Appraisal And You has answers to "Frequently Asked Questions"


	Appraisal And You is eager to address any questions you might have about appraisals in Merced and Merced County. Don't hesitate to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
What would cause me to request services from Appraisal And You?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
After completing the appraisal, what guarantee is there that the value conclusion is veritable?
How are appraisers certified?
Who engages the services of appraisers?
Where does an appraiser get the information used to estimate values in Merced County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
How does an appraiser define "Market Value"?
Who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?

Define the term "Appraisal" (Go to list of questions)

An appraisal report is an evaluation that concludes with an opinion of value. This opinion or estimate is figured by a formal method that usually utilizes three "common approaches to value". The Cost Approach is one of the processes that real estate appraisers use to find the value of a home; it involves discerning what the improvements would cost without physical depreciation, plus the land value. Easily the most common approach in figuring the likely sales price of a home is the Sales Comparison Approach which concerns concluding a comparison to comparable properties nearby. The Sales Comparison Approach is commonly the most accurate and clearest indicator of value for a residential property. 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 income a property produce.

Describe what an appraiser does (Go to list of questions)

An appraiser provides a professional, unbiased determination of market value, in the support of real estate exchanges. Appraisers document their expert investigation in appraisal reports.

What would cause me to request services from Appraisal And You? (Go to list of questions)

There are many reasons to get an appraisal from Appraisal And You with the most common reason being real estate and mortgage transactions. A few other reasons for getting an report include:

If you are applying for a loan.
If you would like to reduce your property tax obligations.
To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
To fight high property taxes.
If you need to take care of an estate.
To offer you a leg-up when purchasing a home.
To figure out a reasonable sales price when listing your home.
To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
Government agencies such as the IRS require an appraisal on every property.
It's possible you could be involved in a lawsuit - an appraisal will help.

If you need more information about the appraisal process, please click here.

Is an appraisal the same as a home inspection? (Go to list of questions)

Appraisers do not do complete home inspections and are not home inspectors. An inspection is a third-party evaluation of the livable structure and mechanical systems of a property, from the top to the foundation. Commonly, a home inspection report will discuss the amenities and the requirements of the house: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

Is an appraisal the same as a comparative market analysis(CMA)? (Go to list of questions)

Frankly, it's night and day. The CMA relies on vague local market trends. Appraisals use similar sales which are valid resources. Location and architectural costs are also important in an appraisal. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

The credentials of the person creating the report is actually the biggest difference between a CMA and an appraisal. 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, California licensed professional who bases a career on valuing homes in and around Merced County creates the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat fee for assignments, regardless of their outcome.

What are the contents of an appraisal report? (Go to list of questions)

Each report should indicate a credible estimate of value and should document the following:

The client and whose purposes the appraisal is to serve.
The intended use of the report.
The reason for the assignment.
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!)
Characteristics of the property that have a bearing on the value, 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, trade fixtures and even intangible considerations.
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 involved in the activity of completing the job.

For a more comprehensive view of what goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, what guarantee is there that the value conclusion is veritable? (Go to list of questions)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:

The appraisal contained an appropriate analysis of the data.

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

That appraisal services were rendered in a careful and cognizant manner.

That a trustworthy, defensible appraisal report was imparted.

To become a state licensed appraiser, there are intense education requirements as well as experience that must be attained. In addition, appraisers must obey a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for developing an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Go to list of questions)

Licensing and certification is achieved through coursework, tests and experience working under a supervisory appraiser. Once an appraiser is licensed, he or she is required to engage in continuing education courses so the license remains up to date. To see the specific requirements for any state click here.

Who engages the services of appraisers? (Go to list of questions)

Mortgage lenders are an appraiser's typical customer, using their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does an appraiser get the information used to estimate values in Merced County or other areas? (Go to list of questions)

Compiling information is one of the primary occupations of an appraiser. Data can be described as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.

General data is gathered from a number of places. To find out about recently sold homes to be used as "comps", we typically go to the local Multiple Listing Service. Tax records and other courthouse documents verify actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood service.

And most importantly, the appraiser gathers general data from his or her collective knowledge gained from doing assignments for other properties in the same market.

Why should I hire a licensed appraiser? (Go to list of questions)

If you're involved in some sort of financial decision and the value of your home is relevant, you'll want an appraisal. For those selling a home, you'll want to determine the 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. 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. Knowing its true value means you can make the right financial decisions.

What exactly is PMI and how can I get rid of it? (Go to list of questions)

PMI stands for Private Mortgage Insurance. This supplemental plan guards the lender in the event a borrower doesn't pay on the loan and the market price of the house is less than what the borrower still owes on 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.


	Has your home value appreciated since you first purchased? Contact Appraisal And You today at 209-722-6283 to see if you can save money by removing your Private Mortgage Insurance payment.

How do I get ready for the appraiser? (Go to list of questions)

We begin with an inspection of the home. 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 status of its amenities. On the home's interior, make sure it is clutter free and that we can find our way to things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of outside walls.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:

Any information on the purchase of the property for the last three years.
A list of any personal property that will be left behind and sold with the home, such as a oven, or a washer and dryer, if applicable.
A bill for your most recent real estate taxes which should also contain a legal description of the property.
Brag sheet that lists 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).
Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .

How does an appraiser define "Market Value"? (Go to list of questions)

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? (Go to list of questions)

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 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 hires an appraiser directly. In these cases, the appraiser may define how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.

I want to get more for my house. Where should I spend money renovating? (Go to list of questions)

This really depends on where the home is. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.

As a rule, the most value returned from renovating a home comes in the kitchen. 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 are right up there with kitchens, returning 85%. On the contrary, work that may not add value would be painting just for the sake of redecorating.