MWK Appraisals inc. has answers to "Frequently Asked Questions"


	MWK Appraisals inc. is always prepared to address any inquiries you might have about appraisals or real estate in Broward County. Feel free to contact us today.

Describe an appraisal
Describe what an appraiser does
What would cause me to need a real estate appraisal?
What is the difference between an appraisal and 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?
Once the report is done, how can I have a guarantee that the value indicated is legitimate?
What goes into an appraiser's certification?
Who are an appraiser's customers?
Where does MWK Appraisals inc. get the information used to estimate values in Broward 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 appointment
What is "Market Value?"
Who has rights to the appraisal report?
Which home renovations add the most to the price?

Describe an appraisal (Return to top)

An appraiser provides an evaluation that leads to an opinion of value. This opinion or estimate is concluded through the use of a formal process that usually uses the three main "common approaches to value". The Cost Approach is one of the processes that appraisers use to find the value of a property; it involves concluding what the improvements would cost minus physical depreciation, adding the land value. The Sales Comparison Approach deals with searching for similar properties nearby and finding value based on making a comparison of those homes to the home being appraised. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a house. The Income Approach is mainly 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.

Describe what an appraiser does (Return to top)

An appraiser offers a professional, unbiased determination of market value, often in the context of a real estate purchase. Appraisers illustate their investigation in appraisal reports.

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

There are a lot of reasons to obtain an appraisal from MWK Appraisals inc. with the usual reason being real estate and mortgage transactions. Other reasons for ordering an appraisal include:

To get a loan.
If you would like to reduce your property tax obligations.
To show a homeowner has 30% equity and remove insurance.
To challenge improperly assessed property taxes.
To settle an estate.
To provide you a leg-up when purchasing a home.
To find an honest property value when selling your home.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Government agencies such as the IRS need an appraisal on every home.
It's possible you could be involved in a lawsuit - an appraisal will definitely help.

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

What is the difference between an appraisal and a home inspection? (Return to top)

Home inspectors do not provide an opinion of value and do not use the same forms as appraisers. The purpose of a home inspection is to investigate the structure of the home from foundation to attic. The general property inspector's report will contain an evaluation of the condition of the house's heating system, 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? (Return to top)

Simply, they share nothing in common. The CMA uses market trends to create most of their business. An appraisal utilizes comparable sales that can be proven by public record. Area and building values are also important in an appraisal. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the most significant factor is who's doing the report. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. 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 accept a previously agreed upon sum for work they perform, regardless of their value conclusion.

What are the contents of an appraisal report? (Return to top)

The main point 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, you'll usually see the following:

The client and whose purposes the appraisal is to serve.
The intended use of the report.
The appraisal's purpose.
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 attributes, legal attributes, economic factors, the real property interest 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 the like.
Division of interest, such as fractional interest, physical segment and partial holding.
The scope of work considered while working up the job.

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

Once the report is done, how can I have a guarantee that the value indicated is legitimate? (Return to top)

In the documentation of an appraisal, each appraiser must ensure the following:

The appraisal used analysis of the data.

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

That appraisal services were done in a careful and cognizant manner.

That a solid, supportable appraisal report was imparted.

To become a state licensed appraiser, we must meet extensive education and experience requirements that enable us to produce an unbiased opinion. Plus, appraisers must obey a strict industry code of ethics and respect national standards of practice for real estate appraisal. The rules for carrying out an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Return to top) Licensing and certification requires coursework, tests and real world experience. Once licensed, he or she is required to engage in continuing education courses so the license remains current. To see the specific requirements for any state click here.

Who are an appraiser's customers? (Return to top)

Typically, appraisers are employed by mortgage lenders to estimate the value of property involved in a loan transaction - to make sure the property is truly adequate collateral for the loan. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does MWK Appraisals inc. get the information used to estimate values in Broward County or other areas? (Return to top)

Gathering information is one of the primary activities of an appraiser. Data can be described as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specifics are gathered by the appraiser while on site.

General data is collected from a number of sources. Local Multiple Listing Services (MLS) provide data on recently sold homes that might be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood system.

And last but not least, the appraiser assembles general data from his or her past experience in doing assignments for other properties in the same market.

Why do I need a professional appraisal? (Return to top)

If you're involved in some sort of financial decision and the value of your home is relevant, you'll want to hire a licensed appraiser. For those selling a home, you'll want to determine a price that gets you the most profit but doesn't leave your home on the market too long; 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 MWK Appraisals inc. is the best documentation to ensure assets are split up fairly. A home is often the single, largest financial asset anybody owns. Knowing its true value means you can make wise financial decisions.

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. It protects the lender if a borrower is unable to pay on the loan and the market price of the property is lower than the balance of the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.


	The savings from getting rid of your PMI pays for the appraisal in a matter of months. Nobody is more qualified than MWK Appraisals inc. when it comes to analyzing real estate appreciation in Plantation and Broward County. Contact us today.

Should I do anything in advance of the appraisal appointment (Return 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. Inside, make sure it is clutter free and that we can access things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of outside walls.

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.
A list of any personal property that will be left behind and 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.
A list of any major home improvements and enhancements, 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".

What is "Market Value?" (Return 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 has rights to the appraisal report? (Return to top)

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 report - it's usually bundled with all the other closing documents - but is not allowed 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 cases, the appraiser may stipulate how the appraisal can be used; 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.

Which home renovations add the most to the price? (Return 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 most value returned 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 are right up there with kitchens, yielding 85%. Adding bedrooms and baths can also help the value of your home (when done well) as long as your home doesn't then become atypical for your neighborhood in terms of size.