a la mode, inc. has answers to "Frequently Asked Questions"


	a la mode, inc. is always eager to talk to you about any inquiries you might have about appraisals or real estate in Oklahoma County. Don't hesitate to contact us today.

Define the term "Appraisal"
What does an appraiser do?
Why would someone require 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's in an appraisal report?
After completing the appraisal, what guarantee is there that the value conclusion is veritable?
How hard is it to become certified?
Who engages the services of appraisers?
Where does an appraiser get the information used to estimate values in Oklahoma County or other areas?
What can a full appraisal do for 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?
What does "Market Value" mean?
Who has rights to the appraisal report?
I want to get more for my house. Where should I spend money renovating?

Define the term "Appraisal" (Back to top)

An appraiser performs an estimation that produces an opinion of value. There are three "common approaches to value" which assists the real estate appraiser come to this opinion or valuation. The Cost Approach is one of the processes that appraisers use to find the value of a home; it involves discerning what the improvements would cost less physical deterioration, adding the land value. The most common approach in figuring the likely sales price of a house is the Sales Comparison Approach which deals with concluding a comparison to similar properties nearby. Being the most commonly used approach, the Sales Comparison Approach is considered the most precise and best indicator of market value for a residence. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it deals with estimating what an investor would pay based on the income generated by the property.

What does an appraiser do? (Back to top)

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

Why would someone require a real estate appraisal? (Back to top)

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

If you are applying for a loan.
If you would like to lower your property tax burden.
To build a case for a homeowner's equity and remove insurance.
To contest improperly assessed property taxes.
If you need to settle an estate.
To provide you an edge when purchasing real estate.
To determine an honest price when putting your home on the market.
To ensure parties are provided just compensation in eminient domain cases.
Because a government agency such as the IRS requires it.
If you are ever involved in a civil case.

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

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

Home inspectors do not come to an opinion of value and are not appraisers. An inspection is a third-party investigation of the available structure and mechanical systems of a property, from the top to the bottom. Generally, a home inspection report will explain the amenities and the necessities of the property: 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, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

Is an appraisal the same as a comparative market analysis(CMA)? (Back to top)

To be blunt, it's like comparing opera to country. The CMA depends on vague local market trends. The appraisal depends on specific definite comparable sales. Also, the appraisal verifies other factors like condition, location and building costs. 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.

The credentials of the person creating the report is actually the biggest 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, Oklahoma licensed professional who made their livelihood on valuing homes in and around Oklahoma County creates the appraisal. Moreover, the appraiser is an unbiased party, with no conditional interest in the property's value, unlike the agent, who gets a commission based upon the price of the home.

What's in an appraisal report? (Back 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:

Who engaged the appraiser and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraiser's opinions and conclusions.
Pertinent property characteristics, including: location, physical attributes, 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 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 included in the activity of completing the assignment.

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

After completing the appraisal, what guarantee is there that the value conclusion is veritable? (Back to top)

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

The appraisal used an appropriate analysis of the data.

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

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

That a solid, supportable appraisal report was conferred.

There are rigorous classroom and on the job experience requirements that must be fulfilled in order to achieve the status of "licensed appraiser" in Oklahoma. In addition, appraisers must follow a meticulous industry code of ethics and comply with 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).

(Back to top) Regulations regarding licensing and certification vary from state to state. In general, licensing and certification is commonly associated with many hours of classroom study, tests and experience working under a supervisor. Once licensed, he or she must then take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who engages the services of appraisers? (Back to top)

Mortgage lenders are an appraiser's most likely client, needing their services to ensure a home 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 an appraiser get the information used to estimate values in Oklahoma County or other areas? (Back to top)

One of the primary things an appraiser does is to compile data. Data can be described as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.

General data is collected from a numerous sources. Local Multiple Listing Services (MLS) provide data on recently sold homes that could be used as comparables. Tax records and other public documents reveal actual sales prices in a market. Appraisers routinely have 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 product.

And last but not least, 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? (Back to top)

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 figure out 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. 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 is essential to making the right financial decisions.

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

PMI is an acronym for Private Mortgage Insurance. It takes care of 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 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.


	Does your monthly house payment have a lineitem for PMI?Call a la mode, inc. today at 800-252-6633 or send us an e-mail. A current appraisal could save you thousands.

How do I get ready for the appraiser? (Back 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. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any bushes and relocate any items that would make it difficult to measure the structure. On the inside, make sure we can easily access 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:

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 an oven, or a washer and dryer, if applicable.
Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
A list of any major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
A bill for your most recent real estate taxes which should also contain a legal description of the property.

What does "Market Value" mean? (Back 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? (Back 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 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.

This rule doesn't apply when a home owner hires an appraiser directly. 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.

I want to get more for my house. Where should I spend money renovating? (Back 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.

As a rule, the best ROI 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, returning 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.