All Value Appraisal Service has answers to "Frequently Asked Questions"


	All Value Appraisal Service is always eager to handle any concerns you might have about appraisals or real estate in Los Angeles County. Contact All Value Appraisal Service today to talk about how we can help you with your valuation problems.

Define the term "Appraisal"
Describe what an appraiser does
What are the reasons someone would request a real estate appraisal?
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 is done, what guarantee is there that the final number is veritable?
How difficult is it to become certified?
Who employs appraisers?
Where does All Value Appraisal Service get the information used to estimate values in Los Angeles County or other areas?
What can a full appraisal do for me?
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?
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
I want to get more for my house. Where should I spend money renovating?

Define the term "Appraisal" (Return to top)

An appraiser provides an estimation that leads to an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or estimate. The Cost Approach is one of the methods that appraisers use to find value; it involves figuring what the improvements would cost without physical deterioration, plus the land value. The Sales Comparison Approach deals with finding similar houses nearby and finding value based on comparing those properties to the house in question. Being the most common approach, the Sales Comparison Approach is generally the most precise and best indicator of worth for a home. One of the least common approaches in appraising homes is the Income Approach, which is mainly used to find the worth of a property based on what an investor would pay based on the capital produced by the building.

Describe what an appraiser does (Return to top)

An appraiser offers a fair and credible opinion of market value, to be used in making real estate transactions. Appraisers summarize their expert findings in appraisal reports.

What are the reasons someone would request a real estate appraisal? (Return to top)

There are a lot of reasons to get an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for purchasing an report include:

If you are applying for a loan.
To reduce 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 contest high property taxes.
To settle an estate.
To give you an edge when purchasing a home.
To figure out a likely sales price when selling your home.
To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
Government agencies such as the IRS need an appraisal on every property.
It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.

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

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

The appraiser is not a home inspector and does not do a comprehensive home inspection. The point of a home inspection is to evaluate the structure of the property from bottom to attic. The standard house inspector's report will contain an evaluation of the integrity of the property's heating system, 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)? (Return to top)

To be blunt, it's night and day. What the CMA relies upon are ill-defined trends. Appraisals use similar sales which are valid resources. Area and construction values are also important in an appraisal. All a CMA does is generate a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

The credentials of the person creating the report is hands down the biggest difference between a CMA and an appraisal. 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, state licensed professional who bases their livelihood on valuing properties in and around Los Angeles County creates the appraisal. Moreover, the appraiser is an unbiased voice, with no vested interest in the property's value, unlike the real estate agent, whose income is tied to the value of the home.

What are the contents of an appraisal report? (Return 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, one will customarily see the following:

The client and other intended users.
The intended use of the report.
The appraisal's purpose.
The type of value contained and a definition of that value.
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 property rights in question, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible considerations.
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 when completing the job.

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

Once the assignment is done, what guarantee is there that the final number is veritable? (Return to top)

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

The appraisal used an appropriate analysis of the information.

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

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

That a solid, substantiated appraisal report was communicated.

To become a state licensed appraiser, there are intense education requirements as well as experience that must be attained. Likewise, appraisers must stick to a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for working up an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

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Licensing and certification is achieved through classroom study, tests and experience working under a supervisor. Once an appraiser is licensed, he or she must then complete continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who employs appraisers? (Return to top)

Mortgage lenders are an appraiser's typical client, using their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does All Value Appraisal Service get the information used to estimate values in Los Angeles County or other areas? (Return to top)

Collecting data is one of the primary tasks an appraiser does. Data can be divided into 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 collected from a many sources. To look up recent sales to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. Tax records and other public documents reveal actual sales prices in a market. Appraisers often have to report when a property is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And last but not least, the appraiser assembles general data from his or her past experience in creating appraisals for other properties in the same market.

What can a full appraisal do for me? (Return 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 assists you in setting the most appropriate price. When buying, be sure you're not overpaying by commissioning an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A home is often the single, largest financial asset anybody owns. Without knowing its real worth, wise financial decisions are impossible.

My mortgage statement has an item on it for PMI? Can I get rid of that? (Return to top)

PMI stands for Private Mortgage Insurance. This supplementary plan takes care of the lender in the event a borrower defaults 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.


	Does your monthly house payment have a lineitem for PMI? Call All Value Appraisal Service today at (661) 259-7858 (661) 259-7858 or send us an e-mail. A new appraisal could save you thousands.

Do you need anything from the homeowner in advance? (Return to top)

The first step in most appraisals is the home inspection. 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. Inside, pick up any clutter and make sure we can find our way to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of outside walls.

You can make our visit go faster and improve the quality of the appraisal report by having the following things on hand:

Any records on the purchase of the property for the last three years.
Information on any written private agreements, such as a shared driveway with a neighbor.
A bill for your most recent real estate taxes which should also contain a legal description of the property.
Brag sheet that lists major home improvements and upgrades, the date of their installation and their cost (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

What is "Market Value?" (Return to top)

Market value or fair market value is the most probable price that a property should bring (will sell for) in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, 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: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised; (3) a reasonable time is allowed for exposure to the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) 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? (Return to top)

In most real estate transactions, the appraisal is ordered by the lender. 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 certainly 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.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. 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 noted otherwise, the home owner can do whatever they want with the appraisal.

I want to get more for my house. Where should I spend money renovating? (Return to top)

The answer to this is different depending upon the location of the home. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

As a rule, the best ROI from renovating a home comes in the kitchen. 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, yielding 85%. Adding bedrooms and baths can also help the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.