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

Hollingsworth Appraisal Services, LLC is ready to talk to you about any inquiries you might have about appraisals in Boone County. Don't hesitate to contact us today.

Describe an appraisal
What does an appraiser do?
What would cause me to require your services?
Is an appraisal the same as a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What are the contents of an appraisal report?
Once the report is done, what assurance is there that the final number is veritable?
What goes into an appraiser's certification?
Who do appraisers work for?
Where does Hollingsworth Appraisal Services, LLC get the data used to estimate values in Boone 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 appointment
Define "Market Value"
Who actually owns the appraisal report?
How can I get the most ROI out of home improvements?



Describe an appraisal   (Back to top)

The method of writing an appraisal report deals with an inspection which leads to an opinion of value. There are three "common approaches to value" which assists the real estate appraiser come to this opinion or estimate. The Cost Approach is one of the methods that real estate appraisers use to find value; it involves finding what the improvements would cost without physical deterioration, plus the land value. Another of the processes is the Sales Comparison Approach - which concerns finding a comparison to other similar properties within a close proximity which have recently sold. Being the most commonly used approach, the Sales Comparison Approach tends to be the most precise and best indicator of market value for a residence. One of the least common approaches in appraising residential properties is the Income Approach, which is mainly used to find the value of a property based on what an investor would pay based on the capital produced by the building.

What does an appraiser do?   (Back to top)

An appraiser produces an unprejudiced and well substantiated determination of market value, in the support of real property exchanges. Appraisers present their expert analysis in appraisal reports.


What would cause me to require your services?   (Back to top)

There are many reasons to order an appraisal from Hollingsworth Appraisal Services, LLC with the usual reason being real estate and mortgage transactions. Some other reasons for purchasing an report include:
  • If you are applying for a loan.
  • To lower your property taxes.
  • To show a homeowner has 30% equity and remove insurance.
  • To fight improperly assessed property taxes.
  • If you need to take care of an estate.
  • To give you an edge when purchasing a home.
  • To find a reasonable sales price when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because a government agency such as the IRS requires it.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will help.
For a more extensive explanation of the appraisal process click here.


Is an appraisal the same as a home inspection?   (Back to top)

Appraisers do not do perform house inspections and are not home inspectors. A third-party home inspector will inspect the structure of the property, from the roof to the bottom. Generally, a home inspection report will discuss the amenities and the requirements of the property: 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, exposed 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?   (Back to top)

Simply put, it's like comparing broadband and dial-up. The CMA relies on indistinct market trends. The appraisal is reliant on similar valid comparable sales. Also, the appraisal checks other factors like condition, area and construction prices. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the most significant factor is the person behind the report. Real estate agents produce CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, Missouri licensed professional who bases a career on valuing homes in and around Boone County is behind the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a flat fee for assignments, regardless of their outcome.

What are the contents of an appraisal report?   (Back to top)

Each appraisal should demonstrate a credible estimate of value and must document the following:
  • Who engaged the appraiser and other intended users.
  • How the appraisal is supposed to be used.
  • The reason for the appraisal.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the value opinion.
  • Pertinent property attributes, including: location, physical attributes, legal attributes, economic factors, the property rights in question, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible factors.
  • 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.
  • What was entailed in the process of completing the appraisal.
For a more comprehensive look at the work that goes into an appraisal report click here: Sample Appraisal Report

Once the report is done, what assurance is there that the final number is veritable?   (Back to top)

In the documentation of an appraisal, each appraiser must make sure of the following:
  • The appraisal contained analysis of the information.

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

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

  • That a believable, defensible appraisal report was imparted.
To become a state licensed appraiser, we must meet extensive education and experience requirements that prepare us to formulate an unbiased opinion. Plus, appraisers must follow a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for working up an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Back to top) Regulations regarding licensing and certification are different from state to state. However, licensing and certification is commonly associated with many hours of classroom study, tests and practical experience. Once an appraiser is licensed, he or she must then complete continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who do appraisers work for?   (Back to top)

Mortgage lenders are an appraiser's most likely client, requesting their services to ensure property involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does Hollingsworth Appraisal Services, LLC get the data used to estimate values in Boone County or other areas?   (Back to top)

Compiling data is one of the primary things an appraiser performs. Data can be categorized as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser while on site.

General data is received from a numerous sources. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. To double-check actual sales prices, we use items in the assessor's office and other public documents. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood system.

And last but not least, the appraiser assimilates general data from his or her past experience in creating appraisals for other houses in the same market.

Why do I need a professional appraisal?   (Back to top)

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 determine a price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from Hollingsworth Appraisal Services, LLC is the best documentation to ensure assets are divided evenly. 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?   (Back to top)

PMI stands for Private Mortgage Insurance. This supplemental policy takes care of the lender in the event a borrower doesn't pay on the loan and the market price of the house is lower than what is owed on 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.

The savings from getting rid of your PMI pays for the appraisal in no time. Nobody is more qualified than Hollingsworth Appraisal Services, LLC when it comes to analyzing real estate appreciation in Mexico and Boone County. Contact us today.

Should I do anything in advance of the appraisal appointment   (Back to top)

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 condition of its features. The best thing you can do to help is make sure we have easy access to the exterior of the house . Trim any shrubs and relocate any items that would make it difficult to measure the structure. On the inside, make sure we can get to items like furnaces and water heaters.

To help expedite our work as well as ensure a more accurate report, attempt if possible to have the following items:
  • Information on any written private agreements, such as a shared driveway with a neighbor.
  • Title policy that lists encroachments or easements.
  • Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
  • A list of any major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
  • A list of "proposed" improvements if the property is to be appraised "as complete".

Define "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)

For mortgage transactions, the lender requests 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 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.

This rule doesn't apply 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 noted otherwise, the home owner can use the appraisal for any purpose.

How can I get the most ROI out of home improvements?   (Back to top)

It really depends on the market. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

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 were second, yielding 85%. Adding bedrooms and baths can also help the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.