Frequently Asked Questions

Should I have an appraisal done before purchasing or selling a home?

What is the purpose and function of the appraisal?

What is the definition of market value?

How does the appraiser arrive at his/her opinion of market value?

Does the appraiser know the value of my home immediately after he/she inspected my home?

Can I get a copy of my appraisal directly from the appraiser?

If I pay for the appraisal directly to the appraiser or the appraisal company, may I receive a copy of the appraisal from the appraisal company?

If I disagree with the appraised opinion of market value, what should I do?

Are appraisers licensed and governed by the state or federal government?

Is the appraiser qualified to perform a home or building inspection?

What is involved in the appraisal process?

12 Most Common FHA Repairs

Should I have an appraisal done before purchasing or selling a home?

An appraisal will provide you with an objective opinion and help you to determine the Fair Market Value on the home you are considering to purchase or sell. The fee of a high quality appraisal report will be a small investment in the confidence that you will receive about your purchase agreement.

Lenders will require an appraisal to determine the value of the property that is being sold. You can relieve some of the stress of selling or buying a home by having an appraisal done before the sale. As a seller, an appraisal will assist in the marketing of your home to prospective buyers.

What is the purpose and function of the appraisal?

The sole purpose of the appraisal is to form an opinion of the market value of the property. For mortgage loan purposes, the function of the appraisal is to assist your lender in evaluating the subject property as collateral for your mortgage loan.  An appraisal can also be used for state purposes, tax reasons, or simply to know the value of your home.

What is the definition of market value?

Market value is the most probable price a property brings in a competitive and open market under all conditions requisite to a fair sale. A fair sale occurs when the price is not affected by undue stimulus and when both the buyer and seller act prudently and knowledgeably.

How does the appraiser arrive at his/her opinion of market value?

The appraisal is based on information gathered by the appraiser from public records, inter-office data, inspection of the subject property and neighborhood, and selection of comparables within the subject's market area. The appraiser is required to select a minimum of three recent closed sales similar to the subject in regards to style, location, square footage and physical amenities. The appraiser then makes a dollar adjustment either negatively or positively when appropriate to reflect the market reaction to those items of significant variation. Remember, the dollar cost of an individual amenity of additional feature does not always reflect the contributing value of that item.

Does the appraiser know the value of my home immediately after he/she inspected my home?

No! The inspection process is a valuable asset in determining the appraised value of your property. However, it is only a small percentage of the appraisal process. The appraiser usually has 3-4 more hours of work in the office either prior to or after the inspection is completed.

Can I get a copy of my appraisal directly from the appraiser?

Yes and no - Here is how and why: Lenders are required by federal law (the Equal Credit "Opportunity Act) to furnish a copy of the appraisal to the borrower if the borrower requests a copy in writing. This applies to both consumer and business loans for which real estate will be collateral. If the homeowner wants a copy of the appraisal, they should contact the lender directly.

If I pay for the appraisal directly to the appraiser or the appraisal company, may I receive a copy of the appraisal from the appraisal company?

For mortgage purposes the determining factor is NOT who pays for the appraisal or how it is paid, but who contacted the appraiser in the first place and placed the appraisal order. For a federally related transaction, federal law requires the lender to be the one to engage the appraiser's service. In many, if not most cases, the homeowner pays for the appraisal either directly to the appraiser or indirectly through the lender, thus payment for services is not the determining factor.  Of course if you order an appraisal for personal use you will receive the copies of the appraisal.

If I disagree with the appraised opinion of market value, what should I do?

For mortgage loan purposes the best way to handle this is to contact your loan officer or mortgage banker and explain to him/her why you disagree. If you have some additional sales data you think the appraiser should have utilized or considered, feel free to submit them for review. The appraiser should be more than happy to review your data. Remember, this is an opinion of market value for mortgage loan purpose, based on historical current sales data of comparable homes within your neighborhood and is not an exact science.  If this is a personal appraisal you will want to contact your appraiser.

Are appraisers licensed and governed by the state or federal government?

Yes, both the state and the federal government govern the appraiser. All appraisers are required to be licensed by the state. All appraisals for federally related transactions are required to conform with the Uniform Standards of Professional Appraisal Practice (USPAP).

Is the appraiser qualified to perform a home or building inspection?

The appraiser is not qualified as a building inspector, therefore, the appraisal does not warrant nor guarantee the condition of any structure, water, septic, or sewer system, electrical or plumbing system, existence and/or adequacy of insulation, or that the appraised property will pass any local or federal regulations or inspections. Furthermore, their reports do not guarantee in any way against present or future leakage, bursting, cracking, peeling, flooding, soil erosion, earthquake, abnormal water pressure, termites, noise or nuisance.

What is involved in the appraisal process?

First, we will do a careful physical inspection of your home. Don't worry about the kids, toys, unmade beds, vacuuming or other household disorder. We are looking at the structure, condition and features of your home. This is only the beginning of the appraisal process. The inspection usually lasts about 10-45 minutes depending on he complexity of your home.

Second,  you may see your appraiser driving up and down streets of your neighborhood. He/She will be evaluating the  neighborhood for homes that are similar to yours in location, size, design, number of rooms and extra features. We call these homes "Comps" or "Comparable Sales." Our appraiser makes dollar adjustments to reflect differences in "Comp" properties. Upgrades like fireplaces, air conditioners or home improvements add value to a property (usually not dollar for dollar, but will add value).

Finally, we are ready to prepare our report and submit it to your lender. At that time, your lender will be contacting you with the results. Keep in mind that the typical report requires extensive research and additional 6-8 combined hours by the appraiser and staff to complete the appraisal.

Our appraisers are friendly, courteous and interested in providing any information you may need. For mortgage loan purposes ethically, we have a client relationship with your lender, therefore communication must go through your lender. However, feel free to ask question while we are in your home. If this is a personal appraisal, our relationship is with you.

12 Most Common FHA Repairs

These conditions are listed to help you understand and erase any worries you may have about financing through HUD for your mortgage purposes.

The purpose of repair is to correct deficiencies which may affect the health and safety of the occupants or the continued marketability of the property. If possible, we suggest that you make any repairs to your home prior to the appraisal. This will improve the marketability and help the sale or refinance of your home go smoothly.

1. If the home was built prior to 1978, chipping, peeling paint must be scraped and painted. This includes interior, exterior, garages, sheds, fences etc.
2. Roof should have at least 2 years of useful life remaining and no more than 2 layers of shingles.
3. Broken or cracked windows must be replaced.
4. The cause of wet basements should be cured (i.e., improve drainage away from house, gutters, etc.)
5. Electric service must be 60 amp or greater. Electric certification may be required if 60 amp appears to be overloaded (i.e., homes larger than 1000 sq. feet with many major electrical appliances).
6. Abandoned inoperable wells must be capped and sealed by a licensed well sealing contractor.
7. Safety handrails should be installed in open stairwells or stairways with three of more steps.
8. Infestation of any kind should be exterminated (i.e., termite, carpenter ants, insects, mice, bats, etc.).
9. Damaged or inoperable plumbing, electric and heating systems should be repaired. The appraiser will check these areas.
10. Structural or foundation problems must be repaired.
11. If there is a crawl space, it will be the homeowner's responsibility to make this area accessible so that it can be thoroughly inspected.
12. The attic area must be accessible for the appraiser to inspect.

Keep in mind that these are the most common repairs. Contact your lender with specific questions regarding your property.