Question 1

What is an Appraisal?

Accepted Answer

Professional real estate appraisers develop opinions of several types  of property value and assist in various decisions about real estate. Standards for the appraisal profession are set forth in the Uniform Standards of Professional Appraisal Practice (USPAP) developed by the Appraisal Standards Board of The Appraisal Foundation. USPAP specifies the procedures to be followed in developing and communicating an appraisal and the ethical rules for appraisal practice. As defined in USPAP, an appraisal is the act or process of developing an opinion of value. The valuation process is a systematic procedure the appraiser follows to answer a client’s question about real property value. The most common type of appraisal assignment is the development of an opinion of market value; however, appraisers can provide a wide range of additional appraisal services—from investment consultation to advice on business and personal financial decisions.

Question 2

What are Appraisals used for?

Accepted Answer

ESTABLISH MARKET VALUE APPRAISALS
Also known as general value inquiries, these private use appraisals are primarily
used for non-financial transactions.

ESTATE APPRAISALS
If you are needing to settle an estate matter you need a professional appraisal
firm with experience providing reliable valuation

TAX APPEALS
The most important evidence you can bring to a Tax Appeal, whether you’re
meeting the board in a formal hearing or a county staff appraiser for an informal
hearing, is an appraisal completed by a professional appraiser

LISTING APPRAISALS
Whether you are selling or buying a home, sometimes an expert opinion can
provide the final assurance that you need to make a decision. These are great
whether you have a Realtor or you are dealing with a FSBO listing. Since all full
appraisals require measurement of the home, you’ll also be assured of the
homes actual Square Footage!

INVESTMENT & RENTAL PROPERTY
Whether you own a single family home, duplexes or several properties knowing
their value, cost of operation, and predicting market trends is an important part of
managing your investment. We offer advanced appraisals specifically for
investment property which calculate these important metrics as well as compare
rents and market trends… all the information that is critical for a landlord!

PMI REMOVAL
This is the type of appraisal you will need to remove Private Mortgage Insurance
from your loan payment. If your home’s value has increased, you may have
enough equity to delete your PMI.

Question 3

What are the 3 Approaches to Value in an Appraisal?

Accepted Answer

Sales Comparison
Appraisers can tell you a lot about the communities in which they work. They innately understand the value of particular features to the people of that area. Then, the appraiser looks up recent sales in close proximity to the subject and finds properties which are "comparable" to the property in question. Using knowledge of the value of certain items such as remodeled rooms, types of flooring, energy efficient items, patios and porches, or extra storage space, we add or subtract from each "comparable" sales price so that they are more accurately in line with the features of subject.
For example, if the comparable property has an extra half bath that the subject doesn't, the appraiser may subtract the value of that half bath from the sales price of the comparable home.
If the subject property has an extra half-bathroom and the comparable does not, the appraiser might add a certain amount to the comparable property.

Cost Approach
This is where we use information on local construction costs, labor rates and other elements to figure out how much it would cost to replace the property being appraised. This estimate commonly sets the maximum on what a property would sell for. It is also the least used method.

Valuation Using the Income Approach
A third way of valuing real estate is sometimes applied when a neighborhood has a measurable number of renter occupied properties. In this situation, the amount of revenue the real estate generates is factored in with other rents in the area for comparable properties to determine the current value.

Question 4

Does the Appraisal begin with the Inspection?

Accepted Answer

YES! The Appraisal begins with the Inspection of the property. To ascertain an accurate status of the property, it is our responsibility to first complete a thorough inspection. We must see aspects of the property first hand, such as the number of bedrooms and bathrooms, the location, living areas, etc, to ensure they really are present and are in the condition a reasonable person would expect them to be. To ensure the stated size of the
property is accurate and describe the layout of the home, the inspection often entails creating a sketch of the floorplan. Most importantly, the appraiser identifies any obvious amenities - or defects - that would have an impact on the value of the property.

Question 5

How do I get ready for an Appraisal?

Accepted Answer

We begin with an inspection of the home. During this process, the appraiser 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 exterior walls.

You can make things go faster and improve the quality of the appraisal report by having the following things on hand:
Information on the latest purchase of the property in the last three years.
A list of any personal property that is part of the home and you intend to be sold
with the home, such as an oven, or a washer and dryer, if applicable.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
"Brag sheet" that lists 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).
Most recent real estate tax bill and or legal description of the property.

Question 6

Who has rights to the Appraisal Report?

Accepted Answer

In most real estate transactions, the appraisal is ordered by the lender. Even though it is the buyer that eventually pays for the report, the lender is the intended user. The buyer is certainly entitled to a copy of the appraisal - it is usually bundled with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

It is different when it is the homeowner is engaging the appraiser for things outside of securing a mortgage. In these scenarios, the appraiser may stipulate the purpose of the appraisal -  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.