Cornerstone Valuations has answers to "Frequently Asked Questions"


	Cornerstone Valuations is always eager to answer any questions you might have about appraisals or real estate in Edgewater and Volusia County. Don't hesitate to contact us today.

Define the term "Appraisal"
What does an appraiser do?
What would cause me to request a real estate appraisal?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
Upon completion of the report, what assurance is there that the value conclusion is veritable?
What does it mean for an appraiser to be licensed?
Who employs appraisers?
Where does Cornerstone Valuations get the data used to estimate values in Volusia County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
How does an appraiser define "Market Value"?
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?

Define the term "Appraisal" (Go to list of questions)

The appraisal process is an evaluation that generates an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or valuation. One of the three is the Cost Approach - which is how much it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value. The Sales Comparison Approach involves searching for comparable homes nearby and discerning value based on comparing those houses to the house being appraised. Being the most common approach, the Sales Comparison Approach tends to be the most precise and best indicator of market value for a house. The Income Approach is primarily 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 would bring in.

What does an appraiser do? (Go to list of questions)

An appraiser forumlates a professional, unbiased assessment of market value, to be used in making real estate transactions. Appraisers illustate their professional findings in appraisal reports.

What would cause me to request a real estate appraisal? (Go to list of questions)

There are many reasons to get an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for obtaining an report include:

To receive a loan.
To reduce your tax burden.
To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
To challenge inflated property taxes.
To deal with an estate.
To offer you a leg-up when purchasing real estate.
To find an honest 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 a government agency such as the IRS requires it.
If you are ever involved in a lawsuit.

If you need more information regarding the appraisal process, please click here.

How is an appraisal different than a home inspection? (Go to list of questions)

Appraisers do not do complete residential property inspections and are not home inspectors. A third-party home inspector will investigate the structure of the property, from the top to the bottom. The standard house inspector's report will contain an evaluation of the integrity of the home'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)? (Go to list of questions)

To be honest, they have nothing in common. The CMA relies on vague local market trends. Appraisals use similar sales which are valid resources. In addition, the appraisal checks other factors like condition, location and replacement costs. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

Who's behind the report is frankly the biggest difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, Florida licensed professional who has formed a career on valuing properties in and around Volusia County creates the appraisal. Moreover, the appraiser is an independent voice, with no vested interest in the value of a home, unlike the agent, whose income is tied to the price of the home.

What does the appraisal report contain? (Go to list of questions)

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, one will customarily see the following:

Who engaged the appraiser and other intended users.
The intended use of the appraisal.
The purpose of the appraisal.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraisal.
Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic factors, the property rights valued, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible considerations.
All 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.
What was included in the process of completing the job.

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

Upon completion of the report, what assurance is there that the value conclusion is veritable? (Go to list of questions)

In communicating an appraisal report, each appraiser must make sure of the following:

That the information analysis contained in the appraisal was suitable.

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

That appraisal services were delivered in a careful and judicious manner.

That a solid, defensible appraisal report was communicated.

There are rigorous classroom and real world experience requirements that must be met in order to achieve the title of "licensed appraiser" in Florida. Likewise, appraisers must obey a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for carrying out an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Go to list of questions) Licensing and certification takes coursework, tests and practical experience. 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? (Go to list of questions)

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

Where does Cornerstone Valuations get the data used to estimate values in Volusia County or other areas? (Go to list of questions)

Collecting information is one of the primary tasks an appraiser engages in. Data can be classified as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is received from a many places. To look up recent sales to be used as "comps", we typically go to the local Multiple Listing Service. Tax records and other courthouse documents reveal actual sales prices in a market. Appraisers routinely have 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 service.

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

Why should I hire a licensed appraiser? (Go to list of questions)

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. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Cornerstone Valuations is the best way to ensure assets are divided fairly. A home is often the single, largest financial asset anybody owns. Knowing its true value means you can make smart financial decisions.

What exactly is PMI and how can I get rid of it? (Go to list of questions)

PMI is the common abbreviation for for Private Mortgage Insurance. This supplementary policy covers the lender in case a borrower defaults on the loan and the market price of the home is lower than what the borrower still owes 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 Cornerstone Valuations today at 3862104220 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? (Go to list of questions)

We start with an inspection of the home. 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. The best thing you can do to help is make sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any shrubs and move any items that would make it difficult to measure the structure. On the inside, make sure the appraiser can get to items like furnaces and water heaters.

To help expedite our work plus ensure a more accurate report, try if possible to have the following items:

Information on any written private easements, such as a shared driveway with a neighbor.
Any documents, 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, septic systems and wells.
Brag sheet that lists 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 list of "proposed" improvements when the property is being appraised "as complete".

How does an appraiser define "Market Value"? (Go to list of questions)

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 has rights to the appraisal report? (Go to list of questions)

In most real estate transactions, the appraisal is ordered by the lender. 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 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.

It's different when it's the homeowner hiring 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? (Go to list of questions)

Like all things real estate, this is dependent on a home's location. 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.

No matter where you go, however, renovating a kitchen is almost always a safe move. 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 were second, yielding 85%. On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.