LT Appraisal Services has answers to "Frequently Asked Questions"

LT Appraisal Services is willing to answer any questions you might have about appraisals in Burgettstown and Washington County. Feel free to contact us today.

What is an appraisal?
What does an appraiser do?
What are the reasons I would require your services?
How is an appraisal different than a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What are the contents of an appraisal report?
Upon completion of the appraisal, how can I have confidence that the value indicated is veritable?
What does it mean for an appraiser to be licensed?
Who do appraisers work for?
Where does an appraiser get the data used to estimate values in Washington County or other areas?
Why should I hire a licensed appraiser?
My mortgage statement has an item on it for PMI? Can I get rid of that?
How do I get ready for the appraiser?
Define "Market Value"
Who has rights to the appraisal report?
Which home renovations add the most to the price?

What is an appraisal?   (See list of FAQ's)

The method of creating an appraisal deals with an evaluation which forms an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or valuation. The Cost Approach is one of the methods that real estate appraisers use to find value; it involves discerning what the improvements would cost minus physical depreciation, plus the land value. The Sales Comparison Approach deals with finding similar houses in close proximity and figuring out the value based on comparing those properties to the home in question. The Sales Comparison Approach is commonly the most definitive and best indicator of value for a home. One of the least common approaches in appraising houses is the Income Approach, which is mainly used to find the value of a property based on what an investor would pay based on the capital produced by the property.

What does an appraiser do?   (See list of FAQ's)

An appraiser produces an unbiased and well supported determination of market value, often in the context of a real estate purchase. Appraisers reveal the details of their expert analysis in appraisal reports.

What are the reasons I would require your services?   (See list of FAQ's)

There are a lot of reasons to order an appraisal from LT Appraisal Services with the most common reason being real estate and mortgage transactions. Some other reasons for purchasing an appraisal report include:
  • If you are applying for a loan.
  • If you would like to lower your property tax obligations.
  • To build a case for a homeowner's equity and remove PMI.
  • To challenge high property taxes.
  • If you need to take care of an estate.
  • To provide you an edge when purchasing a home.
  • To determine an honest 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 lawsuit.
For a more detailed explanation of the appraisal process click here.

How is an appraisal different than a home inspection?   (See list of FAQ's)

Appraisers do not do provide house inspections and are not home inspectors. The purpose of a home inspection is to investigate the structure of the home from bottom to rooftop. For the most part, a home inspection report will evaluate the amenities and the requirements of the property: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

My agent performed a CMA for me. Is that the same as an appraisal?   (See list of FAQ's)

Frankly, they share nothing in common. What the CMA relies upon are ill-defined trends. Appraisals use similar sales which are verifiable resources. In addition, the appraisal checks other factors like condition, neighborhood and replacement costs. 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 largest differentiator is the person creating the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. A certified, Pennsylvania licensed professional who bases a career on valuing homes in and around Washington County creates the appraisal. Moreover, the appraiser is an unbiased voice, with no vested interest in the value of a home, unlike the real estate agent, who gets a commission based upon the price of the home.

What are the contents of an appraisal report?   (See list of FAQ's)

Every appraisal must indicate a believable value opinion and will identify the following:
  • The client and whose purposes the appraisal is to serve.
  • The intended use of the appraisal.
  • The appraisal's purpose.
  • The type of value reported and a definition of that value.
  • The effective date of the value opinion.
  • Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible factors.
  • 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 entailed in the activity of completing the assignment.
For a more in depth view of what goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, how can I have confidence that the value indicated is veritable?   (See list of FAQ's)

In communicating an appraisal report, each appraiser must make sure of the following:
  • The appraisal used an apropos analysis of the information.

  • Whether individually or collectively, there were no major errors contained in the report, nor any relevant details left out.

  • That appraisal services were not rendered in a careless or negligent manner.

  • That a believable, substantiated appraisal report was communicated.
To become a state licensed appraiser, we must satisfy considerable education and experience requirements that enable us to produce an unbiased opinion. Likewise, appraisers must follow a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The rules for carrying out an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

   (See list of FAQ's) Regulations regarding licensing and certification are different from state to state. However, licensing and certification typically translates to many hours of classroom study, tests and practical experience. Once 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 do appraisers work for?   (See list of FAQ's)

Commonly, appraisers are employed by lenders to estimate the value of real estate involved in a loan transaction. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does an appraiser get the data used to estimate values in Washington County or other areas?   (See list of FAQ's)

Gathering data is one of the primary things an appraiser does. Data can be categorized as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser while on site.

General data is gathered from a many sources. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. To double-check actual sales prices, we look at tax records and other public documents that are usually online nowadays. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood servers.

And most importantly, the appraiser gathers general data from his or her past experience in creating appraisals for other houses in the same market.

Why should I hire a licensed appraiser?   (See list of FAQ's)

An appraisal is a valuable tool anytime your home's value is relevant to some financial decision. If you're selling your home, an appraisal will help you determine a price that maximizes profit and reduces time on the market. 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. Don't make decisions in the dark with a professional appraisal.

My mortgage statement has an item on it for PMI? Can I get rid of that?   (See list of FAQ's)

PMI is short for for Private Mortgage Insurance. This additional policy guards the lender in the event a borrower defaults on the loan and the market price of the home 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.

Has your home value appreciated since you first purchased? Contact LT Appraisal Services today at 7249474733. You may be able to cancel your Private Mortgage Insurance payment.

How do I get ready for the appraiser?   (See list of FAQ's)

We begin with an inspection of the home. During this process, the appraiser 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, pick up any clutter and make sure 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.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
  • Information on any written private agreements, such as a shared driveway with a neighbor.
  • A list of any personal property that will be left behind and sold with the home, such as an oven, or a washer and dryer, if applicable.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
  • 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".

Define "Market Value"   (See list of FAQ's)

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?   (See list of FAQ's)

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 certainly entitled to a copy of the report - 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 scenarios, the appraiser may state the purpose of the appraisal; 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?   (See list of FAQ's)

Like all things real estate, this is dependent on a home's location. For example, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!

No matter where you go, however, renovating a kitchen is almost always a safe move. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms weren't far behind, yielding 85%. Adding bedrooms and baths can also help the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size.