Mason's Appraisal Service has answers to "Frequently Asked Questions"


	Mason's Appraisal Service is always ready to reply to any questions you might have about appraisals or real estate in Mason County. Contact Mason's Appraisal Service today to talk about how we can help you with your specific valuation problems.

Define the term "Appraisal"
What does an appraiser do?
What would cause me to request services from Mason's Appraisal Service?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
Once the report is done, how can I have a guarantee that the value indicated is accurate?
How hard is it to become certified?
Who are an appraiser's customers?
Where does an appraiser get the data used to estimate values in Mason County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What does "Market Value" mean?
Once complete, who actually owns the appraisal report?
How can I get the most ROI out of home improvements?

Define the term "Appraisal" (Back to top)

The appraisal process is an estimation that leads to an opinion of value. The appraiser will typically use a number of "approaches," typically three, to arrive at the estimation of market value. One of the three is the Cost Approach - which is how much capital would be required to replace the improvements, minus physical deterioration and other factors, plus the land value. The most common approach in figuring the likely sales price of a house is the Sales Comparison Approach which deals with concluding a comparison to similar houses close by. 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 generally used to figure the value of a property based on what an investor would pay based on the capital produced by the building.

What does an appraiser do? (Back to top)

An appraiser forumlates an impartial and well justified opinion of market value, often in the context of a real estate purchase. Appraisers reveal the details of their expert analysis in appraisal reports.

What would cause me to request services from Mason's Appraisal Service? (Back to top)

There are a lot of reasons to purchase an appraisal from Mason's Appraisal Service with the usual reason being real estate and mortgage transactions. A few other reasons for getting an report include:

If you are applying for a loan.
To lower your property taxes.
To help a homeowner realize if they owe less than 80% of their home's value and remove Primary Mortgage Insurance.
To fight high property taxes.
If you need to settle an estate.
To give you a negotiating tool when purchasing real estate.
To find a likely price when selling real estate.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Government agencies such as the IRS require an appraisal on every house.
It's possible you could be involved in a lawsuit - an appraisal will help.

For a more detailed explanation of the appraisal process click here.

How is an appraisal different than a home inspection? (Back to top)

Home inspectors do not provide an opinion of value and are not appraisers. A third-party home inspector will evaluate the structure of the property, from the top to the bottom. Commonly, a home inspection report will discuss the amenities and the requirements of the house: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

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

To be blunt, it's night and day. What the CMA depends on are superficial trends. The appraisal is based on similar definite comparable sales. The appraisal report will also include area and building costs. 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.

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 produce by a licensed, certified professional who makes a living out of valuing properties. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat fee for assignments, regardless of their outcome.

What's in an appraisal report? (Back to top)

The main point 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, one will customarily see the following:

Who engaged the appraiser and other intended users.
The intended use of the appraisal.
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 valued, and non-real estate items included in the valuation, such as personal property, trade fixtures 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.
The scope of work used while working up the assignment.

For a more detailed look at the work that goes into an appraisal report click here: Sample Appraisal Report

Once the report is done, how can I have a guarantee that the value indicated is accurate? (Back to top)

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

The appraisal contained analysis of the data.

Whether individually or collectively, there were no substantial errors contained in the appraisal, nor any material details left out.

That appraisal services were not carried out in a careless or negligent manner.

The final appraisal report was easy to explain, sound and conclusive.

To become a state licensed appraiser, there are extensive education requirements as well as on the jobexperience that must be logged - all with the objective of being able to render unbiased value opinions. In addition, appraisers must follow 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).

(Back to top) Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. However, licensing and certification is commonly associated with many hours of classroom study, tests and real world experience. Once licensed, he/she is required to take continuing education courses so the license remains up to date. To see the specific requirements for any state click here.

Who are an appraiser's customers? (Back to top)

Mortgage lenders are an appraiser's most likely customer, requesting their services to ensure a home involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does an appraiser get the data used to estimate values in Mason County or other areas? (Back to top)

Collecting data is one of the main things an appraiser performs. Data can be categorized as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.

General data is received from a number of sources. To research recent sales to be used as "comps", we typically go to the local Multiple Listing Service. To verify actual sales prices, we look at items in the assessor's office and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood service.

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

Why do I need a professional appraisal? (Back to top)

If you're making any kind of financial decision and the value of your home is relevant, you'll want an appraisal. If you're selling your home, an appraisal will help you determine the most appropriate price. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Mason's Appraisal Service is the best way to ensure assets are split up properly. A house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.

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

PMI is an acronym for Private Mortgage Insurance. This added policy covers the lender if a borrower is unable to pay on the loan and the value of the home is less than the loan balance. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.


	The money you keep from cancelling your PMI pays for the appraisal in a matter of months. Mason's Appraisal Service stays current with value trends in Maysville and Mason County. Contact us today.

How do I get ready for the appraiser? (Back to top)

We begin with an inspection of the property. 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 status of its features. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house . Trim any landscaping and relocate any items that would make it difficult to measure the structure. Indoors, make sure we can easily access appliances 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.
List of personal property to be sold with the building.
Most recent real estate tax bill and or legal description of the property.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .

What does "Market Value" mean? (Back to 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? (Back 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 report - it's usually bundled with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

This rule doesn't apply when a home owner hires an appraiser directly. In these cases, the appraiser may stipulate how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can use the appraisal for any purpose.

How can I get the most ROI out of home improvements? (Back to top)

The answer to this is different depending upon the location of the home. 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. 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 are right up there with kitchens, yielding 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.