Cannizzaro Realty Appraisals & Sales has answers to "Frequently Asked Questions"

Cannizzaro Realty Appraisals & Sales is eager to address any inquiries you might have about appraisals or real estate in Jefferson County. Contact us today to see how we can help solve your specific valuation problems.

Define the term "Appraisal"
What does an appraiser do?
What are the reasons I would need your services?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
After completing the appraisal, what guarantee is there that the value conclusion is valid?
What does it mean for an appraiser to be licensed?
Who are an appraiser's customers?
Where does an appraiser get the data used to estimate values in Jefferson 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?
Does the appraiser need anything from the homeowner in advance?
What is "Market Value?"
Once complete, who actually owns the appraisal report?
Are some home improvements more worthwhile than others?



Define the term "Appraisal"   (See list of FAQ's)

An appraisal report is an investigation leading to an opinion of value. This opinion or estimate is concluded through a formal method that usually uses three "common approaches to value". One of the methods is the Cost Approach - which is how much it would cost to replace the improvements, less physical deterioration and other factors, then adding the land value. The Sales Comparison Approach involves searching for similar properties nearby and figuring out the value based on comparing those homes to the house in question. Usually, the Sales Comparison Approach is the most definite indicator of market value of a residential property. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it deals with estimating what an investor would pay based on the money produced by the property.

What does an appraiser do?   (See list of FAQ's)

An appraiser generates a professional, unbiased determination of market value, often in the context of a real estate purchase. Appraisers document their expert analysis in appraisal reports.


What are the reasons I would need your services?   (See list of FAQ's)

There are a lot of reasons to obtain an appraisal from Cannizzaro Realty Appraisals & Sales with the most common reason being real estate and mortgage transactions. A few other reasons for ordering an appraisal report include:
  • To receive 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 challenge high property taxes.
  • If you need to take care of an estate.
  • To provide you a negotiating tool when purchasing real estate.
  • To determine the most probable property value 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 be involved in a lawsuit - an appraisal will help.
For a more extensive description of the appraisal process click here.


What is the difference between an appraisal and a home inspection?   (See list of FAQ's)

The appraiser is not a home inspector and he or she does not do a full home inspection. The purpose of a home inspection is to investigate the structure of the property from basement to top. For the most part, a home inspection report will evaluate the amenities and the requirements of the property: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

Is an appraisal the same as a comparative market analysis(CMA)?   (See list of FAQ's)

Frankly, they have nothing in common. The CMA uses market trends to generate most of their business. Appraisals use comparable sales which are verifiable resources. The appraisal report will also include location and building prices. 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 most significant factor is the person doing the report. A CMA is created 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 voice, with no vested interest in the value of a home, unlike the agent, whose income is tied to the price of the home.

What does the appraisal report contain?   (See list of FAQ's)

The main purpose 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.
  • The intended use of the report.
  • The purpose of the appraisal.
  • The type of value contained and a definition of that value.
  • The effective date of the appraiser's opinions and conclusions.(Sometimes this is in the past or maybe the future for new construction!)
  • Relevant property characteristics, including: location, physical characteristics, legal attributes, economic attributes, the real property interest valued, 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.
  • 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 job.
For a more comprehensive view of all that goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, what guarantee is there that the value conclusion is valid?   (See list of FAQ's)

In the documentation of an appraisal, each appraiser must ensure the following:
  • The appraisal used an appropriate analysis of the data.

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

  • That appraisal services were not conducted in a careless or negligent fashion.

  • The final appraisal report was clear, credible and conclusive.
There are rigorous classroom and on the job experience requirements that must be met in order to achieve the status of "licensed appraiser" in Louisiana. In addition, appraisers must follow a strict industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for working up an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (See list of FAQ's) Licensing and certification is achieved through classroom study, tests and real world experience. Once an appraiser is licensed, he or she must then complete continuing education courses so the license remains up to date. To see the specific requirements for any state click here.

Who are an appraiser's customers?   (See list of FAQ's)

Commonly, appraisers are called upon by mortgage lenders to render a value opinion on property involved in a loan transaction - to make sure the house is truly adequate collateral for the loan. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does an appraiser get the data used to estimate values in Jefferson County or other areas?   (See list of FAQ's)

Gathering data is one of the primary occupations of an appraiser. Data can be split into Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is gathered from a numerous places. Local Multiple Listing Services (MLS) provide data on recently sold homes that might be used as comparables. To double-check actual sales prices, we use tax records and other public documents. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood system.

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?   (See list of FAQ's)

An appraisal is a valuable tool anytime the value of your home is pertinent to a financial decision. If you're selling your house, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. 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. A house is often the single, largest financial asset anybody owns. Knowing its true value means you can make the right financial decisions.

My mortgage statement has an item on it for PMI? Can I get rid of that?   (See list of FAQ's)

PMI stands for Private Mortgage Insurance. This supplementary plan covers the lender in the event a borrower is unable to pay on the loan and the market price of the home is lower than the balance of the loan. 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.

Is PMI a part of your monthly house payment?Call Cannizzaro Realty Appraisals & Sales today at (504) 831-0507 or send us an e-mail. A new appraisal could save you thousands.

Does the appraiser need anything from the homeowner in advance?   (See list of FAQ's)

The first step in most appraisals is the home 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. On the home's interior, pick up any clutter and make sure we can access things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of outside walls.

To help speed things along plus ensure a more accurate report, try if possible to have the following items:
  • A plot plan or survey of the house and land (if readily available).
  • Title policy that lists encroachments or easements.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
  • 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).
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.

What is "Market Value?"   (See list of FAQ's)

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?   (See list of FAQ's)

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 allowed to use the report for any other purpose without permission from the lender.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. 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 stated otherwise, the home owner can use the appraisal for any purpose.

Are some home improvements more worthwhile than others?   (See list of FAQ's)

Like all things real estate, this is dependent on a home's location. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!

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 atypical for your neighborhood in terms of size.