Phillip W. Van Vonderen has answers to "Frequently Asked Questions"


	Phillip W. Van Vonderen is always prepared to reply to any questions you might have about appraisals or real estate in both the state of Arizona and Wisconsin. Don't hesitate to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
What are the reasons a person would request a real estate appraisal?
Is an appraisal the same as a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
After completing the appraisal, how can I have a guarantee that the value indicated is accurate?
What does it mean for an appraiser to be licensed?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in Brown 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?
Define "Market Value"
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?

Define the term "Appraisal" (Top)

The method of creating an appraisal report deals with an estimation which forms an opinion of value. There are three "common approaches to value" which assists the real estate appraiser conclude this opinion or estimate. One of the methods is the Cost Approach - which is how much it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. Another of the approaches is the Sales Comparison Approach - which concerns finding a comparison to other similar properties within a close proximity which have recently sold. Being the most common approach, the Sales Comparison Approach is generally the most precise and best indicator of market value for a residential property. The Income Approach is mainly used for finding 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 (Top)

An appraiser provides a professional, unbiased determination of market value, to be used in making real estate transactions. Appraisers summarize their conclusions in appraisal reports.

What are the reasons a person would request a real estate appraisal? (Top)

There are many reasons to obtain an appraisal from Straightline Appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for obtaining an appraisal report include:

If you are applying for a loan.
To reduce your tax burden.
To demonstrate a homeowner's acquired equity and remove PMI.
To contest high property taxes.
If you need to take care of an estate.
To offer you a negotiating tool when purchasing real estate.
To determine a likely price when selling real estate.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Government agencies such as the IRS need an appraisal on every property.
If you ever find yourself in a lawsuit.

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

Is an appraisal the same as a home inspection? (Top)

Appraisers do not do provide home inspections and are not home inspectors. The point of a home inspection is to evaluate the structure of the property from basement to top. Usually, a home inspection report will discuss the amenities and the necessities 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.

What is the difference between an appraisal and a comparative market analysis (CMA)? (Top)

Frankly, it's like comparing Shakespeare to reality TV. The CMA depends on indefinite local market trends. Appraisals use comparable sales which are verifiable resources. Location 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 biggest difference is the person doing the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA. A certified, licensed professional who has formed a career on valuing properties in and around their market area is behind the appraisal. Likewise, the agent has something at stake since they get a commission based on the property selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a previously agreed upon sum for work they perform, regardless of their outcome.

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

The main point 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, one will customarily see the following:

The client and other intended users.
The intended use of the appraisal.
The appraisal purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraisal.
Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible considerations.
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 assignment.

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

After completing the appraisal, how can I have a guarantee that the value indicated is accurate? (Top)

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

That the information analysis contained in the appraisal was proper.

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

That appraisal services were delivered in a careful and conscientious fashion.

That a solid, defensible appraisal report was conferred.

To become a state licensed appraiser, there are education requirements as well as on the job experience that must be logged. In addition, appraisers must follow a strict industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for working up an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Top) Licensing and certification is achieved through coursework, tests and practical experience. Once an appraiser is licensed, he/she must then engage in continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who are an appraiser's customers? (Top)

Commonly, appraisers are called upon by mortgage lenders to estimate the value of property involved in a loan transaction - to make sure the real estate is truly adequate collateral for the 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 Maricopa County, Pinal County or other areas? (Top)

One of the main tasks an appraiser performs is to collect property data. Data can be split into Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.

General data is collected from a many places. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. To double-check actual sales prices, we look at items in the assessor's office and other public documents. Appraisers routinely have to report when a property lies in a flood zone, so that information is retrieved from a FEMA data outlet such as Ala Mode InterFlood service.

And most importantly, the appraiser gathers 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 involved in any kind of financial decision and the value of your home is relevant, you'll want a full 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. 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. A home is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.

What exactly is PMI and how can I get rid of it? (Top)

PMI is an acronym for Private Mortgage Insurance. This supplemental policy covers the lender in case a borrower defaults on the loan and the value of the property is lower than what the borrower still owes on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Did you have less than 20% to put down on your mortgage? Contact Straightline Appraisal today at (920) 606-9745. You may be able to get rid of your Private Mortgage Insurance premium.

How do I get ready for the appraiser? (Top)

We start 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 status of its features. Inside, 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 exterior 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.
Title policy that lists encroachments or easements.
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 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".

Define "Market Value" (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)

For mortgage transactions, the lender requests 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 appraisal - it is usually included with all the other closing documents - but is not entitled 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 scenarios, 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 do whatever they want with the appraisal.

Are some home improvements more worthwhile than others? (Top)

A home location - what city it is in and even what part of that city - is key to this popular question. For example, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!

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 weren't far behind, returning 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.