Evans Appraisal Service has answers to "Frequently Asked Questions"


	Evans Appraisal Service is prepared to address any questions you might have about appraisals or real estate in Clarks Summit and Lackawanna County. Don't hesitate to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
What would cause me to require a real estate appraisal?
What is the difference between an appraisal and a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
After completing the report, how can I have assurance that the value conclusion is accurate?
How are appraisers certified?
Who do appraisers work for?
Where does an appraiser get the data used to estimate values in Lackawanna County or other areas?
What can a full appraisal do for me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Do you need anything from me in advance?
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 method of creating an appraisal deals with an inspection which leads to an opinion of value. This opinion or estimate is concluded through the use of a formal method that usually utilizes the three main "common approaches to value". The Cost Approach is one of the processes that real estate appraisers use to find the value of a house; it involves figuring what the improvements would cost less physical depreciation, plus the land value. The Sales Comparison Approach deals with searching for similar properties in close proximity and figuring out the value based on comparing those houses to the home being investigated. Usually, the Sales Comparison Approach is the most definite indicator of market value of a house. The third approach is the Income Approach, which is the best method in appraising income producing properties - it involves estimating what an investor would pay based on the money produced by the property.

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

An appraiser offers a professional, unbiased determination of market value, often in the context of a real estate exchange. Appraisers reveal the details of their expert investigation in appraisal reports.

What would cause me to require a real estate appraisal? (See list of FAQ's)

There are a lot of reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for ordering an appraisal include:

To get a loan.
If you would like to reduce your property tax burden.
To show a homeowner has 30% equity and remove insurance.
To challenge inflated property taxes.
To settle an estate.
To give you an edge when purchasing real estate.
To determine the most probable price when selling your home.
To ensure parties are provided just compensation in eminient domain cases.
Because a government agency such as the IRS requires it.
It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.

Click here for a more extensive explanation of the process about getting an appraisal.

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 are not appraisers. An inspection is a third-party investigation of the available structure and mechanical systems of a house, from the top to the foundation. The stereotypical house inspector's report will contain an evaluation of the condition of the house's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

What is the difference between an appraisal and a comparative market analysis (CMA)? (See list of FAQ's)

Honestly, they share nothing in common. The CMA uses market trends to conduct most of their business. Appraisals use similar sales which are valid resources. Area and architectural costs are also a priority in an appraisal. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the most significant factor is who's doing the report. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. 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 collect only a flat fee for assignments, regardless of their outcome.

What can I expect to see in my appraisal report? (See list of FAQ's)

The main point of an appraisal report is to provide a value opinion, and depending on the scope of the report, you'll usually see the following:

Who engaged the appraiser and other intended users.
The intended use of the appraisal.
The purpose of the assignment.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the value opinion.
Relevant property characteristics, including: location, physical description, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible considerations.
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 included in the activity of completing the assignment.

For a more comprehensive look at all that goes into an appraisal report click here: Sample Appraisal Report

After completing the report, how can I have assurance that the value conclusion is accurate? (See list of FAQ's)

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

The appraisal used a suitable analysis of the data.

Whether individually or collectively, there were no crucial errors contained in the report, nor any material details left out.

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

That a trustworthy, substantiated appraisal report was conferred.

To become a state licensed appraiser, there are education requirements as well as on the jobexperience that must be logged - all with the objective of being able to render unbiased value opinions. Plus, appraisers must obey a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for working up an appraisal and reporting 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 are different from state to state. In general, licensing and certification typically translates to many hours of classroom study, tests and experience working under a supervisor. Once an appraiser is licensed, he or she is required to engage in continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who do appraisers work for? (See list of FAQ's)

Commonly, appraisers are hired by mortgage lenders to estimate the value of a home involved in a loan transaction - to make sure the real estate is truly adequate collateral for the loan. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does an appraiser get the data used to estimate values in Lackawanna County or other areas? (See list of FAQ's)

Collecting information is one of the primary things an appraiser engages in. Data can be classified as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.

General data is collected from a variety of places. To look up recently sold homes to be used as "comps", we often go to the local Multiple Listing Service. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood product.

And last but not least, the appraiser gathers general data from his or her past experience in doing assignments for other properties in the same market.

What can a full appraisal do for me? (See list of FAQ's)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. For those selling a home, you'll want to determine the price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. When buying, you can avoid overpaying by commissioning an independent appraisal. For parties settling an estate or divorce, an appraisal from Evans Appraisal Service is the best way to ensure assets are split up evenly. 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? (See list of FAQ's)

PMI stands for Private Mortgage Insurance. This added plan covers the lender in case a borrower doesn't pay on the loan and the value of the property is lower than the balance of 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.


	The amount you keep from dropping the PMI required when you got your mortgage will make up for the cost of the appraisal in no time. Evans Appraisal Service stays current with real estate value trends in Clarks Summit and Lackawanna County. Contact us today.

Do you need anything from me in advance? (See list of FAQ's)

We begin with an inspection of the property. 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. 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 (gates aren't locked, etc). Trim any landscaping and move any items that would make it difficult to measure the structure. Indoors, make sure the appraiser can easily access items like furnaces and water heaters.

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

Information on the latest purchase of the property in the last three years.
Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
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 amount of their purchase and date of their installation (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
A list of "suggested" improvements when the property is being appraised "as complete".

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)

For mortgage transactions, the lender requests the appraisal, either directly or through a third party. 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.

The exception to this rule is when a home owner engages an appraiser directly. In these situations, the appraiser may stipulate 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 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, 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. 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, returning 85%. Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.