Miller Appraisal Services, LLC has answers to "Frequently Asked Questions"


	Miller Appraisal Services, LLC is always eager to handle any concerns you might have about appraisals in Anderson and Madison County. Contact us today to learn how we can help you with your valuation problems.

What is an appraisal?
Describe what an appraiser does
Why would someone request your services?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
Once the report is done, how can I have a guarantee that the final number is veritable?
How are appraisers certified?
Who employs appraisers?
Where does an appraiser get the information used to estimate values in Madison County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What is "Market Value?"
Who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?

What is an appraisal? (Back to top)

An appraiser performs an estimation that leads to an opinion of value. The appraiser will typically use a number of "approaches," typically three, to arrive at the estimation of market value. One of the processes in use is the Cost Approach, which finds what it would cost to restore the improvements to the house, less the depreciation and physical dilapidation, plus the land value. The Sales Comparison Approach deals with finding comparable properties in the vicinity and discovering the value based on making a comparison of those prior sales to the house in question. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a house. The Income Approach is generally used for finding the market value of income-producing properties based on what an investor would pay based on the amount of income a property produce.

Describe what an appraiser does (Back to top)

An appraiser generates an unprejudiced and well supported opinion of market value, to be used in making real estate transactions. Appraisers summarize their professional analysis in appraisal reports.

Why would someone request your services? (Back to top)

There are many reasons to get an appraisal from Miller Appraisal Services, LLC with the usual reason being real estate and mortgage transactions. Other reasons for obtaining an appraisal report include:

To obtain a loan.
If you would like to reduce your property tax obligations.
To show a homeowner has 30% equity and remove insurance.
To fight improperly assessed property taxes.
To handle an estate.
To provide you a leg-up when purchasing real estate.
To find a reasonable property value when selling real estate.
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 house.
It's possible you could be involved in a lawsuit - an appraisal will help.

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

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

Appraisers do not do provide house inspections and are not home inspectors. The point of a home inspection is to investigate the structure of the property from basement to rooftop. Commonly, a home inspection report will discuss the amenities and the necessities of the home: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

What is the difference between an appraisal and a comparative market analysis (CMA)? (Back to top)

Simply put, it's like comparing broadband and dial-up. The CMA depends on vague market trends. An appraisal utilizes comparable sales that can be verified by records. Area and architectural costs are also important in an appraisal. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

The person behind the report is actually the biggest difference between a CMA and an appraisal. Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, state licensed professional who bases a career on valuing properties in and around Madison County creates the appraisal. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat sum for work they perform, regardless of their outcome.

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

Each appraisal must reflect a believable value opinion and will identify the following:

Who engaged the appraiser and other intended users.
How the appraisal is supposed to be used.
The reason for the appraisal.
The type of value contained and a definition of that value.
The effective date of the appraisal.
Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible considerations.
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.
The scope of work used while working up the job.

For a more comprehensive view of all that goes into an appraisal report click here: Sample Appraisal Report

Once the report is done, how can I have a guarantee that the final number is veritable? (Back to top)

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

That the information analysis utilized in the appraisal was proper.

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

That appraisal services were delivered in a careful and cognizant fashion.

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

To become a state licensed appraiser, we must meet considerable education and experience requirements that train us to formulate an unbiased opinion. Plus, appraisers must stick to a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for working up an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Back to top) Licensing and certification is achieved through coursework, tests and real world experience. Once an appraiser is licensed, he/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 employs appraisers? (Back to top)

Commonly, appraisers are hired by mortgage lenders to render a value opinion on a home 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 Madison County or other areas? (Back to top)

One of the main things an appraiser does is to collect data. Data can be categorized as either Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is gathered from a number of sources. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. To double-check actual sales prices, we research tax records and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood system.

And most importantly, the appraiser assimilates 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? (Back to top)

If you're making some sort of financial decision and the value of your home matters, you'll want a full appraisal. For those selling a home, you'll want to determine 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. When buying, be sure you're not overpaying by getting an independent appraisal. For parties settling an estate or divorce, an appraisal from Miller Appraisal Services, LLC is the best documentation to ensure assets are split up evenly. A house is often the single, largest financial asset anybody owns. Knowing its true value means you can make smart financial decisions.

What exactly is PMI and how can I get rid of it? (Back to top)

PMI is an acronym for Private Mortgage Insurance. PMI takes care of the lender if a borrower defaults on the loan and the market price of the home 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.


	Has your home value appreciated since you first purchased? Contact Miller Appraisal Services, LLC today at 317-572-7879 to see if you can get rid of your Private Mortgage Insurance premium.

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

We start with an inspection of the home. 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 condition of its amenities. Inside, make sure it is clutter free and that we can find our way to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of exterior walls.

To help expedite our work plus ensure a more accurate report, try if possible to have the following items:

A survey or plot map of the property and building (if readily available).
Information on any written private easements, such as a shared driveway with a neighbor.
Title policy that describes encroachments or easements.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

What is "Market Value?" (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 actually owns 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 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 stipulate how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stated 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, 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.

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 weren't far behind, yielding 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.