Appraisal One Source, Inc has answers to "Frequently Asked Questions"


	Appraisal One Source, Inc is always prepared to handle any questions you might have about appraisals in Holland and Bucks County. Don't hesitate to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
Why would someone require services from Appraisal One Source, Inc?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Once the report is done, what assurance is there that the final number is legitimate?
What are the requirements to be a certified appraiser?
Who hires an appraiser?
Where does an appraiser get the information used to estimate values in Bucks County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
What does "Market Value" mean?
Who has rights to the appraisal report?
Which home renovations add the most to the price?

Define the term "Appraisal" (Return to top)

An appraiser provides an estimation that produces an opinion of value. There are three "common approaches to value" which assists the real estate appraiser conclude this opinion or valuation. One of the processes is the Cost Approach - which is how much capital would be required to replace the improvements, less physical deterioration and other factors, plus the land value. The Sales Comparison Approach involves finding similar houses in the vicinity and finding value based on making a comparison of those houses to the home being appraised. 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 of most importance in appraising income producing properties - it involves estimating what an investor would pay based on the income generated by the property.

Describe what an appraiser does (Return to top)

An appraiser provides a professional, unbiased opinion of market value, often in the context of a real estate purchase. Appraisers present their expert investigation in appraisal reports.

Why would someone require services from Appraisal One Source, Inc? (Return to top)

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

If you are applying for a loan.
To lower your tax burden.
To show a homeowner has 30% equity and remove PMI.
To contest high property taxes.
If you need to settle an estate.
To provide you an edge when purchasing a home.
To find a likely price when selling real estate.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS need an appraisal on every home.
It's possible you could be involved in a lawsuit - an appraisal will help.

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

Is an appraisal the same as a home inspection? (Return to top)

The appraiser is not a home inspector and he or she does not do a comprehensive home inspection. The point of a home inspection is to evaluate the structure of the house from basement to attic. The archetypal property 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.

Is an appraisal the same as a comparative market analysis(CMA)? (Return to top)

Honestly, they share nothing in common. The CMA uses market trends to generate most of their business. Appraisals use similar sales which are verifiable resources. Area and construction values are also important 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 behind the report. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a flat sum for assignments, regardless of their value conclusion.

What are the contents of an appraisal report? (Return to top)

The main purpose 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, you'll usually see the following:

The client and other intended users.
The intended use of the report.
The reason for the appraisal.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the value opinion.
Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible factors.
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.
The scope of work considered while working up the assignment.

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

Once the report is done, what assurance is there that the final number is legitimate? (Return to top)

In communicating an appraisal report, each appraiser must ensure the following:

That the information analysis contained in the appraisal was suitable.

That crucial 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 solid, substantiated appraisal report was imparted.

To become a state licensed appraiser, we must satisfy considerable education and experience requirements that give us the background to formulate an unbiased opinion. Plus, appraisers must obey a strict industry code of ethics and observe national standards of practice for real estate appraisal. The rules for developing an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Return to top) Licensing and certification is achieved through classroom study, tests and experience working under a supervisor. Once an appraiser is licensed, he/she must then complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who hires an appraiser? (Return to top)

Most of the time, appraisers are hired by mortgage lenders to render a value opinion on a home involved in a loan transaction. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does an appraiser get the information used to estimate values in Bucks County or other areas? (Return to top)

Collecting information is one of the primary roles of an appraiser. Data can be categorized as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.

General data is received from a number of sources. Local Multiple Listing Services (MLS) provide information on recently sold homes that might be used as comparables. To double-check actual sales prices, we look at items in the assessor's office and other public documents that are usually online nowadays. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood product.

And most importantly, the appraiser assembles 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? (Return to top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. If you're selling your home, an appraisal helps you set the most appropriate price. When buying, you can avoid overpaying by getting an independent appraisal. For those settling an estate or divorce, an appraisal from Appraisal One Source, Inc is the best documentation to ensure assets are split up fairly. A home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

What exactly is PMI and how can I get rid of it? (Return to top)

PMI is an acronym for Private Mortgage Insurance. It protects the lender in the event a borrower doesn't pay on the loan and the market price of the home is lower 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.


	The money you keep from cancelling the PMI required when you got your mortgage pays for the appraisal in a matter of months. Nobody is more qualified than Appraisal One Source, Inc when it comes to analyzing real estate appreciation in Holland and Bucks County. Contact us today.

Should I do anything in advance of the appraisal inspection (Return to top)

We begin with an inspection of the home. 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. 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 . Trim any landscaping and move any items that would get in our way while we measure the structure. On the inside, 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:

Records 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.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
A list of "proposed" improvements if the property is to be appraised "as complete".

What does "Market Value" mean? (Return to 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? (Return to top)

In most real estate transactions, the appraisal is ordered by the lender. 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 included with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these situations, the appraiser may define how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can do whatever they want with the appraisal.

Which home renovations add the most to the price? (Return to top)

This really depends on where the home is. 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 weren't far behind, returning 85%. Adding bedrooms and baths can also increase the value of your home (when done well) as long as your home doesn't then become overbuilt for your neighborhood in terms of size.