Mike Nye has answers to "Frequently Asked Questions"

Mike Nye is always more than happy to answer any inquiries you might have about appraisals or real estate in Cumberland County. Don't hesitate to contact us today.

What is an appraisal?
Describe what an appraiser does
Why would I request a real estate appraisal?
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?
Upon completion of the appraisal, what assurance is there that the final number is legitimate?
What does it mean for an appraiser to be licensed?
Who employs appraisers?
Where does Mike Nye get the data used to estimate values in Cumberland County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
How does an appraiser define "Market Value"?
Who has rights to the appraisal report?
I want to get more for my house. Where should I spend money renovating?



What is an appraisal?   (List of questions)

The appraisal process is an estimation that leads to an opinion of value. The appraiser must use a few "approaches," typically three, to arrive at the estimation of market value. One of the methods in use is the Cost Approach, which is what it would cost to replace the improvements to the house, less the age and physical dilapidation, adding the land value. The Sales Comparison Approach deals with searching for similar properties in the vicinity and discerning value based on comparing those homes to the home being appraised. The Sales Comparison Approach is normally the most definitive and clearest indicator of a liklely sales price for a home. The Income Approach is mainly used for determining the market value of income-producing properties based on what an investor would pay based on the amount of income a property would bring in.

Describe what an appraiser does   (List of questions)

An appraiser provides a professional, unbiased assessment of market value, often in the context of a real estate exchange. Appraisers exhibit their professional conclusions in appraisal reports.


Why would I request a real estate appraisal?   (List of questions)

There are a lot of reasons to order an appraisal from Mike Nye with the usual reason being real estate and mortgage transactions. Some other reasons for ordering an report include:
  • If you are applying for a loan.
  • To reduce your property taxes.
  • To build a case for a homeowner's equity and remove PMI.
  • To contest improperly assessed property taxes.
  • To settle an estate.
  • To provide you a leg-up when purchasing a home.
  • To determine a reasonable sales price when listing your home.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS need an appraisal on every house.
  • If you are ever involved in a lawsuit.
If you need a more detailed explanation of the appraisal process, please click here.


How is an appraisal different than a home inspection?   (List of questions)

Appraisers do not do provide residential property inspections and are not home inspectors. The purpose of a home inspection is to evaluate the structure of the house from basement to rooftop. The standard property inspector's report will include an evaluation of the condition of the house's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible 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)

Simply, they have nothing in common. What the CMA relies upon are superficial trends. An appraisal is based on comparable sales that can be proven by public record. Also, the appraisal checks other factors like condition, area and building costs. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

But the most significant factor is who's creating the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. A certified, North Carolina licensed professional who made their livelihood on valuing real estate in and around Cumberland County is behind the appraisal. Moreover, the appraiser is an independent party, with no vested interest in the property's value, unlike the agent, whose income is tied to the value of the home.

What can I expect to see in my appraisal report?   (List of questions)

The main objective of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, you'll usually see the following:
  • The client and other intended users.
  • How the appraisal is supposed to be used.
  • The reason for the assignment.
  • The type of value contained and a definition of the value reported.
  • The effective date of the value opinion.
  • Pertinent property attributes, 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, permanent equipment installations 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.
  • The scope of work considered to complete the job.
For a more in depth view of the work that goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, what assurance is there that the final number is legitimate?   (List of questions)

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

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

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

  • The final appraisal report was transparent, credible and conclusive.
To become a state licensed appraiser, we must satisfy intense education and experience requirements that train us to produce an unbiased opinion. In addition, appraisers must stick to a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The rules for working up an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (List of questions) Licensing and certification is achieved through coursework, tests and practical experience. Once an appraiser is licensed, he/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 employs appraisers?   (List of questions)

Mortgage lenders are an appraiser's typical client, using their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Mike Nye get the data used to estimate values in Cumberland County or other areas?   (List of questions)

One of the most important tasks an appraiser performs is to assimilate data. Data can be split into Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.

General data is gathered from a many places. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. Tax records and other public documents verify actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood servers.

And most importantly, the appraiser assimilates general data from his or her collective knowledge gained from doing assignments for other houses in the same market.

Why do I need a professional appraisal?   (List of questions)

An appraisal is a worthwhile whenever your home's value is relevant to some financial decision. When selling your home, an appraisal helps you set 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 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 the common abbreviation for for Private Mortgage Insurance. This supplemental plan guards the lender if a borrower is unable to pay on the loan and the value of the house is less than the loan balance. 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? Call Mike Nye today at 9109775365 to see if you can cancel your Private Mortgage Insurance premium.

Should I do anything in advance of the appraisal inspection   (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 condition of its features. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house . Trim any shrubs and move any items that would make it difficult to measure the structure. Indoors, make sure the appraiser can get to appliances like furnaces and water heaters.

To help expedite our work plus ensure a more accurate report, attempt if possible to have the following items:
  • Records on the latest purchase of the property in the last three years.
  • List of personal property to be sold with the home.
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.
  • A list of any major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
  • Find copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.

How does an appraiser 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."

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. 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 included with all the other closing documents - but is not allowed 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 scenarios, 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 do whatever they want with the appraisal.

I want to get more for my house. Where should I spend money renovating?   (List of questions)

The added value of a particular amenity truly depends on the local market. For example, putting in 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. 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 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 an oddball for your neighborhood in terms of size.