Denton & Kennamer Appraisals has answers to "Frequently Asked Questions"

Denton & Kennamer Appraisals is ready to address any questions you might have about appraisals or real estate in the North Alabama market area. Feel free to contact us today.

Define the term "Appraisal"
What does an appraiser do?
What are the reasons I would request services from Denton & Kennamer Appraisals?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Upon completion of the report, how can I have a guarantee that the value indicated is trustworthy?
How hard is it to become certified?
Who do appraisers work for?
Where does Denton & Kennamer Appraisals get the information used to estimate values in Madison County or other areas?
Why should I hire a Certified Residential Real Property appraiser?
What exactly is PMI and how can I get rid of it?
Do you need anything from me in advance?
Define "Market Value"
Does the appraisal belong to the bank or the consumer?
Which home renovations add the most to the price?



Define the term "Appraisal"   (List of questions)

The method of writing an appraisal report deals with 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 processes 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 searching for comparable homes nearby and discerning value based on comparing those homes to the home in question. The Sales Comparison Approach is normally the most definitive and clearest indicator of a liklely sales price for a residential property. One of the least common approaches in appraising houses is the Income Approach, which is mainly used to find the value of a property based on what an investor would pay based on the capital produced by the property.

What does an appraiser do?   (List of questions)

An appraiser generates a fair and credible determination of market value, in the support of real property transactions. Appraisers illustate their professional findings in appraisal reports.


What are the reasons I would request services from Denton & Kennamer Appraisals?   (List of questions)

There are a lot of reasons to order an appraisal from Denton & Kennamer Appraisals with the usual reason being real estate and mortgage transactions. Some other reasons for getting an report include:
  • To receive a loan.
  • If you would like to reduce your property tax obligations.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
  • To challenge improperly assessed property taxes.
  • To deal with an estate.
  • To provide you an edge when purchasing a home.
  • To determine a reasonable property value when selling your home.
  • To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Because an official agency such as the IRS requires it.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.
If you need more information regarding the appraisal process, please click here.


Is an appraisal the same as a home inspection?   (List of questions)

Appraisers do not do provide home inspections and are not home inspectors. The point of a home inspection is to investigate the structure of the property from foundation to top. Generally, a home inspection report will discuss the amenities and the necessities of the home: air conditioning (weather permitting), electrical services, 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 visible structures.

Is an appraisal the same as a comparative market analysis(CMA)?   (List of questions)

Frankly, they have nothing in common. What the CMA depends on are superficial trends. Appraisals use similar sales which are verifiable resources. The appraisal report will also contain area and construction 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 actually the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. A Certified Residential Real Property appraiser who bases their livelihood on valuing homes in and around the North Alabama market area is behind the appraisal. Moreover, the appraiser is an independent voice, with no conditional interest in the property's value, unlike the real estate agent, whose income is tied to the price of the home.

What are the contents of an appraisal report?   (List of questions)

Each report should demonstrate a supported estimate of value and will identify the following:
  • Who engaged the appraiser 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 appraiser's opinions and conclusions.(Sometimes this is in the past or maybe the future for new construction!)
  • Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic attributes, the real property interest valued, 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 the like.
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • What was entailed in the activity of completing the appraisal.
For a more comprehensive view of what goes into an appraisal report click here: Sample Appraisal Report


Upon completion of the report, how can I have a guarantee that the value indicated is trustworthy?   (List of questions)

In the documentation of an appraisal, each appraiser must make sure of the following:
  • The appraisal contained an apropos analysis of the data.

  • 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 conscientious fashion.

  • The final appraisal report was clear, credible and defensible.
To become a state licensed appraiser, there are extensive education requirements as well as experience that must be logged. Likewise, appraisers must follow a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The rules 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 vary from state to state. In general, licensing and certification typically translates to many hours of classroom study, tests and real world experience. Once licensed, he/she is required to engage in continuing education courses so the license stays current. To see the specific requirements for any state
click here.

Who do appraisers work for?   (List of questions)

Mortgage lenders are an appraiser's typical client, requiring their services to ensure property involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Denton & Kennamer Appraisals get the information used to estimate values in Madison County or other areas?   (List of questions)

Gathering information is one of the primary activities of an appraiser. Data can be categorized as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.

General data is received from a many places. To find out about recent sales to be used as "comps", we often use the local Multiple Listing Service. To double-check actual sales prices, we research tax records and other public documents that are usually online nowadays. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood service.

And last but not least, the appraiser gathers general data from his or her collective knowledge gained from doing assignments for other houses in the same market.


Why should I hire a Certified Residential Real Property appraiser?   (List of questions)

If you're making some sort of financial decision and the value of your home is relevant, you'll want an appraisal. When selling your house, an appraisal helps you set a price that maximizes profit and reduces time on the market. When buying, you can avoid overpaying by getting an independent appraisal. For those settling an estate or divorce, an appraisal from Denton & Kennamer Appraisals is the best documentation to ensure assets are divided fairly. Simply put, a home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.


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

PMI is short for for Private Mortgage Insurance. It takes care of the lender if 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.

The savings from cancelling the PMI required when you got your mortgage will make up for the price of the appraisal in a matter of months. Denton & Kennamer Appraisals has years of experience with value trends in the North Alabama market area. Contact us today.

Do you need anything from me in advance?   (List of questions)

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. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house . Trim any shrubs and relocate any items that would get in our way while we measure the structure. Indoors, make sure the appraiser can easily access appliances like furnaces and water heaters.

You can make our visit go faster and improve the quality of the appraisal report by having the following things on hand:
  • Any records on the purchase of the property for the last three years.
  • List of personal property to be sold with the building.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
  • A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades 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.

Define "Market Value"   (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."



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. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is certainly 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.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these scenarios, the appraiser may state 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?   (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, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

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 are right up there with kitchens, returning 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 overbuilt for your neighborhood in terms of size.