Heather E. Baggerly-Lucas has answers to "Frequently Asked Questions"


	Heather E. Baggerly-Lucas is always more than happy to talk to you about any inquiries you might have about appraisals or real estate in Wake County. Contact Heather E. Baggerly-Lucas today to see how we can help you with your valuation problems.

Describe an appraisal
What does an appraiser do?
What are the reasons I would need your services?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What does the appraisal report contain?
Upon completion of the appraisal, what assurance is there that the value indicated is legitimate?
What does it mean for an appraiser to be licensed?
Who do appraisers work for?
Where does Heather E. Baggerly-Lucas get the data used to estimate values in Wake County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal inspection
Define "Market Value"
Does the appraisal belong to the bank or the consumer?
Which home renovations add the most to the price?

Describe an appraisal (List of questions)

The appraisal process is an evaluation that leads to an opinion of value. This opinion or estimate is arrived at by using a formal method that usually utilizes three "common approaches to value". One of the methods is the Cost Approach - which is how much it would cost to replace the improvements, minus physical deterioration and other factors, then adding the land value. Another of the methods is the Sales Comparison Approach - which deals with making a comparison to other similar properties within a close vicinity which have recently sold. Being the most common approach, the Sales Comparison Approach tends to be the most accurate and best indicator of market value for a residence. The Income Approach is generally used for finding the market value of income-producing properties based on what an investor would pay based on the amount of income a property produce.

What does an appraiser do? (List of questions)

An appraiser generates a professional, unbiased determination of market value, often in the context of a real estate exchange. Appraisers summarize their professional conclusions in appraisal reports.

What are the reasons I would need your services? (List of questions)

There are many reasons to get an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for getting an report include:

To receive a loan.
If you would like to reduce your property tax burden.
To help a homeowner realize if they owe less than 80% of their home's value and remove Primary Mortgage Insurance.
To contest improperly assessed property taxes.
If you need to settle an estate.
To offer you a leg-up when purchasing real estate.
To find a likely 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 are ever involved in a civil case.

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

How is an appraisal different than a home inspection? (List of questions)

Home inspectors do not figure out an opinion of value and do not use the same forms as appraisers. An inspection is a third-party investigation of the available structure and mechanical systems of a property, from the roof to the foundation. Commonly, a home inspection report will explain the amenities and the requirements of the property: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

What is the difference between an appraisal and a comparative market analysis (CMA)? (List of questions)

Simply put, it's like comparing broadband and dial-up. The CMA uses market trends to generate most of their business. An appraisal utilizes comparable sales that can be verified by records. Also, the appraisal verifies other factors like condition, area and construction costs. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

Who's behind the report is frankly the most significant difference between a CMA and an appraisal. A CMA is written 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, state licensed professional who made a career on valuing homes in and around Wake County creates the appraisal. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a flat sum for work they perform, regardless of their outcome.

What does the appraisal report contain? (List of questions)

Each appraisal should reflect a credible estimate of value and must document the following:

Who engaged the appraiser and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The appraisal's purpose.
The type of value contained and a definition of the value reported.
The effective date of the appraiser's opinions and conclusions.
Relevant property attributes, 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, 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 other items of a similar nature.
Division of interest, such as fractional interest, physical segment and partial holding.
What was entailed in the activity of completing the job.

For a more detailed look at the work that goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, what assurance is there that the value indicated is legitimate? (List of questions)

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

That the information analysis implemented in the appraisal was suitable.

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

That appraisal services were delivered in a careful and cognizant fashion.

The final appraisal report was easy to explain, credible and conclusive.

To become a state licensed appraiser, we must meet intense education and experience requirements that prepare us to formulate an unbiased opinion. Likewise, appraisers must follow a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(List of questions)

Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. However, licensing and certification typically translates to many hours of classroom study, tests and experience working under a supervisory appraiser. Once licensed, he/she must then take continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who do appraisers work for? (List of questions)

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

Where does Heather E. Baggerly-Lucas get the data used to estimate values in Wake County or other areas? (List of questions)

One of the main things an appraiser does is to compile property data. 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 documented by the appraiser while on site.

General data is collected from a numerous places. To find out about recent sales to be used as "comps", an appraiser will often go to the local Multiple Listing Service. To double-check actual sales prices, we look at items in the assessor's office and other public documents that are usually online nowadays. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood system.

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

Why do I need a professional appraisal? (List of questions)

If you're involved in some sort of financial decision and the value of your home is relevant, you'll want a full appraisal. When 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. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A home is often the single, largest financial asset anybody owns. Knowing its true value means you can make informed financial decisions.

My mortgage statement has an item on it for PMI? Can I get rid of that? (List of questions)

PMI is the common abbreviation for for Private Mortgage Insurance. This supplemental plan covers the lender in the event a borrower defaults on the loan and the market price of the house is less 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.


	Does your monthly mortgage payment include a fee for PMI?Call Heather E. Baggerly-Lucas today at 919-653-8737 or send us an e-mail. Documentation of your home's current value could save you thousands.

Should I do anything in advance of the appraisal inspection (List of questions)

We begin with an inspection of the home. 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 amenities. Inside, make sure it is clutter free and that we can find our way to things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of exterior walls.

To help speed things along as well as ensure a more accurate report, try if possible to have the following items:

A survey or plot map of the property and building (if readily available).
A list of any personal property that will be left behind and sold with the home, such as an oven, or a washer and dryer, if applicable.
Any 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".
Most recent real estate tax bill and or legal description of the property.

Define "Market Value" (List of questions)

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."

Does the appraisal belong to the bank or the consumer? (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 certainly 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.

This rule doesn't apply when a home owner engages an appraiser directly. In these scenarios, the appraiser may define the purpose of the appraisal; 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? (List of questions)

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