Advantage Appraisal, LLC has answers to "Frequently Asked Questions"


	Advantage Appraisal, LLC is always willing to reply to any questions you might have about appraisals or real estate in Charles Town and Jefferson County. Contact us today to see how we can help solve your specific valuation problems.

What is an appraisal?
Describe what an appraiser does
What are the reasons someone would request your services?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Once the assignment has been completed, how can I have a guarantee that the value conclusion is legitimate?
What are the requirements to be a certified appraiser?
Who are an appraiser's customers?
Where does Advantage Appraisal, LLC get the information used to estimate values in Jefferson County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal appointment
Define "Market Value"
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?

What is an appraisal? (Back to top)

The process of creating an appraisal report deals with an inspection which leads to an opinion of value. There are three "common approaches to value" which assists the appraiser conclude this opinion or estimate. One of them is the Cost Approach - which is how much it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. Easily the most common approach in finding the likely sales price of a house is the Sales Comparison Approach which deals with making a comparison to similar homes nearby. The Sales Comparison Approach is normally the most definitive and best indicator of a liklely sales price for a residence. One of the least common approaches in appraising residential properties is the Income Approach, which is commonly used to figure the market value of a property based on what an investor would pay based on the income produced by the property.

Describe what an appraiser does (Back to top)

An appraiser generates an unbiased and well justified opinion of market value, often in the context of a real estate exchange. Appraisers show their professional conclusions in appraisal reports.

What are the reasons someone would request your services? (Back to top)

There are many reasons to purchase an appraisal from Advantage Appraisal, LLC with the usual reason being real estate and mortgage transactions. Some other reasons for ordering an appraisal include:

If you are applying for a loan.
If you would like to reduce your property tax burden.
To build a case for a homeowner's equity and remove insurance.
To fight high property taxes.
To deal with an estate.
To offer you a leg-up when purchasing real estate.
To find a reasonable property value when listing your home.
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 ever find yourself in a civil case.

If you need a more detailed explanation of the appraisal process, please click here.

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

Appraisers do not do complete home inspections and are not home inspectors. An inspection is a third-party evaluation of the available structure and appliances of a house, from the roof to the foundation. Generally, a home inspection report will explain the amenities and the necessities of the property: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, exposed 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)

Frankly, they have nothing in common. The CMA uses market trends to conduct most of their business. An appraisal relies on comparable sales that can be proven by public record. The appraisal report will also contain location and construction values. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the biggest difference is who's creating the report. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Moreover, the appraiser is an independent voice, with no vested interest in the value of a home, unlike the agent, who gets a commission based upon the price of the home.

What are the contents of an appraisal report? (Back to top)

The main objective of an appraisal document is to let the reader know the value of the real estate in question, 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 report.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
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 factors, the property rights valued, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible items.
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.
The scope of work considered while working up the assignment.

For a more in depth view of the work that goes into an appraisal report click here: Sample Appraisal Report

Once the assignment has been completed, how can I have a guarantee that the value conclusion is legitimate? (Back to top)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:

The appraisal contained analysis of the data.

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

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

That a solid, supportable appraisal report was conferred.

To become a state licensed appraiser, we must meet extensive education and experience requirements that give us the background to formulate an unbiased opinion. Plus, appraisers must follow a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Back to top) Licensing and certification is achieved through coursework, tests and experience working under a supervisory appraiser. Once an appraiser is licensed, he/she must then complete continuing education courses so the license stays current. To see the specific requirements for any state click here.

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

Most of the time, appraisers are employed by lenders to render a value opinion on a home involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does Advantage Appraisal, LLC get the information used to estimate values in Jefferson County or other areas? (Back to top)

One of the primary activities of an appraiser is to collect property data. Data can be divided into Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.

General data is received from a many sources. To look up recently sold homes to be used as "comps", an appraiser will typically use the local Multiple Listing Service. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers often need 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 product.

And most importantly, the appraiser gathers general data from his or her collective knowledge gained from doing assignments for other properties in the same market.

How can a licensed appraiser help me? (Back to top)

If you're involved in any kind of financial decision and the value of your home matters, you'll want a full appraisal. If you're selling your home, an appraisal helps you set 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. A house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

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

PMI stands for Private Mortgage Insurance. It covers the lender in case a borrower doesn't pay on the loan and the value of the home is less than the balance of 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 mortgage payment include a fee for PMI?Call Advantage Appraisal, LLC today at (304)728-1999 or send us an e-mail. Documentation of your home's current value could save you thousands.

Should I do anything in advance of the appraisal appointment (Back to top)

We start 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 we have easy access to the exterior of the house . Trim any shrubs and move any items that would make it difficult to measure the structure. Indoors, make sure we can easily access items like furnaces and water heaters.

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

Any records on the purchase of the property for the last three years.
A list of any personal property that will be left behind and sold with the home, such as a oven, or a washer and dryer, if applicable.
Most recent real estate tax bill from Jefferson 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 Insulation or roof repairs) and permit confirmation (if available).
A list of "suggested" improvements when the property is being appraised "as complete".

Define "Market Value" (Back to top)

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."

Does the appraisal belong to the bank or the consumer? (Back to top)

For mortgage transactions, the lender requests the appraisal, either directly or through a third party. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The buyer is entitled to a copy of the appraisal - 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.

This rule doesn't apply when a home owner hires an appraiser directly. In these situations, the appraiser may state the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated 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 added value of a particular amenity truly depends on the local market. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 were second, yielding 85%. Adding bedrooms and baths can also boost 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.