Certified Appraisals, LLC has answers to "Frequently Asked Questions"


	Certified Appraisals, LLC is always willing to address any questions you might have about appraisals or real estate in Midlothian and Chesterfield County. Contact Certified Appraisals, LLC today to see how we can help you with your specific valuation problems.

Define the term "Appraisal"
Describe what an appraiser does
What are the reasons a person would request a real estate appraisal?
How is an appraiser different than a home inspector?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What's in an appraisal report?
After completing the appraisal, how can I have a guarantee that the value indicated is veritable?
What goes into an appraiser's certification?
Who are an appraiser's customers?
Where does Certified Appraisals, LLC get the information used to estimate values in Chesterfield County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
Does the appraiser need anything from me in advance?
Define "Market Value"
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?

Define the term "Appraisal" (List of questions)

An appraisal is an inspection allowing the appraiser to come to an opinion of value. There are three "common approaches to value" which helps the appraiser arrive at this opinion or valuation. One of the methods in use is the Cost Approach, which finds what it would cost to replace the improvements to the house, minus age and physical deterioration, plus the land value. The Sales Comparison Approach involves finding similar homes nearby and discerning value based on comparing those homes to the home in question. 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 residential properties is the Income Approach, which is mainly used to determine 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 (List of questions)

An appraiser produces an unbiased and well justified assessment of market value, in the support of real property exchanges. Appraisers demonstrate their professional analysis in appraisal reports.

What are the reasons a person would request a real estate appraisal? (List of questions)

There are many reasons to obtain an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for obtaining an report include:

If you are applying for a loan.
If you would like to reduce your property tax obligations.
To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
To challenge high property taxes.
To handle an estate.
To give you a negotiating tool when purchasing a home.
To determine a likely sales price when putting your home on the market.
To defend 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.
It's possible you could have to deal with being in a lawsuit - an appraisal will help.

Click here for a more detailed explanation of the process dealing with getting an appraisal.

How is an appraiser different than a home inspector? (List of questions)

Appraisers do not do perform house inspections and are not home inspectors. An inspection is a third-party investigation of the available structure and electrical and mechanical systems of a home, from the top to the bottom. The standard house inspector's report will contain an evaluation of the integrity of the property'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)? (List of questions)

To be blunt, it's like comparing Shakespeare to reality TV. The CMA uses market trends to create most of their business. The appraisal relies on similar proven comparable sales. Also, the appraisal checks other factors like condition, neighborhood and replacement prices. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

Who's creating the report is hands down 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. The appraisal is produce 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 collect only a previously agreed upon fee for work they perform, regardless of their value conclusion.

What's in an appraisal report? (List of questions)

Every appraisal must reflect a supported value opinion and should document the following:

Who engaged the appraiser and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The purpose of the assignment.
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 description, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible items.
All 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 assignment.

For a more detailed look at 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 veritable? (List of questions)

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

The appraisal used an appropriate analysis of the information.

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

That appraisal services were not conducted in a careless or negligent fashion.

That a trustworthy, supportable appraisal report was communicated.

To become a state licensed appraiser, there are extensive education requirements as well as on the jobexperience that must be logged. Likewise, appraisers must follow a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(List of questions) Regulations regarding licensing and certification are different from state to state. However, licensing and certification is most often associated with many hours of coursework, tests and real world experience. Once an appraiser is licensed, he or 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? (List of questions)

Most of the time, appraisers are employed by lenders to estimate the value of property involved in a loan transaction - to make sure the property is indeed adequate collateral for the loan. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does Certified Appraisals, LLC get the information used to estimate values in Chesterfield County or other areas? (List of questions)

Collecting information is one of the main things an appraiser performs. Data can be split into Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is received from a many places. To look up recent sales to be used as "comps", we often go to the local Multiple Listing Service. To double-check actual sales prices, we look at items in the assessor's office and other public documents. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood system.

And last but not least, the appraiser assimilates general data from his or her past experience in creating appraisals for other properties in the same market.

Why do I need a professional appraisal? (List of questions)

An appraisal is a valuable tool anytime the value of your home is relevant to a financial decision. If you're selling your home, an appraisal helps you set a price that maximizes profit and reduces time on the market. When buying, be sure you're not overpaying by commissioning an independent appraisal. For people settling an estate or divorce, an appraisal from Certified Appraisals, LLC is the best way to ensure assets are divided evenly. Simply put, 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? (List of questions)

PMI stands for Private Mortgage Insurance. PMI takes care of the lender in case a borrower is unable to pay on the loan and the value of the home 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.


	The savings from dropping your PMI will make up for the cost of the appraisal in a matter of months. Certified Appraisals, LLC is a name you can trust when it comes to value trends in Midlothian and Chesterfield County. Contact us today.

Does the appraiser need anything from me in advance? (List of questions)

The first step in most appraisals is the property inspection. During this process, we will come to your home and measure it, determine the layout of the rooms inside, confirm all aspects of the home's general condition, and take several photos of your house for inclusion in the report. On the home's interior, make sure it is clutter free and that we can get to 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.

To help expedite our work as well as ensure a more accurate report, try if possible to have the following items:

A survey or plot map of the property and building (if available).
A list of any personal property that is part of the home and you intend to be sold with the home, such as a oven, or a washer and dryer, if applicable.
Most recent real estate tax bill and or legal description of the property.
A list of any major home improvements and enhancements, 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).
Locate copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.

Define "Market Value" (List of questions)

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? (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 entitled to a copy of the appraisal - it's 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 cases, the appraiser may define the purpose of the appraisal; 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.

How can I get the most ROI out of home improvements? (List of questions)

Like all things real estate, this is dependent on a home's location. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

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, yielding 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.