Bernabe & Barnett Appraisals LLC has answers to "Frequently Asked Questions"

Bernabe & Barnett Appraisals LLC is more than happy to address any inquiries you might have about appraisals or real estate in Forsyth County. Contact us today to see how we can help solve your valuation problems.

What is an appraisal?
What does an appraiser do?
What are the reasons I would need services from Bernabe & Barnett Appraisals LLC?
What is the difference between an appraisal and a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What does the appraisal report contain?
Upon completion of the report, how can I have assurance that the final number is accurate?
What goes into an appraiser's certification?
Who employs appraisers?
Where does an appraiser get the information used to estimate values in Forsyth County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
Define "Market Value"
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?



What is an appraisal?   (Go to list of  questions)

An appraisal is a thought process allowing the appraiser to come to an opinion of value. This opinion or estimate is discerned using a formal process that generally uses the three main "common approaches to value". One of the methods in use is the Cost Approach, which is what it would cost to restore the improvements to the property, less the age and physical dilapidation, plus the land value. Easily the most common approach in finding the likely sales price of a home is the Sales Comparison Approach which deals with concluding a comparison to comparable houses nearby. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a home. The third approach is the Income Approach, which is the best method in appraising income producing properties - it deals with estimating what an investor would pay based on the capital generated by the property.

What does an appraiser do?   (Go to list of  questions)

An appraiser offers a professional, unbiased opinion of market value, often in the context of a real estate sale. Appraisers illustate their professional analysis in appraisal reports.


What are the reasons I would need services from Bernabe & Barnett Appraisals LLC?   (Go to list of  questions)

There are many reasons to obtain an appraisal from Bernabe & Barnett Appraisals LLC with the usual reason being real estate and mortgage transactions. Some other reasons for obtaining an report include:
  • If you are applying for a loan.
  • To reduce your tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove insurance.
  • To contest inflated property taxes.
  • To settle an estate.
  • To give you a negotiating tool when purchasing a home.
  • To figure out a likely sales price when putting your home on the market.
  • 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 property.
  • It's possible you could be involved in a lawsuit - an appraisal will definitely help.
If you need a more detailed explanation of the appraisal process, please click here.


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

Home inspectors do not estimate an opinion of value and do not use the same forms as appraisers. An inspection is a third-party evaluation of the accessible structure and systems of a home, from the roof to the bottom. For the most part, a home inspection report will evaluate the amenities and the requirements of the home: 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, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

My agent performed a CMA for me. Is that the same as an appraisal?   (Go to list of  questions)

To be honest, they share nothing in common. The CMA depends on indefinite market trends. Appraisals use comparable sales which are valid resources. Location and building costs are also a priority in an appraisal. All a CMA does is generate 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 frankly 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 created by a licensed, certified professional who has made a career out of valuing properties. Moreover, the appraiser is an independent voice, with no conditional interest in the property's value, unlike the real estate agent, who gets a commission based upon the value of the home.

What does the appraisal report contain?   (Go to list of  questions)

Each appraisal should indicate a believable value opinion and will identify the following:
  • Who engaged the appraiser and other intended users.
  • The intended use of the appraisal.
  • The reason for the appraisal.
  • The type of value reported 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!)
  • Pertinent property characteristics, including: location, physical description, legal attributes, economic factors, the property rights in question, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible factors.
  • 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.
  • The scope of work considered to complete the appraisal.
For a more comprehensive look at the work that goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the report, how can I have assurance that the final number is accurate?   (Go to list of  questions)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • That the information analysis implemented in the appraisal was proper.

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

  • That appraisal services were not carried out in a careless or negligent manner.

  • That a credible, substantiated appraisal report was communicated.
To become a state licensed appraiser, there are education requirements as well as real world experience that must be logged - all with the end goal of gaining the skills required to render unbiased value opinions. In addition, 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 guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Go to list of  questions) Regulations regarding licensing and certification are different from state to state. In general, licensing and certification is most often associated with many hours of coursework, 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 employs appraisers?   (Go to list of  questions)

Most of the time, appraisers are employed by mortgage lenders to render a value opinion on real estate involved in a loan transaction. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does an appraiser get the information used to estimate values in Forsyth County or other areas?   (Go to list of  questions)

Compiling information is one of the primary activities of an appraiser. Data can be divided into Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser while on site.

General data is gathered from a many places. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. Tax records and other public documents reveal 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 creating appraisals for other properties in the same market.

How can a licensed appraiser help me?   (Go to 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. If you're selling your home, an appraisal assists you in setting the most appropriate price. 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. Without knowing its real value, wise financial decisions are impossible.

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

PMI is short for for Private Mortgage Insurance. This added plan takes care of the lender if a borrower is unable to pay on the loan and the market price of the house is less 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 getting rid of your PMI will make up for the price of the appraisal in no time. Nobody is more qualified than Bernabe & Barnett Appraisals LLC when it comes to analyzing real estate appreciation in Winston Salem and Forsyth County. Contact us today.

How do I get ready for the appraiser?   (Go to list of  questions)

The first step in most appraisals is the property 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 shrubs and relocate any items that would get in our way while we measure the structure. On the inside, make sure we can easily access items like furnaces and water heaters.

You can make our visit go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • Any information on the purchase of the property for the last three years.
  • Information on any written private easements, such as a shared driveway with a neighbor.
  • Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
  • A list of any major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
  • Information on "Homeowners Associations" or condominium covenants and fees.

Define "Market Value"   (Go to 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?   (Go to list of  questions)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. 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 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.

The exception to this rule is when a home owner hires an appraiser directly. In these situations, the appraiser may state 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.

How can I get the most ROI out of home improvements?   (Go to list of  questions)

This really depends on where the home is. For example, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!

As a rule, the most value returned 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 weren't far behind, yielding 85%. Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.