Gus Glascock Company, LLC has answers to "Frequently Asked Questions"


	Gus Glascock Company, LLC is always prepared to address any questions you might have about appraisals or real estate in Chattanooga and Hamilton County. Contact Gus Glascock Company, LLC today to talk about how we can help solve your specific valuation problems.

What is an appraisal?
What does an appraiser do?
What would cause me to need 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's in an appraisal report?
Once the assignment has been completed, what assurance is there that the value conclusion is trustworthy?
What does it mean for an appraiser to be licensed?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in Hamilton County or other areas?
How can a licensed appraiser help me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
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?

What is an appraisal? (Return to top)

The method of producing an appraisal consists of an investigation which leads to an opinion of value. There are three "common approaches to value" which helps the real estate appraiser arrive at this opinion or valuation. One of the three is the Cost Approach - which is how much capital would be required to replace the improvements, less physical deterioration and other factors, plus the land value. The Sales Comparison Approach deals with finding comparable houses in close proximity and discerning value based on comparing those prior sales to the property being appraised. The Sales Comparison Approach is normally the most definitive and clearest indicator of a liklely sales price for a residence. The Income Approach is primarily used for finding the market value of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in.

What does an appraiser do? (Return to top)

An appraiser produces a professional, unbiased determination of market value, often in the context of a real estate purchase. Appraisers reveal the details of their analysis in appraisal reports.

What would cause me to need a real estate appraisal? (Return to top)

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

If you are applying for a loan.
To lower your tax burden.
To help a homeowner realize if they owe less than 80% of their home's value and remove Primary Mortgage Insurance.
To challenge improperly assessed property taxes.
To settle an estate.
To give you a leg-up when purchasing real estate.
To determine a likely sales price when putting your home on the market.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS need an appraisal on every property.
If you are ever involved in a lawsuit.

Click here for a more extensive explanation of the process dealing with getting an appraisal.

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

Appraisers do not do perform house inspections and are not home inspectors. An inspection is a third-party investigation of the livable structure and mechanical systems of a property, from the roof to the bottom. For the most part, a home inspection report will evaluate the amenities and the requirements of the home: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

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

Frankly, it's like comparing broadband and dial-up. What the CMA relies upon are superficial trends. Appraisals use similar sales which are valid resources. In addition, the appraisal verifies other factors like condition, neighborhood and building costs. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the largest differentiator is who's behind the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, create CMA's. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Moreover, the appraiser is an unbiased party, with no vested interest in the value of a home, unlike the agent, who gets a commission based upon the price of the home.

What's in an appraisal report? (Return to top)

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, you'll usually see the following:

The client and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The reason for the assignment.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the value opinion.(Sometimes this is in the past or maybe the future for new construction!)
Relevant property attributes, including: location, physical attributes, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the appraisal, 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 the like.
Division of interest, such as fractional interest, physical segment and partial holding.
What was entailed in the process of completing the job.

For a more in depth look at all that goes into an appraisal report click here: Sample Appraisal Report

Once the assignment has been completed, what assurance is there that the value conclusion is trustworthy? (Return to top)

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

That the information analysis utilized in the appraisal was suitable.

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

That appraisal services were not carried out in a careless or negligent fashion.

The final appraisal report was easy to explain, sound and not easily discredited.

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

(Return to top) Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. However, licensing and certification is commonly associated with many hours of classroom study, tests and practical 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? (Return to top)

Typically, appraisers are hired by lenders to render a value opinion on property involved in a loan transaction. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

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

One of the most important activities of an appraiser is to gather data. Data can be split into Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.

General data is gathered from a many places. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. To verify actual sales prices, we use tax records and other public documents. Appraisers routinely need to report when a property lies 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 assembles general data from his or her past experience in creating appraisals for other properties in the same market.

How can a licensed appraiser help me? (Return to top)

If you're involved in any kind of financial decision and the value of your home matters, you'll want an appraisal. If you're selling your house, an appraisal helps you set a price that maximizes profit and reduces time on the market. When buying, be sure you're not overpaying by getting an independent appraisal. For parties settling an estate or divorce, an appraisal from Gus Glascock Company, LLC is the best documentation to ensure assets are split up evenly. Simply put, a home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

My mortgage statement has an item on it for PMI? Can I get rid of that? (Return to top)

PMI is an acronym for Private Mortgage Insurance. PMI protects the lender in case a borrower doesn't pay on the loan and the value of the house is lower than what is owed 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 house payment have a lineitem for PMI?Call Gus Glascock Company, LLC today at 4238255300 or send us an e-mail. Documentation of your home's present value could save you thousands.

How do I get ready for the appraiser? (Return to top)

We begin with an inspection of the property. During this process, the appraiser 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. Inside, pick up any clutter and make sure we can get to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of outside walls.

To help speed things along plus ensure a more accurate report, attempt if possible to have the following items:

Any information on the purchase of the property for the last three years.
A list of any personal property that is part of the home and you intend to be sold with the home, such as a oven, or a washer and dryer, if applicable.
A bill for your most recent real estate taxes which should also contain a legal description of the property.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
Information on "Homeowners Associations" or condominium covenants and fees.

How does an appraiser define "Market Value"? (Return to top)

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."

Who has rights to the appraisal report? (Return 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 the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can use the appraisal for any purpose.

How can I get the most ROI out of home improvements? (Return to top)

It really depends on the market. 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 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 were second, returning 85%. Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.