Galpin Industries has answers to "Frequently Asked Questions"

Galpin Industries is always more than happy to handle any concerns you might have about appraisals or real estate in Oklahoma County. Contact Galpin Industries today to talk about how we can help you with your valuation problems.

Describe an appraisal
Describe what an appraiser does
What would cause me to request 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?
Once the assignment is done, how can I have a guarantee that the value conclusion is veritable?
What are the requirements to be a certified appraiser?
Who employs appraisers?
Where does Galpin Industries get the data used to estimate values in Oklahoma 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?
Do you need anything from me in advance?
Define "Market Value"
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?



Describe an appraisal   (Top)

The appraisal process is an evaluation that generates an opinion of value. This opinion or estimate is arrived at using a formal process that typically uses the three main "common approaches to value". One of them is the Cost Approach - which is how much capital would be required to replace the improvements, minus physical deterioration and other factors, plus the land value. Another of the methods is the Sales Comparison Approach - which deals with making a comparison to other similar nearby properties 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 generally used for determining the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.

Describe what an appraiser does   (Top)

An appraiser offers an unbiased and well supported assessment of market value, in the support of real property exchanges. Appraisers illustate their expert investigation in appraisal reports.


What would cause me to request your services?   (Top)

There are a lot of reasons to purchase an appraisal from Galpin Industries with the most common reason being real estate and mortgage transactions. Other reasons for ordering an appraisal include:
  • To obtain a loan.
  • To lower your property taxes.
  • To show a homeowner has 30% equity and remove insurance.
  • To challenge improperly assessed property taxes.
  • To settle an estate.
  • To offer you an edge when purchasing real estate.
  • To figure out the most probable 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 definitely help.
Click here for a more extensive explanation of the process dealing with getting an appraisal.


What is the difference between an appraisal and a home inspection?   (Top)

Home inspectors do not figure out an opinion of value and do not do appraisal reports. An inspection is a third-party evaluation of the livable structure and electrical and mechanical systems of a home, from the roof to the bottom. Usually, a home inspection report will evaluate the amenities and the requirements of the home: 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, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

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

Frankly, it's like comparing Shakespeare to reality TV. What the CMA depends on are vague trends. The appraisal is based on specific definite comparable sales. Location and construction prices are also precedent in an appraisal. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

Who's behind the report is actually the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat sum for assignments, regardless of their value conclusion.

What does the appraisal report contain?   (Top)

The main purpose of an appraisal report is to provide a value opinion, 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 report.
  • The appraisal's purpose.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the value opinion.
  • Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible factors.
  • 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.
  • The scope of work used while working up the appraisal.
For a more in depth look at what goes into an appraisal report click here: Sample Appraisal Report

Once the assignment is done, how can I have a guarantee that the value conclusion is veritable?   (Top)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • The appraisal used an appropriate analysis of the data.

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

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

  • That a solid, defensible appraisal report was communicated.
There are rigorous education and on the job experience requirements that must be satisfied in order to get an appraisal license in Oklahoma. Likewise, appraisers must stick to a strict industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for developing an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Top) Licensing and certification takes classroom study, tests and practical experience. Once an appraiser is licensed, he or she is required to engage in continuing education courses so the license remains current. To see the specific requirements for any state click here.

Who employs appraisers?   (Top)

Most of the time, appraisers are employed by mortgage lenders to render a value opinion on a house involved in a loan transaction - to make sure the house is indeed adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Galpin Industries get the data used to estimate values in Oklahoma County or other areas?   (Top)

One of the primary activities of an appraiser is to gather property data. Data can be classified as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.

General data is received from a variety of sources. To research recently sold homes to be used as "comps", an appraiser will typically use the local Multiple Listing Service. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers often have to report when a property lies in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

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)

An appraisal is a valuable tool whenever the value of your home is relevant to some financial decision. If you're selling your house, an appraisal will help you determine a price that maximizes profit and reduces time on the market. When buying, be sure you're not overpaying by getting an independent appraisal. 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 is essential to making wise financial decisions.

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

PMI is short for for Private Mortgage Insurance. This supplemental policy protects the lender in the event a borrower is unable to pay on the loan and the market price of the property 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 will make up for the cost of the appraisal in no time. Nobody is more qualified than Galpin Industries when it comes to analyzing real estate appreciation in Oklahoma City and Oklahoma County. Contact us today.

Do you need anything from me in advance?   (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 the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any shrubs and relocate any items that would make it difficult to measure the structure. On the inside, make sure the appraiser can easily access 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:
  • Information on any written private agreements, such as a shared driveway with a neighbor.
  • A list of any personal property that will be left behind and sold with the home, such as an oven, or a washer and dryer, if applicable.
  • Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
  • Locate copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.
  • Most recent real estate tax bill from Oklahoma and or legal description of the property.

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."

Who has rights to the appraisal report?   (Top)

In most real estate transactions, the appraisal is ordered by the lender. 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 certainly 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.

This rule doesn't apply when a home owner engages an appraiser directly. In these scenarios, 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?   (Top)

The answer to this is different depending upon the location of the home. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 were second, returning 85%. Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size.