Keller Appraisal has answers to "Frequently Asked Questions"


	Keller Appraisal is always happy to handle any concerns you might have about appraisals or real estate in Midlothian and Chesterfield County. Contact Keller Appraisal today to learn how we can help solve your valuation problems.

What is an appraisal?
What does an appraiser do?
Why would I request services from Keller Appraisal?
What is the difference between an appraisal and 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 report, how can I have confidence that the value conclusion is legitimate?
How hard is it to become certified?
Who are an appraiser's customers?
Where does Keller Appraisal get the data used to estimate values in Chesterfield County or other areas?
Why should I hire a licensed appraiser?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Does the appraiser need anything from the homeowner in advance?
What does "Market Value" mean?
Who has rights to the appraisal report?
I want to get more for my house. Where should I spend money renovating?

What is an appraisal? (Top)

The process of performing an appraisal deals with an inspection which forms an opinion of value. This opinion or estimate is concluded using a formal process that commonly utilizes the three main "common approaches to value". One of the three is the Cost Approach - which is how much capital would be required to replace the improvements, less physical deterioration and other factors, then adding the land value. Easily the most common approach in figuring the likely sales price of a home is the Sales Comparison Approach which concerns figuring a comparison to similar homes nearby. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a home. One of the least common approaches in appraising houses is the Income Approach, which is generally used to figure the market value of a property based on what an investor would pay based on the capital produced by the property.

What does an appraiser do? (Top)

An appraiser generates a professional, unbiased determination of market value, in the support of real estate transactions. Appraisers demonstrate their professional findings in appraisal reports.

Why would I request services from Keller Appraisal? (Top)

There are many reasons to order an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for purchasing an appraisal include:

To obtain a loan.
If you would like to lower your property tax obligations.
To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
To contest improperly assessed property taxes.
To settle an estate.
To give you an edge when purchasing real estate.
To find the most probable property value when listing your home.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Because a government agency such as the IRS requires it.
If you are ever involved in a civil case.

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

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

The appraiser is not a home inspector and does not do a full home inspection. An inspection is a third-party investigation of the accessible structure and appliances of a house, from the top to the foundation. Commonly, a home inspection report will discuss the amenities and the requirements of the property: air conditioning (weather permitting), electrical services, 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.

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

Frankly, it's like comparing broadband and dial-up. The CMA relies on vague local market trends. The appraisal is based on specific verifiable comparable sales. Location and architectural prices are also precedent in an appraisal. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the largest differentiator is who's doing the report. A CMA is written by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. 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 - their commission - whereas the appraiser is bound by a code of ethics to accept a previously agreed upon sum for assignments, regardless of their value conclusion.

What are the contents of an appraisal report? (Top)

The main point of an appraisal report is to give 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.
How the appraisal is supposed to be used.
The appraisal's purpose.
The type of value contained and a definition of the value reported.
The effective date of the appraisal.
Relevant property characteristics, 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, 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.
The scope of work considered while working up the assignment.

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

After completing the report, how can I have confidence that the value conclusion is legitimate? (Top)

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

That the information analysis contained in the appraisal was suitable.

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

That appraisal services were done in a careful and cognizant fashion.

The final appraisal report was easy to explain, credible and defensible.

To become a state licensed appraiser, we must meet considerable education and experience requirements that prepare us to produce an unbiased opinion. Likewise, appraisers must abide by a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for carrying out an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Top) Regulations regarding licensing and certification are different from state to state. In general, licensing and certification is most often associated with many hours of classroom study, tests and practical experience. Once an appraiser is licensed, he/she must then take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who are an appraiser's customers? (Top)

Mortgage lenders are an appraiser's typical customer, needing their services to ensure a home 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 Keller Appraisal get the data used to estimate values in Chesterfield County or other areas? (Top)

Collecting information is one of the primary tasks an appraiser engages in. 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 documented by the appraiser during an inspection.

General data is gathered from a numerous sources. To look up recent sales to be used as "comps", an appraiser will often go to the local Multiple Listing Service. Tax records and other public documents reveal 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 assimilates general data from his or her collective knowledge gained from doing assignments for other houses in the same market.

Why should I hire a licensed appraiser? (Top)

If you're making some sort of financial decision and the value of your home is relevant, you'll want to hire a licensed appraiser. If you're selling your house, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. 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. A house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

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

PMI is the common abbreviation for for Private Mortgage Insurance. This additional policy guards the lender if a borrower doesn't pay on the loan and the value of the home is less than what is owed on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Does your monthly mortgage payment have a lineitem for PMI?Call Keller Appraisal today at (804) 379-8926 or send us an e-mail. Documentation of your home's current value could save you thousands.

Does the appraiser need anything from the homeowner in advance? (Top)

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 features. The best thing you can do to help is make sure we have easy access to the exterior of the house . Trim any landscaping and relocate any items that would get in our way while we measure the structure. Indoors, make sure we can get to items like furnaces and water heaters.

You can make our visit go faster and improve the quality of the appraisal report by having the following things on hand:

Records on the latest purchase of the property in the last three years.
List of personal property to be sold with the building.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
A bill for your most recent real estate taxes which should also contain a legal description of the property.

What does "Market Value" mean? (Top)

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."

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 entitled to a copy of the appraisal - it's usually bundled with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner engages an appraiser directly. In these cases, 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 do whatever they want with the appraisal.

I want to get more for my house. Where should I spend money renovating? (Top)

This really depends on where the home is. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 are right up there with kitchens, yielding 85%. Adding bedrooms and baths can also help the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.