conclusion.

What can I expect to see in my appraisal report? (See list of FAQ's)

The main objective of an appraisal document 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 contained 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 real property interest in question, and non-real estate items included in the valuation, such as personal property, permanent equipment installations 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.
The scope of work used when completing the job.

For a more detailed view of what goes into an appraisal report click here: Sample Appraisal Report

Once the appraisal has been completed, what guarantee is there that the final number is valid? (See list of FAQ's)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:

That the information analysis contained in the appraisal was suitable.

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

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

The final appraisal report was clear, credible and defensible.

To become a state licensed appraiser, we must fulfill intense education and experience requirements that enable us to formulate an unbiased opinion. Likewise, appraisers must obey a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for working up an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's) Licensing and certification takes coursework, tests and real world experience. Once licensed, he or she must then complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who are an appraiser's customers? (See list of FAQ's)

Mortgage lenders are an appraiser's typical client, requesting their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does an appraiser get the data used to estimate values in Escambia County or other areas? (See list of FAQ's)

Collecting data is one of the primary things an appraiser performs. Data can be described as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.

General data is received from a variety of sources. To research recent sales to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. To verify actual sales prices, we look at items in the assessor's office and other public documents. Appraisers routinely need to report when a property lies 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 assimilates general data from his or her past experience in doing assignments for other properties in the same market.

What can a full appraisal do for me? (See list of FAQ's)

An appraisal is a worthwhile whenever your home's value is relevant to a financial decision. For those selling a home, you'll want to determine a 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 getting an independent appraisal. For parties settling an estate or divorce, an appraisal from Abacus Appraisal, Inc. is the best documentation to ensure assets are split up properly. A home 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? (See list of FAQ's)

PMI is an acronym for Private Mortgage Insurance. PMI takes care of the lender in case a borrower defaults on the loan and the market price of the property is less 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.


	The amount you keep from getting rid of 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 Abacus Appraisal, Inc. when it comes to analyzing real estate appreciation in Pensacola and Escambia County. Contact us today.

Do you need anything from the homeowner in advance? (See list of FAQ's)

We start with an inspection of the property. During this process, we will come to your home and measure it, determine the layout of the rooms inside, confirm all aspects of the home's general condition, and take several photos of your house for inclusion in the report. 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 . Trim any landscaping and move any items that would make it difficult to measure the structure. On the inside, make sure we can get to appliances 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:

Records on the latest purchase of the property in the last three years.
List of personal property to be sold with the home.
Information on "Homeowners Associations" or condominium covenants and fees.
A list of any major home improvements and enhancements, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
A list of "suggested" improvements when the property is being appraised "as complete".

What does "Market Value" mean? (See list of FAQ's)

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? (See list of FAQ's)

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 certainly entitled to a copy of the appraisal - it's usually included with all the other closing documents - but is not allowed 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 stipulate 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 use the appraisal for any purpose.

I want to get more for my house. Where should I spend money renovating? (See list of FAQ's)

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 were second, returning 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.