The Appraisal Shop, LLC has answers to "Frequently Asked Questions"


	The Appraisal Shop, LLC is always prepared to reply to any concerns you might have about appraisals in Hutchinson and Reno County. Contact us today to learn how we can help you with your valuation problems.

Describe an appraisal
What does an appraiser do?
What would cause me to need services from The Appraisal Shop, LLC?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
Once the report has been completed, what assurance is there that the value indicated is trustworthy?
How hard is it to become certified?
Who engages the services of appraisers?
Where does an appraiser get the information used to estimate values in Reno 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?
Should I do anything in advance of the appraisal appointment
How does an appraiser define "Market Value"?
Once complete, who actually owns the appraisal report?
How can I get the most ROI out of home improvements?

Describe an appraisal (See list of FAQ's)

The method of writing an appraisal consists of an inspection which leads to an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or valuation. 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. Another of the processes is the Sales Comparison Approach - which concerns making a comparison to other similar nearby properties which have recently sold. The Sales Comparison Approach is commonly the most accurate and best indicator of value for a house. One of the least common approaches in appraising homes is the Income Approach, which is commonly used to find the value of a property based on what an investor would pay based on the income produced by the property.

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

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

What would cause me to need services from The Appraisal Shop, LLC? (See list of FAQ's)

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

If you are applying for a loan.
If you would like to lower your property tax burden.
To show a homeowner has 30% equity and remove insurance.
To contest high property taxes.
If you need to settle an estate.
To offer you a leg-up when purchasing real estate.
To determine an honest sales price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Because an official agency such as the IRS requires it.
It's possible you could have to deal with being in a lawsuit - an appraisal will help.

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

What is the difference between an appraisal and a home inspection? (See list of FAQ's)

The appraiser is not a home inspector and does not do a full home inspection. A third-party home inspector will judge the structure of the home, from the top to the bottom. The general home inspector's report will include an evaluation of the condition of the home's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

Is an appraisal the same as a comparative market analysis(CMA)? (See list of FAQ's)

Simply, they have nothing in common. The CMA depends on indistinct market trends. The appraisal is reliant on similar definite comparable sales. The appraisal report will also contain location and construction prices. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

The credentials of the person behind the report is frankly the biggest difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to accept a flat fee for assignments, regardless of their value conclusion.

What does the appraisal report contain? (See list of FAQ's)

The main purpose 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.
How the appraisal is supposed to be used.
The appraisal's purpose.
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 characteristics, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations 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.
The scope of work used while working up the assignment.

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

Once the report has been completed, what assurance is there that the value indicated is trustworthy? (See list of FAQ's)

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

The appraisal used analysis of the information.

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

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

The final appraisal report was clear, legitimate and conclusive.

There are intense classroom and real world experience requirements that must be fulfilled in order to become a licensed appraiser in Kansas. In addition, appraisers must abide by a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for working up an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's) Licensing and certification takes classroom study, tests and real world experience. Once licensed, he/she must then complete continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who engages the services of appraisers? (See list of FAQ's)

Commonly, appraisers are called upon by mortgage lenders to render a value opinion on property involved in a loan transaction. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

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

One of the most important activities of an appraiser is to assimilate property data. Data can be classified as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.

General data is gathered from a many sources. To look up recent sales to be used as "comps", we typically use the local Multiple Listing Service. To double-check actual sales prices, we look at items in the assessor's office 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 servers.

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

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

If you're involved in any kind of financial decision and the value of your home is relevant, you'll want a full appraisal. When selling your house, an appraisal helps you set the most appropriate price. 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. 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? (See list of FAQ's)

PMI is short for for Private Mortgage Insurance. This supplemental plan takes care of the lender in case a borrower defaults on the loan and the market price of the property is lower than the balance of the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Does your monthly house payment have a lineitem for PMI?Call The Appraisal Shop, LLC today at (620)665-8563 or send us an e-mail. Documentation of your home's present value could save you thousands.

Should I do anything in advance of the appraisal appointment (See list of FAQ's)

We begin with an inspection of the property. During this process, we 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. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house . Trim any landscaping and move any items that would get in our way while we measure the structure. Indoors, make sure we can get to items like furnaces and water heaters.

To help expedite our work as well as ensure a more accurate report, try if possible to have the following items:

Records on the latest purchase of the property in the last three years.
List of personal property to be sold with the building.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
Locate copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
A bill for your most recent real estate taxes which should also contain a legal description of the property.

How does an appraiser define "Market Value"? (See list of FAQ's)

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? (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 entitled to a copy of the report - 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.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these scenarios, the appraiser may state how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can do whatever they want with the appraisal.

How can I get the most ROI out of home improvements? (See list of FAQ's)

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