Adkins Appraisal Co. has answers to "Frequently Asked Questions"


	Adkins Appraisal Co. is prepared to elaborate on any concerns you might have about appraisals or real estate in Southwestern Ohio. Contact Adkins Appraisal Co. today to learn how we can help solve your valuation problems.

Describe an appraisal
What does an appraiser do?
What would cause me to request your services?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
After completing the appraisal, what guarantee is there that the value indicated is trustworthy?
What does it mean for an appraiser to be licensed?
Who engages the services of appraisers?
Where does an appraiser get the data used to estimate values in Hamilton County or other areas?
How can a licensed appraiser help me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
How do I get ready for the appraiser?
How does an appraiser define "Market Value"?
Once complete, who actually owns the appraisal report?
Are some home improvements more worthwhile than others?

Describe an appraisal (Top)

An appraisal is an evaluation allowing the appraiser to come to an opinion of value. The real estate appraiser will use a number of "approaches," typically three, to draw up the estimation of market value. The Cost Approach is one of the methods that real estate appraisers use to find the value of a home; it involves finding what the improvements would cost minus physical degradation, plus the land value. Another of the approaches is the Sales Comparison Approach - which concerns discovering a comparison to other similar nearby properties which have recently sold. The Sales Comparison Approach is commonly the most definitive and clearest indicator of a liklely sales price for a home. 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 money generated by the property.

What does an appraiser do? (Top)

An appraiser generates a professional, unbiased determination of market value, often in the context of a real estate purchase. Appraisers present their professional findings in appraisal reports.

What would cause me to request your services? (Top)

There are a lot of reasons to get an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for getting an appraisal include:

To get a loan.
To reduce your tax burden.
To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
To challenge inflated property taxes.
If you need to settle an estate.
To give you an edge when purchasing real estate.
To find an honest sales price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS require an appraisal on every home.
If you ever find yourself in a civil case.

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

How is an appraiser different than a home inspector? (Top)

The appraiser is not a home inspector and does not do a full home inspection. The point of a home inspection is to evaluate the structure of the house from bottom to attic. The archetypal home inspector's report will include an evaluation of the condition of the home'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)? (Top)

Frankly, it's like comparing broadband and dial-up. The CMA relies on indistinct local market trends. The appraisal is reliant on similar valid comparable sales. Location and building costs are also precedent in an appraisal. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the biggest difference is the person creating the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, create CMA's. 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 collect only a flat fee for work they perform, regardless of their value conclusion.

What's in an appraisal report? (Top)

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

The client and other intended users.
How the appraisal is supposed to be used.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible items.
Any 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 included in the process of completing the appraisal.

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

After completing the appraisal, what guarantee is there that the value indicated is trustworthy? (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 utilized in the appraisal was suitable.

That significant 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 credible, substantiated appraisal report was conferred.

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

(Top)

Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. In general, licensing and certification is commonly associated with many hours of classroom study, tests and real world experience. Once an appraiser is licensed, he or she is required to complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who engages the services of appraisers? (Top)

Commonly, appraisers are called upon by mortgage lenders to render a value opinion on real estate involved in a loan transaction. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does an appraiser get the data used to estimate values in Hamilton County or other areas? (Top)

Collecting data is one of the main tasks an appraiser performs. Data can be classified as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser while on site.

General data is received from a number of sources. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is available 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.

How can a licensed appraiser help me? (Top)

If you're making any kind of financial decision and the value of your home matters, you'll want an 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. 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. Simply put, a home 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 added plan covers the lender in case a borrower is unable to pay on the loan and the market price of the house is lower than the balance of the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.


	Has your home value appreciated since you first purchased? Contact Adkins Appraisal Co. today at (513) 583-0825. You may be able to save money by removing your Private Mortgage Insurance payment.

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

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. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house . Trim any shrubs and relocate any items that would get in our way while we measure the structure. On the inside, make sure the appraiser can get to 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:

A plot plan or survey of the house and land (if readily available).
List of personal property to be sold with the building.
Any documents, such as a title policy with information on encroachments or easements.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
A list of "suggested" improvements if the property is to be appraised "as complete".

How does an appraiser define "Market Value"? (Top)

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."

Once complete, who actually owns 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 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 scenarios, the appraiser may stipulate 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.

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

It really depends on the market. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

No matter where you go, however, properly renovating a kitchen is almost always a safe move. According to one national survey, kitchen remodels returned an average of 88% of the investment. In other words, a $10,000 kitchen remodeling project added approximately $8,800 to the value of the home. Bathrooms are right up there with kitchens, often 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.