Professional Appraisal Services, L.L.C. (262)914-5626 has answers to "Frequently Asked Questions"
What is an appraisal?
Describe what an appraiser does
Why would I require your services?
How is an appraiser different than a home inspector?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
Once the appraisal has been completed, what guarantee is there that the final number is veritable?
What does it mean for an appraiser to be licensed?
Who employs appraisers?
Where does Professional Appraisal Services, L.L.C. (262)914-5626 get the information used to estimate values in Kenosha County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Do you need anything from me in advance?
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?
What is an appraisal? (Go to list of questions)
An appraisal is an estimation leading to an opinion of value.
This opinion or estimate is concluded by using a formal method that generally utilizes 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.
The Sales Comparison Approach involves searching for comparable properties nearby and discovering the value based on making a comparison of those prior sales to the property being investigated.
The Sales Comparison Approach is normally the most accurate and clearest indicator of a liklely sales price for a residential property.
The Income Approach is primarily used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in.
Describe what an appraiser does (Go to list of questions)
An appraiser provides an impartial and well substantiated assessment of market value, often in the context of a real estate purchase.
Appraisers show their expert investigation in appraisal reports.
Why would I require your services? (Go to list of questions)
There are many reasons to get an appraisal with the most common reason being real estate and mortgage transactions.
Other reasons for getting an appraisal include:
- To obtain a loan.
- To lower your property taxes.
- To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
- To contest inflated property taxes.
- If you need to settle an estate.
- To give you an edge when purchasing real estate.
- To figure out a likely sales price when selling your home.
- To ensure parties are provided just compensation in eminient domain cases.
- Government agencies such as the IRS need an appraisal on every home.
- If you ever find yourself in a civil case.
If you need more information about the appraisal process, please click here.
The appraiser is not a home inspector nor does he/she do a comprehensive home inspection.
An inspection is a third-party evaluation of the accessible structure and systems of a house, from the roof to the foundation.
Commonly, a home inspection report will evaluate the amenities and the necessities 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, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.
What is the difference between an appraisal and a comparative market analysis (CMA)? (Go to list of questions)
To be honest, they have nothing in common.
The CMA relies on indefinite market trends.
The appraisal is reliant on similar verifiable comparable sales.
Location and construction values are also precedent in an appraisal.
All a CMA does is generate a "ball park figure."
An appraisal delivers a defensible and carefully documented opinion of value.
But the biggest difference is who's creating the report.
Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation.
The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties.
Further, the appraiser is an independent voice, with no vested interest in the value conclusion, unlike the agent, whose income is tied to the value of the home.
The main objective 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:
- Who engaged the appraiser and other intended users.
- How the appraisal is supposed to be used.
- The appraisal's purpose.
- Precisely what "value" attribute is being reported and what that value means.
- 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 attributes, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible items.
- 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.
- What was included in the process of completing the job.
For a more in depth view of what goes into an appraisal report click here: Sample Appraisal Report
Once the appraisal has been completed, what guarantee is there that the final number is veritable? (Go to list of questions)
In the documentation of an appraisal, each appraiser must ensure the following:
- The appraisal contained an apropos analysis of the information.
- That grave errors of omission or commission were not committed individually or collectively.
- That appraisal services were provided in a careful and conscientious fashion.
- The final appraisal report was easy to explain, sound and conclusive.
To become a state licensed appraiser, we must meet considerable education and experience requirements that train us to formulate an unbiased opinion.
Plus, appraisers must obey a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).
(Go to list of questions)
Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. However, licensing and certification is most often associated with many hours of classroom study, tests and practical experience.
Once 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 employs appraisers? (Go to list of questions)
Mortgage lenders are an appraiser's typical customer, needing their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan.
Attorneys and CPAs also hire appraisers for divorce and estate settlements.
Where does Professional Appraisal Services, L.L.C. (262)914-5626 get the information used to estimate values in Kenosha County or other areas? (Go to list of questions)
Gathering data is one of the primary occupations of an appraiser.
Data can be described as either 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 gathered from a numerous places.
Local Multiple Listing Services (MLS) have information on recently sold homes that could be used as comparables.
To double-check actual sales prices, we use tax records and other public documents that are usually online nowadays.
Appraisers routinely have to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.
And last but not least, the appraiser assembles general data from his or her collective knowledge gained from doing assignments for other properties in the same market.
How can a licensed appraiser help me? (Go to list of questions)
An appraisal is a valuable tool whenever your home's value is relevant to a financial decision.
For those selling a home, you'll want to figure out 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.
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.
Simply put, a house 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? (Go to list of questions)
PMI is an acronym for Private Mortgage Insurance.
This additional policy takes care of the lender in case a borrower defaults on the loan and the market price of the house is lower than the loan balance.
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.
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Has your real estate appreciated since you first purchased? Call Professional Appraisal Services, L.L.C. (262)914-5626 today at 262-914-5626. You may be able to save money by removing your Private Mortgage Insurance premium.
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Do you need anything from me in advance? (Go to list of questions)
We begin with an inspection of the property.
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.
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 bushes and relocate any items that would make it difficult to measure the structure. Indoors, make sure we can easily access appliances like furnaces and water heaters.
You can make our visit go faster and improve the accuracy of the appraisal report by having the following things on hand:
- Written property agreements, such as a maintenance easement for a shared driveway.
- List of personal property to be sold with the home.
- Information on "Homeowners Associations" or condominium covenants and fees.
- Brag sheet that lists 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).
- A list of "suggested" improvements if the property is to be appraised "as complete".
What is "Market Value?" (Go to list of questions)
In real estate appraising, 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."
Does the appraisal belong to the bank or the consumer? (Go to list of questions)
In most real estate transactions, the appraisal is ordered by the lender.
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 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's different when it's the homeowner engaging the appraiser for things outside securing a mortgage.
In these cases, the appraiser may state how the appraisal can be used; 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.
How can I get the most ROI out of home improvements? (Go to list of questions)
A home's location - what city it is in and even what part of that city - is key to this popular question.
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 move.
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 weren't far behind, returning 85%.
On the contrary, work that may not add value would be painting just for the sake of redecorating.
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