Centennial Appraisal Group has answers to "Frequently Asked Questions"

Centennial Appraisal Group is always happy to reply to any concerns you might have about appraisals in Wilmington and New Hanover County. Don't hesitate to contact us today.

Define the term "Appraisal"
What does an appraiser do?
What would cause me to request your services?
What is the difference between an appraisal and a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
After completing the appraisal, what guarantee is there that the final number is trustworthy?
What are the requirements to be a certified appraiser?
Who are an appraiser's customers?
Where does Centennial Appraisal Group get the data used to estimate values in New Hanover County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
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?



Define the term "Appraisal"   (List of questions)

An appraisal is an inspection that concludes with an opinion of value. This opinion or estimate is figured through the use of a formal process that commonly utilizes three "common approaches to value". The Cost Approach is one of the approaches that appraisers use to find the value of a home; it involves finding what the improvements would cost minus physical deterioration, adding the land value. The most common approach in figuring the value of a home is the Sales Comparison Approach which involves figuring a comparison to similar properties close by. The Sales Comparison Approach is normally the most accurate and best indicator of a liklely sales price for a residence. 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.

What does an appraiser do?   (List of questions)

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


What would cause me to request your services?   (List of questions)

There are a lot of reasons to order an appraisal from Centennial Appraisal Group with the usual reason being real estate and mortgage transactions. A few other reasons for ordering an appraisal include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax burden.
  • To demonstrate a homeowner's acquired equity and remove insurance.
  • To contest improperly assessed property taxes.
  • If you need to take care of an estate.
  • To provide you an edge when purchasing a home.
  • To find a reasonable price when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS require an appraisal on every home.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will help.
Click here for a more extensive explanation of the process involved in getting an appraisal.


What is the difference between an appraisal and a home inspection?   (List of questions)

The appraiser is not a home inspector and he or she does not do a complete home inspection. The point of a home inspection is to evaluate the structure of the property from bottom to rooftop. The standard property inspector's report will contain an evaluation of the condition of the home'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.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (List of questions)

To be blunt, it's night and day. The CMA utilizes market trends to generate most of their business. Appraisals use similar sales which are verifiable resources. Area and construction prices are also important in an appraisal. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

The person creating the report is actually the most significant difference between a CMA and an appraisal. Real estate agents produce 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 has made a career out of valuing properties. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to accept a flat sum for work they perform, regardless of their value conclusion.

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

Each appraisal must indicate a supported estimate of value and must clearly state the following:
  • Who engaged the appraiser and other intended users.
  • How the appraisal is supposed to be used.
  • The purpose of the assignment.
  • The type of value contained and a definition of the value reported.
  • The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
  • Relevant property characteristics, including: location, physical description, legal attributes, economic attributes, the property rights 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 other items of a similar nature.
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • What was involved in the process of completing the job.
For a more comprehensive look at all that goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, what guarantee is there that the final number is trustworthy?   (List of questions)

In communicating an appraisal report, each appraiser must make sure of the following:
  • That the information analysis utilized in the appraisal was appropriate.

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

  • That appraisal services were delivered in a careful and judicious manner.

  • That a trustworthy, defensible appraisal report was imparted.
There are intense classroom and on the job experience requirements that must be met in order to get an appraisal license in North Carolina. Plus, appraisers must obey a strict industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for working up an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (List of questions) Regulations regarding licensing and certification vary from state to state. However, licensing and certification is most often associated with many hours of classroom study, tests and real world experience. Once an appraiser is licensed, he or she is required to take continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who are an appraiser's customers?   (List of questions)

Mortgage lenders are an appraiser's typical client, using 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 retain the services of appraisers for asset division and estate settlements.

Where does Centennial Appraisal Group get the data used to estimate values in New Hanover County or other areas?   (List of questions)

One of the primary tasks an appraiser must accomplish is to collect data. Data can be described as either Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.

General data is collected from a number of sources. To research recent sales to be used as "comps", an appraiser will often go to the local Multiple Listing Service. Tax records and other public documents verify actual sales prices in a market. Appraisers often need 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 most importantly, the appraiser assembles general data from his or her collective knowledge gained from doing assignments for other houses in the same market.

What can a full appraisal do for me?   (List of questions)

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 the 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. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making informed financial decisions.

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

PMI is the common abbreviation for for Private Mortgage Insurance. It guards the lender in the event a borrower doesn't pay on the loan and the market price of the house is less 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 real estate appreciated since you first purchased? Contact Centennial Appraisal Group today at 3039026048. You may be able to save money by removing your Private Mortgage Insurance payment.

Should I do anything in advance of the appraisal appointment   (List of questions)

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. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house . Trim any bushes and relocate any items that would make it difficult to measure the structure. Indoors, make sure the appraiser can get to items like furnaces and water heaters.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
  • Records on the latest purchase of the property in the last three years.
  • Title policy that describes encroachments or easements.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
  • Brag sheet that lists major home improvements and enhancements, 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.

What is "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."

Who has rights to the appraisal report?   (List of questions)

For mortgage transactions, the lender orders 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 bundled 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 define 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)

This really depends on where the home is. 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.

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 were second, yielding 85%. Adding bedrooms and baths can also boost the value of your home (when done well) as long as your home doesn't then become an oddball for your neighborhood in terms of size.