J. Doyle Knight Appraiser has answers to "Frequently Asked Questions"

J. Doyle Knight Appraiser is eager to handle any inquiries you might have about appraisals in Knox County. Contact us today to learn how we can help solve your valuation problems.

Define the term "Appraisal"
Describe what an appraiser does
What are the reasons a person would need a real estate appraisal?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
After completing the appraisal, how can I have assurance that the value indicated is legitimate?
What goes into an appraiser's certification?
Who do appraisers work for?
Where does J. Doyle Knight Appraiser get the information used to estimate values in Knox County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
How do I get ready for the appraiser?
Define "Market Value"
Once complete, who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?



Define the term "Appraisal"   (Top)

The appraisal process is an estimation that generates an opinion of value. The real estate appraiser will use a number of "approaches," typically three, to draw up the estimation of market value. One of the processes is the Cost Approach - which is what it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. Another of the methods is the Sales Comparison Approach - which deals with discovering a comparable analysis to other similar properties within a close proximity which have recently sold. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a house. 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   (Top)

An appraiser generates a fair and credible determination of market value, to be used in making real estate transactions. Appraisers exhibit their investigation in appraisal reports.


What are the reasons a person would need a real estate appraisal?   (Top)

There are many reasons to purchase an appraisal from J. Doyle Knight Appraiser with the most common reason being real estate and mortgage transactions. Some other reasons for getting an appraisal include:
  • If you are applying for a loan.
  • To reduce your property taxes.
  • 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 handle an estate.
  • To offer you a negotiating tool when purchasing real estate.
  • To find a likely price when selling real estate.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS require an appraisal on every home.
  • 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 appraiser different than a home inspector?   (Top)

Appraisers do not do complete house inspections and are not home inspectors. A third-party home inspector will judge the structure of the home, from the top to the bottom. The usual home inspector's report will contain an evaluation of the integrity of the home's heating system, 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.

Is an appraisal the same as a comparative market analysis(CMA)?   (Top)

Honestly, they share nothing in common. What the CMA depends on are vague trends. The appraisal depends on similar verifiable comparable sales. The appraisal report will also contain location and construction values. 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.

But the largest differentiator is who's behind the report. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Moreover, the appraiser is an unbiased party, with no vested interest in the value conclusion, unlike the agent, whose income is tied to the price of the home.

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

The main point of an appraisal report 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 whose purposes the appraisal is to serve.
  • The intended use of the appraisal.
  • The appraisal's purpose.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the value opinion.
  • Relevant property attributes, including: location, physical characteristics, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the valuation, such as personal property, trade fixtures 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.
  • What was involved in the activity of completing the job.
For a more comprehensive view of all that goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, how can I have assurance that the value indicated is legitimate?   (Top)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
  • The appraisal contained analysis of the data.

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

  • That appraisal services were rendered in a careful and conscientious fashion.

  • The final appraisal report was understandable, legitimate and defensible.
There are rigorous classroom and on the job experience requirements that must be met in order to achieve the status of "licensed appraiser" in Tennessee. In addition, appraisers must abide by a strict 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 guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Top) Licensing and certification takes coursework, tests and practical experience. Once an appraiser is licensed, he/she is required to take continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who do appraisers work for?   (Top)

Mortgage lenders are an appraiser's most likely client, using their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does J. Doyle Knight Appraiser get the information used to estimate values in Knox County or other areas?   (Top)

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

General data is received from a many places. To research recently sold homes to be used as "comps", we often use the local Multiple Listing Service. To verify actual sales prices, we use items in the assessor's office and other public documents that are usually online nowadays. 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 properties in the same market.

Why do I need a professional appraisal?   (Top)

If you're involved in any kind of financial decision and the value of your home is relevant, you'll want a full appraisal. If you're selling your home, an appraisal helps you set the most appropriate price. When buying, you can avoid overpaying by getting an independent appraisal. For people settling an estate or divorce, an appraisal from J. Doyle Knight Appraiser is the best way to ensure assets are divided properly. A house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.

My mortgage statement has an item on it for PMI? Can I get rid of that?   (Top)

PMI stands for Private Mortgage Insurance. This additional policy covers the lender in the event a borrower doesn't pay on the loan and the market price of the home is less than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

Did you secure your mortgage with less than 20% down? Contact J. Doyle Knight Appraiser today at 8655312228. You may be able to cancel your Private Mortgage Insurance payment.

How do I get ready for the appraiser?   (Top)

The first step in most appraisals is the property inspection. During this process, we 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. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house . Trim any shrubs and relocate any items that would make it difficult to measure the structure. Indoors, make sure we can get to appliances 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.
  • Information on any written private easements, such as a shared driveway with a neighbor.
  • Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
  • A list of any major home improvements and enhancements, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
  • Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .

Define "Market Value"   (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."

Once complete, who actually owns the appraisal report?   (Top)

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 bundled 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 engages an appraiser directly. In these cases, the appraiser may define the purpose of the appraisal; 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?   (Top)

The answer to this is different depending upon the location of the home. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

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 are right up there with kitchens, returning 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.