Spillane Appraisal Services,P.C. has answers to "Frequently Asked Questions"


	Spillane Appraisal Services,P.C. is always eager to address any questions you might have about appraisals or real estate in St. Albans and Franklin County. Feel free to contact us today.

What is an appraisal?
Describe what an appraiser does
What are the reasons someone would request your services?
What is the difference between an appraisal and a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
Once the appraisal is done, what assurance is there that the final number is legitimate?
How are appraisers certified?
Who hires an appraiser?
Where does Spillane Appraisal Services,P.C. get the data used to estimate values in Franklin County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Do you need anything from the homeowner in advance?
Define "Market Value"
Does the appraisal belong to the bank or the consumer?
Which home renovations add the most to the price?

What is an appraisal? (Go to list of questions)

The process of writing an appraisal report deals with an inspection which leads to an opinion of value. The appraiser must use a few "approaches," typically three, to draw up the estimation of market value. One of the three is the Cost Approach - which is what it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. The Sales Comparison Approach involves finding comparable houses in the vicinity and figuring out the value based on comparing those prior sales to the home in question. Being the most commonly used approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a house. The Income Approach is generally used for figuring out 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 (Go to list of questions)

An appraiser offers a fair and credible determination of market value, in the support of real property transactions. Appraisers document their expert investigation in appraisal reports.

What are the reasons someone would request your services? (Go to list of questions)

There are many reasons to get an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for purchasing an appraisal report include:

If you are applying for a loan.
If you would like to lower your property tax burden.
To demonstrate a homeowner's acquired equity and remove PMI.
To fight inflated property taxes.
If you need to take care of an estate.
To give you a leg-up when purchasing a home.
To determine a likely property value when putting your home on the market.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Because an official agency such as the IRS requires it.
If you are ever involved in a civil case.

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

What is the difference between an appraisal and a home inspection? (Go to list of questions)

The appraiser is not a home inspector nor does he/she do a full home inspection. The point of a home inspection is to evaluate the structure of the property from foundation to top. Commonly, a home inspection report will explain the amenities and the necessities of the home: air conditioning (weather permitting), electrical functions, 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)? (Go to list of questions)

Honestly, they have nothing in common. The CMA depends on vague trends in the market. Appraisals use similar sales which are valid resources. Location and construction costs are also precedent in an appraisal. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

The person behind the report is actually the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, generate CMA's. A certified, state licensed professional who bases a career on valuing homes in and around Franklin County is behind the appraisal. Further, the appraiser is an independent party, with no conditional interest in the value conclusion, unlike the real estate agent, who gets a commission based upon the value of the home.

What can I expect to see in my appraisal report? (Go to list of questions)

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:

Who engaged the appraiser and other intended users.
How the appraisal is supposed to be used.
The reason for the assignment.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the value opinion.(Sometimes this is in the past or maybe the future for new construction!)
Relevant property attributes, including: location, physical description, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible factors.
Any 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 involved in the process of completing the appraisal.

For a more in depth look at what goes into an appraisal report click here: Sample Appraisal Report

Once the appraisal is done, what assurance is there that the final number is legitimate? (Go to list of questions)

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

The appraisal contained an appropriate analysis of the data.

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

That appraisal services were done in a careful and judicious manner.

That a solid, supportable appraisal report was communicated.

To become a state licensed appraiser, there are strenuous education requirements as well as experience that must be attained. In addition, appraisers must abide by a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for developing an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Go to list of questions) Licensing and certification takes classroom study, tests and real world experience. Once an appraiser is licensed, he/she is required to engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who hires an appraiser? (Go to list of questions)

Mortgage lenders are an appraiser's most likely customer, using their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does Spillane Appraisal Services,P.C. get the data used to estimate values in Franklin County or other areas? (Go to list of questions)

Gathering information is one of the primary things an appraiser engages in. Data can be classified as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser while on site.

General data is collected from a variety of places. To find out about recently sold homes to be used as "comps", an appraiser will often go to the local Multiple Listing Service. To double-check actual sales prices, we use tax records and other public documents that are usually online nowadays. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood system.

And most importantly, the appraiser assembles general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.

Why do I need a professional appraisal? (Go to list of questions)

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 will help you determine a price that maximizes profit and reduces time on the market. When buying, be sure you're not overpaying by getting an independent appraisal. For parties settling an estate or divorce, an appraisal from Spillane Appraisal Services,P.C. is the best way to ensure assets are divided fairly. A house 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? (Go to list of questions)

PMI is the common abbreviation for for Private Mortgage Insurance. This supplementary plan protects the lender in case a borrower defaults on the loan and the value of the house is lower than what is owed on 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.


	Does your monthly loan payment have a lineitem for PMI?Call Spillane Appraisal Services,P.C. today at 8025247104 or send us an e-mail. Documentation of your home's present value could save you thousands.

Do you need anything from the homeowner in advance? (Go to list of questions)

The first step in most appraisals is the home inspection. 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 condition of its amenities. Inside, make sure it is clutter free and that we can find our way to things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of outside walls.

You can make our visit go faster and improve the accuracy of the appraisal report by having the following things on hand:

A survey or plot map of the property and building (if readily available).
Information on any written private agreements, such as a shared driveway with a neighbor.
Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
A list of any major home improvements and upgrades, 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).
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

Define "Market Value" (Go to list of questions)

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."

Does the appraisal belong to the bank or the consumer? (Go to list of questions)

For mortgage transactions, the lender requests the appraisal, either directly or through a third party. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is certainly entitled to a copy of the appraisal - it's usually included with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner engages an appraiser directly. In these scenarios, 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 use the appraisal for any purpose.

Which home renovations add the most to the price? (Go to list of questions)

It really depends on the market. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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, 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 an oddball for your neighborhood in terms of size.