City Realty, Inc has answers to "Frequently Asked Questions"


	City Realty, Inc is always prepared to address any questions you might have about appraisals or real estate in Desoto County. Feel free to contact us today.

Describe an appraisal
Describe what an appraiser does
What would cause me to need services from City Realty, Inc?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What can I expect to see in my appraisal report?
Once the assignment is done, how can I have certainty that the value conclusion is veritable?
What does it mean for an appraiser to be licensed?
Who engages the services of appraisers?
Where does City Realty, Inc get the information used to estimate values in Desoto County or other areas?
Why should I hire a licensed appraiser?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Does the appraiser need anything from me in advance?
What does "Market Value" mean?
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?

Describe an appraisal (Return to top)

The method of producing an appraisal report deals with an estimation which forms an opinion of value. There are three "common approaches to value" which helps the 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 figuring what the improvements would cost without physical depreciation, adding the land value. The Sales Comparison Approach deals with searching for similar properties in the vicinity and discovering the value based on comparing those properties to the house in question. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a residential property. One of the least common approaches in appraising residential properties is the Income Approach, which is mainly used to figure the market value of a property based on what an investor would pay based on the capital produced by the property.

Describe what an appraiser does (Return to top)

An appraiser generates a professional, unbiased assessment of market value, often in the context of a real estate purchase. Appraisers document their professional conclusions in appraisal reports.

What would cause me to need services from City Realty, Inc? (Return to top)

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

If you are applying for a loan.
To lower your tax burden.
To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
To contest improperly assessed property taxes.
To deal with an estate.
To provide you an edge when purchasing real estate.
To find a reasonable property value when selling your home.
To ensure parties are provided just compensation in eminient domain cases.
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 help.

If you need more information about the appraisal process, please click here.

How is an appraiser different than a home inspector? (Return to top)

Home inspectors do not come to an opinion of value and do not do appraisal reports. An inspection is a third-party investigation of the accessible structure and appliances of a home, from the roof to the bottom. The archetypal house inspector's report will contain an evaluation of the integrity of the property's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible 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)

Frankly, it's apples and oranges. What the CMA relies upon are ill-defined trends. Appraisals use comparable sales which are verifiable resources. Also, the appraisal checks other factors like condition, area and building prices. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the biggest difference is the person doing the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, generate CMA's. A certified, Mississippi licensed professional who bases a career on valuing properties in and around Desoto County creates the appraisal. Moreover, the appraiser is an independent party, with no vested interest in the property's value, unlike the real estate agent, whose income is tied to the value of the home.

What can I expect to see in my appraisal report? (Return to top)

Each appraisal must indicate a credible value opinion and must identify the following:

The client and other intended users.
How the appraisal is supposed to be used.
The appraisal's purpose.
The type of value reported and a definition of the value reported.
The effective date of the appraisal.
Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic attributes, the real property interest in question, 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.
Any 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 involved in the activity 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 is done, how can I have certainty that the value conclusion is veritable? (Return to top)

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

The appraisal contained an apropos analysis of the information.

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

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

The final appraisal report was transparent, sound and defensible.

To become a state licensed appraiser, there are intense education requirements as well as practical experience that must be logged. Plus, appraisers must abide by a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for developing an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Return to top) Regulations regarding licensing and certification vary from state to state. However, licensing and certification is commonly associated with many hours of coursework, tests and real world experience. Once an appraiser is licensed, he or she must then engage in 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? (Return to top)

Typically, appraisers are employed by lenders to estimate the value of real estate involved in a loan transaction. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does City Realty, Inc get the information used to estimate values in Desoto County or other areas? (Return to top)

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

General data is gathered from a many sources. To research recently sold homes to be used as "comps", we typically go to the local Multiple Listing Service. 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 collective knowledge gained from creating appraisals for other houses in the same market.

Why should I hire a licensed appraiser? (Return to top)

If you're involved in any kind of financial decision and the value of your home is relevant, you'll want to hire a licensed appraiser. If you're selling your home, an appraisal will help you determine the most appropriate price. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from City Realty, Inc is the best way to ensure assets are divided evenly. Simply put, a home is often the single, largest financial asset anybody owns. Knowing its true value means you can make the right 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. PMI protects the lender in the event a borrower is unable to pay on the loan and the value of the property is lower than the loan balance. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.


	The savings from dropping the PMI required when you got your mortgage pays for the appraisal in a matter of months. City Realty, Inc is a name you can trust when it comes to value trends in Olive Branch and Desoto County. Contact us today.

Does the appraiser need anything from me in advance? (Return to top)

The first step in most appraisals is the home inspection. 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. On the home's interior, pick up any clutter and make sure 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 outside walls.

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

Written property agreements, such as a maintenance easement for a shared driveway.
Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
Locate copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
A list of "proposed" improvements if the property is to be appraised "as complete".

What does "Market Value" mean? (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)

For mortgage transactions, the lender requests the appraisal, either directly or through a third party. 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 included 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 situations, 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.

Are some home improvements more worthwhile than others? (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, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.

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, 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.