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McQuade Appraisal Service has answers to "Frequently Asked Questions"

McQuade Appraisal Service is prepared to handle any questions you might have about appraisals or real estate in Greenbrier County. Contact McQuade Appraisal Service today to talk about how we can help you with your valuation problems.

Describe an appraisal
What does an appraiser do?
What are the reasons someone would request a real estate appraisal?
What is the difference between an appraisal and a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
Once the assignment has been delivered, what guarantee is there that the value indicated is accurate?
How are appraisers certified?
Who employs appraisers?
Where does McQuade Appraisal Service get the data used to estimate values in Greenbrier 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 does "Market Value" mean?
Who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?

Describe an appraisal   (Back to top)

The method of writing an appraisal report consists of an inspection which leads to an opinion of value. The real estate appraiser will use a several "approaches," typically three, to arrive at the estimation of market value. The Cost Approach is one of the methods that appraisers use to find the value of a property; it involves finding what the improvements would cost minus physical deterioration, adding the land value. Another of the approaches is the Sales Comparison Approach - which concerns making a comparison to other similar nearby properties which have recently sold. Usually, the Sales Comparison Approach is the most definite indicator of market value of a home. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it deals with estimating what an investor would pay based on the income produced by the property.

What does an appraiser do?   (Back to top)

An appraiser generates an impartial and well supported opinion of market value, often in the context of a real estate exchange. Appraisers reveal the details of their findings in appraisal reports.

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

There are many reasons to order an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for ordering an report include:
  • To obtain a loan.
  • To lower your tax burden.
  • To show a homeowner has 30% equity and remove insurance.
  • To fight high property taxes.
  • To settle an estate.
  • To give you a leg-up when purchasing real estate.
  • To determine a likely sales 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 need an appraisal on every house.
  • If you ever find yourself in a lawsuit.
If you need a more detailed explanation of the appraisal process, please click here.

What is the difference between an appraisal and a home inspection?   (Back to top)

The appraiser is not a home inspector nor does he/she do a full home inspection. The purpose of a home inspection is to investigate the structure of the home from basement to attic. Generally, a home inspection report will evaluate the amenities and the necessities of the house: air conditioning (weather permitting), electrical services, 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 visible structures.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (Back to top)

To be blunt, it's like comparing opera to country. What the CMA relies upon are vague trends. The appraisal is reliant on specific valid comparable sales. Also, the appraisal looks at other factors like condition, area and construction prices. 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.

But the biggest difference is the person doing the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, generate CMA's. The appraisal is created 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 - their commission - whereas the appraiser is bound by a code of ethics to accept a previously agreed upon fee for assignments, regardless of their value conclusion.

What can I expect to see in my appraisal report?   (Back to top)

Each report must reflect a credible estimate of value and must document the following:
  • The client and other intended users.
  • The intended use of the report.
  • The appraisal's purpose.
  • The type of value reported and a definition of that value.
  • The effective date of the appraiser's opinions and conclusions.
  • Pertinent property attributes, including: location, physical attributes, legal attributes, economic attributes, 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.
  • What was included in the process of completing the job.
For a more in depth look at what 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 accurate?   (Back to top)

In communicating an appraisal report, each appraiser must ensure the following:
  • That the information analysis contained in the appraisal was proper.

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

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

  • The final appraisal report was understandable, legitimate and not easily discredited.
To become a state licensed appraiser, there are strenuous education requirements as well as on the jobexperience that must be logged. Plus, appraisers must follow a strict industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for working up an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

   (Back to top) Licensing and certification is achieved through classroom study, tests and experience working under a supervisory appraiser. Once licensed, he or she is required to engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers?   (Back to top)

Mortgage lenders are an appraiser's most likely client, needing their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does McQuade Appraisal Service get the data used to estimate values in Greenbrier County or other areas?   (Back to top)

Gathering information is one of the primary things an appraiser performs. Data can be categorized as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.

General data is gathered from a number of sources. Local Multiple Listing Services (MLS) provide data on recently sold homes that might be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood service.

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?   (Back to top)

An appraisal is a valuable tool anytime the value of your home is relevant to some financial decision. For those selling a home, you'll want to determine the price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from McQuade Appraisal Service is the best way to ensure assets are split up fairly. 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?   (Back to top)

PMI is the common abbreviation for for Private Mortgage Insurance. This additional policy covers the lender in case a borrower defaults on the loan and the market price of the home is lower than the balance of the loan. 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 amount you keep from getting rid of your PMI will make up for the price of the appraisal in a matter of months. McQuade Appraisal Service is in the business of tracking value trends in Lewisburg and Greenbrier County. Contact us today.

Do you need anything from the homeowner in advance?   (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 amenities. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and move any items that would get in our way while we measure the structure. On the inside, make sure the appraiser can get to items like furnaces and water heaters.

You can make our visit go faster and improve the quality of the appraisal report by having the following things on hand:
  • A plot plan or survey of the house and land (if available).
  • List of personal property to be sold with the home.
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.
  • A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Insulation 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 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."

Who actually owns the appraisal report?   (Back 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 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.

The exception to this rule is when a home owner hires an appraiser directly. In these situations, the appraiser may stipulate 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.

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

A home's location - what city it is in and even what part of that city - is key to this popular question. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

No matter where you go, however, renovating a kitchen is almost always a safe move. 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.