Ed Cline Appraisals has answers to "Frequently Asked Questions"


	Ed Cline Appraisals is always willing to handle any questions you might have about appraisals or real estate in Beaver County. Contact Ed Cline Appraisals today to learn how we can help you with your specific valuation problems.

Describe an appraisal
What does an appraiser do?
What would cause me to require 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?
Once the assignment has been delivered, what guarantee is there that the value indicated is veritable?
How are appraisers certified?
Who engages the services of appraisers?
Where does Ed Cline Appraisals get the data used to estimate values in Beaver 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"
Who has rights to the appraisal report?
Which home renovations add the most to the price?

Describe an appraisal (List of questions)

The appraisal process is an evaluation that generates an opinion of value. There are three "common approaches to value" which helps the appraiser come to this opinion or valuation. One of the processes in use is the Cost Approach, which evaluates what it would cost to replace the improvements to the home, less the age and physical dilapidation, adding the land value. The most common approach in finding the value of a home is the Sales Comparison Approach which concerns making a comparison to similar properties close by. Usually, the Sales Comparison Approach is the most definite indicator of market value of a home. The Income Approach is mainly 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.

What does an appraiser do? (List of questions)

An appraiser produces a fair and credible assessment of market value, to be used in making real estate transactions. Appraisers demonstrate their professional analysis in appraisal reports.

What would cause me to require your services? (List of questions)

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

To get a loan.
To reduce your tax burden.
To help a homeowner realize if they owe less than 80% of their home's value and remove insurance.
To contest high property taxes.
If you need to settle an estate.
To give you a negotiating tool when purchasing a home.
To determine a reasonable property value when selling your home.
To defend 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 ever find yourself in a lawsuit.

If you need more information regarding the appraisal process, please click here.

How is an appraiser different than a home inspector? (List of questions)

Home inspectors do not generate an opinion of value and do not use the same forms as appraisers. The purpose of a home inspection is to investigate the structure of the house from foundation to top. The usual property inspector's report will include an evaluation of the condition of the home's heating system, 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)? (List of questions)

To be blunt, it's night and day. What the CMA depends on are superficial trends. An appraisal utilizes comparable sales that can be proven by public record. The appraisal report will also include area and construction 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 who's behind the report. Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, Pennsylvania licensed professional who bases a career on valuing real estate in and around Beaver County is behind the appraisal. Further, the appraiser is an unbiased party, with no vested interest in the value conclusion, unlike the real estate agent, whose income is tied to the value of the home.

What's in an appraisal report? (List of questions)

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

The client and other intended users.
The intended use of the appraisal.
The reason for the appraisal.
The type of value reported and a definition of that value.
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 description, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible considerations.
All 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 activity of completing the job.

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

Once the assignment has been delivered, what guarantee is there that the value indicated is veritable? (List of questions)

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

That the information analysis contained in the appraisal was suitable.

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

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

The final appraisal report was clear, sound and not easily discredited.

To become a state licensed appraiser, there are strenuous education requirements as well as on the jobexperience that must be attained. Plus, appraisers must stick to a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The rules for carrying out an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(List of questions) 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 experience working under a supervisory appraiser. Once licensed, he or she must then complete continuing education courses so the license remains current. To see the specific requirements for any state click here.

Who engages the services of appraisers? (List of questions)

Commonly, appraisers are employed by mortgage lenders to estimate the value of a house involved in a loan transaction - to make sure the subject is truly adequate collateral for the loan. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does Ed Cline Appraisals get the data used to estimate values in Beaver County or other areas? (List of questions)

One of the primary tasks an appraiser must accomplish is to compile property data. Data can be split into Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.

General data is collected from a number of sources. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. To verify actual sales prices, we use tax records and other public documents that are usually online nowadays. Appraisers often have to report when a property lies in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

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

Why do I need a professional appraisal? (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 house, an appraisal helps you set the most appropriate price. When buying, be sure you're not overpaying by getting an independent appraisal. 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? (List of questions)

PMI is the common abbreviation for for Private Mortgage Insurance. It protects the lender in the event a borrower is unable to pay on the loan and the market price of the property is less than what the borrower still owes 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.


	Is PMI a lineitem in your monthly mortgage payment?Call Ed Cline Appraisals today at 724-847-3211 or send us an e-mail. A new appraisal could save you thousands.

Do you need anything from the homeowner in advance? (List of questions)

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 amenities. Inside, pick up any clutter and make sure we can access things like furnaces and water heaters. In the yard, trim any landscaping 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:

Records on the latest purchase of the property in the last three years.
Information on any written private agreements, such as a shared driveway with a neighbor.
Most recent real estate tax bill and or legal description of the property.
Brag sheet that lists major home improvements and enhancements, 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).
Information on "Homeowners Associations" or condominium covenants and fees.

Define "Market Value" (List of questions)

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? (List of questions)

For mortgage transactions, the lender orders 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 entitled to a copy of the report - 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.

This rule doesn't apply when a home owner engages an appraiser directly. 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.

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

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, 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 would add approximately $8,800 to the value of the home. Bathrooms weren't far behind, returning 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.