Most Appraisals & Assoc has answers to "Frequently Asked Questions"


	Most Appraisals & Assoc is prepared to elaborate on any questions you might have about appraisals or real estate in Dakota County. Contact Most Appraisals & Assoc today to talk about how we can help solve your specific valuation problems.

Describe an appraisal
What does an appraiser do?
Why would a person require your services?
How is an appraiser different than a home inspector?
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 appraisal has been delivered, how can I have assurance that the final number is trustworthy?
What are the requirements to be a certified appraiser?
Who engages the services of appraisers?
Where does Most Appraisals & Assoc get the data used to estimate values in Dakota County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Do you need anything from the homeowner in advance?
How does an appraiser define "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?

Describe an appraisal (Go to list of questions)

The appraisal process is an evaluation that produces an opinion of value. The real estate appraiser will use a several "approaches," typically three, to conclude the estimation of market value. One of the methods in use is the Cost Approach, which is what it would cost to restore the improvements to the home, less the depreciation and physical dilapidation, adding the land value. The Sales Comparison Approach involves finding comparable houses in close proximity and discerning value based on comparing those prior sales to the home being appraised. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a home. The Income Approach is mainly used for finding the market value of income-producing properties based on what an investor would pay based on the amount of income a property produce.

What does an appraiser do? (Go to list of questions)

An appraiser produces a professional, unbiased determination of market value, to be used in making real estate transactions. Appraisers document their findings in appraisal reports.

Why would a person require your services? (Go to list of questions)

There are many reasons to get an appraisal from Most Appraisals & Assoc with the most common reason being real estate and mortgage transactions. Other reasons for purchasing an report include:

If you are applying for a loan.
If you would like to lower your property tax obligations.
To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
To challenge inflated property taxes.
If you need to take care of an estate.
To provide you an edge when purchasing a home.
To determine an honest price when listing your home.
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 property.
If you are ever involved in a civil case.

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

How is an appraiser different than a home inspector? (Go to list of questions)

The appraiser is not a home inspector nor does he/she do a full home inspection. A third-party home inspector will investigate the structure of the property, from the top to the foundation. The stereotypical house inspector's report will include an evaluation of the condition of the property's heating systems, 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.

What is the difference between an appraisal and a comparative market analysis (CMA)? (Go to list of questions)

Frankly, it's like comparing Shakespeare to reality TV. The CMA uses market trends to conduct most of their business. Appraisals use comparable sales which are verifiable resources. The appraisal report will also contain area and building costs. The CMA will provide a non-specific 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 complete understanding of valuation methods or the entire market, create CMA's. 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 previously agreed upon sum for assignments, regardless of their outcome.

What can I expect to see in my appraisal report? (Go to list of questions)

Each report must indicate a believable estimate of value and must document the following:

The client and other intended users.
The intended use of the report.
The reason for the appraisal.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraiser's opinions and conclusions.(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 in question, and non-real estate items included in the appraisal, such as personal property, trade fixtures 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 used to complete the assignment.

For a more comprehensive look at what goes into an appraisal report click here: Sample Appraisal Report

Once the appraisal has been delivered, how can I have assurance that the final number is trustworthy? (Go to list of questions)

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

The appraisal used an apropos analysis of the data.

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

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

That a trustworthy, substantiated appraisal report was conferred.

To become a state licensed appraiser, we must meet intense education and experience requirements that train us to produce an unbiased opinion. In addition, appraisers must stick to a meticulous 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).

(Go to list of questions) Licensing and certification requires coursework, tests and practical experience. Once an appraiser is licensed, he or she must then complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who engages the services of appraisers? (Go to list of questions)

Mortgage lenders are an appraiser's most likely customer, requesting 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 Most Appraisals & Assoc get the data used to estimate values in Dakota County or other areas? (Go to list of questions)

One of the most important things an appraiser does is to compile data. Data can be divided into Specific or General. Specific data is gathered 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 variety of places. To research recently sold homes to be used as "comps", we often use the local Multiple Listing Service. To double-check actual sales prices, we research tax records and other public documents. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood system.

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

How can a licensed appraiser help me? (Go to 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. For those selling a home, you'll want to figure out a 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 parties settling an estate or divorce, an appraisal from Most Appraisals & Assoc is the best way to ensure assets are split up evenly. A home is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.

What exactly is PMI and how can I get rid of it? (Go to list of questions)

PMI is short for for Private Mortgage Insurance. This supplemental plan covers the lender if a borrower is unable to pay on the loan and the value of the property is less than what is owed on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Did you secure your mortgage with less than 20% down? Call Most Appraisals & Assoc today at (651) 437-5554 to see if you can get rid of your Private Mortgage Insurance premium.

Do you need anything from the homeowner in advance? (Go to list of questions)

We start with an inspection of the property. During this process, the appraiser 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 (gates aren't locked, etc). Trim any shrubs and relocate any items that would get in our way while we measure the structure. On the inside, make sure the appraiser can easily access appliances like furnaces and water heaters.

To help speed things along as well as ensure a more accurate report, attempt if possible to have the following items:

A plot plan or survey of the house and land (if readily available).
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.
A list of any major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
Information on "Homeowners Associations" or condominium covenants and fees.

How does an appraiser define "Market Value"? (Go to 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."

Does the appraisal belong to the bank or the consumer? (Go to list of questions)

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 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 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 use the appraisal for any purpose.

I want to get more for my house. Where should I spend money renovating? (Go to list of questions)

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

As a rule, the most value returned 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 were second, yielding 85%. Adding bedrooms and baths can also increase 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.