Appraisal Options has answers to "Frequently Asked Questions"


	Appraisal Options is ready to elaborate on any concerns you might have about appraisals or real estate in Auburn and Placer County. Don't hesitate to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
What would cause me to require services from Appraisal Options?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
After completing the report, what guarantee is there that the final number is trustworthy?
What goes into an appraiser's certification?
Who are an appraiser's customers?
Where does Appraisal Options get the information used to estimate values in Placer County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What is "Market Value?"
Who actually owns the appraisal report?
Are some home improvements more worthwhile than others?

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

The appraisal process is an evaluation that produces an opinion of value. There are three "common approaches to value" which helps the appraiser come to this opinion or estimate. The Cost Approach is one of the methods that appraisers use to find the value of a house; it involves discerning what the improvements would cost minus physical deterioration, adding the land value. The Sales Comparison Approach deals with finding similar homes in close proximity and discerning value based on comparing those houses to the property being investigated. Generally speaking, the Sales Comparison Approach is the most accurate indicator of market value of a house. One of the least common approaches in appraising homes is the Income Approach, which is mainly used to find the value of a property based on what an investor would pay based on the income produced by the building.

Describe what an appraiser does (See list of FAQ's)

An appraiser offers a professional, unbiased opinion of market value, in the support of real estate exchanges. Appraisers exhibit their conclusions in appraisal reports.

What would cause me to require services from Appraisal Options? (See list of FAQ's)

There are many reasons to purchase an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for getting an appraisal include:

To obtain a loan.
To lower your tax burden.
To build a case for a homeowner's equity and remove insurance.
To fight high property taxes.
If you need to take care of an estate.
To provide you a leg-up when purchasing a home.
To figure out a likely price when putting your home on the market.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Because an official agency such as the IRS requires it.
It's possible you could have to deal with being in a lawsuit - an appraisal will help.

For a more extensive explanation of the appraisal process click here.

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

Home inspectors do not come to an opinion of value and do not use the same forms as appraisers. The purpose of a home inspection is to evaluate the structure of the property from basement to rooftop. The standard house inspector's report will include an evaluation of the condition of the house's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

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

Honestly, they have nothing in common. What the CMA depends on are vague trends. An appraisal relies on comparable sales that can be proven by records. The appraisal report will also contain neighborhood and construction values. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

The person behind the report is actually the most significant difference between a CMA and an appraisal. 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. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a previously agreed upon fee for work they perform, regardless of their outcome.

What's in an appraisal report? (See list of FAQ's)

Each appraisal should reflect a supported estimate of value and will identify the following:

Who engaged the appraiser and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The appraisal's purpose.
The type of value reported and a definition of the value reported.
The effective date of the value opinion.(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 characteristics, legal attributes, economic factors, the property rights in question, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible factors.
Any 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 involved in the process of completing the job.

For a more detailed view of the work that goes into an appraisal report click here: Sample Appraisal Report

After completing the report, what guarantee is there that the final number is trustworthy? (See list of FAQ's)

In communicating an appraisal report, each appraiser must make sure of the following:

The appraisal used an appropriate analysis of the information.

Whether individually or collectively, there were no critical errors contained in the appraisal, nor any relevant details left out.

That appraisal services were provided in a careful and judicious fashion.

That a trustworthy, defensible appraisal report was imparted.

To become a state licensed appraiser, there are strenuous education requirements as well as practical experience that must be logged. Likewise, appraisers must stick to a strict industry code of ethics and respect national standards of practice for real estate appraisal. The rules for developing an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's) Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. However, licensing and certification typically translates to many hours of coursework, tests and real world experience. Once licensed, he or she is required to complete continuing education courses so the license remains current. To see the specific requirements for any state click here.

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

Mortgage lenders are an appraiser's typical customer, needing their services to ensure property involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does Appraisal Options get the information used to estimate values in Placer County or other areas? (See list of FAQ's)

Collecting data is one of the primary things an appraiser engages in. Data can be described as either Specific or General. Specific data is taken 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 sources. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood system.

And last but not least, the appraiser assembles general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.

Why do I need a professional appraisal? (See list of FAQ's)

An appraisal is a valuable tool anytime your home's value is relevant to some financial decision. If you're selling your house, an appraisal assists you in setting the most appropriate price. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from Appraisal Options is the best documentation to ensure assets are divided evenly. A home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making informed financial decisions.

What exactly is PMI and how can I get rid of it? (See list of FAQ's)

PMI is an acronym for Private Mortgage Insurance. This additional plan protects the lender in case a borrower is unable to pay on the loan and the market price of the house is lower 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.


	Did you have less than 20% to put down on your mortgage? Call Appraisal Options today at 5302691569. You may be able to save money by removing your Private Mortgage Insurance premium.

How do I get ready for the appraiser? (See list of FAQ's)

The first step in most appraisals is the property 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 amenities. On the home's interior, make sure it is clutter free and that we can access 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.

To help speed things along as well as ensure a more accurate report, attempt if possible to have the following items:

Any information on the purchase of the property for the last three years.
List of personal property to be sold with the home.
Home 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 central air conditioning or roof repairs) and permit confirmation (if available).
Most recent real estate tax bill and or 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."

Who actually owns the appraisal report? (See list of FAQ's)

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 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 engaging the appraiser for things outside securing a mortgage. In these cases, the appraiser may stipulate how the appraisal can be used; 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)

The answer to this is different depending upon the location of the home. 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 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 are right up there with kitchens, yielding 85%. Adding bedrooms and baths can also help the value of your home (when done well) as long as your home doesn't then become atypical for your neighborhood in terms of size.