Fairfield County Appraisal and Assessment Group has answers to "Frequently Asked Questions"
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Fairfield County Appraisal and Assessment Group is happy to reply to any questions you might have about appraisals in Greenwich and Bronx County.
Feel free to contact us today.
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What is an appraisal?
What does an appraiser do?
What would cause me to 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's in an appraisal report?
After completing the report, how can I have a guarantee that the value indicated is accurate?
What goes into an appraiser's certification?
Who engages the services of appraisers?
Where does Fairfield County Appraisal and Assessment Group get the information used to estimate values in Bronx 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?
Should I do anything in advance of the appraisal appointment
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?
What is an appraisal? (See list of FAQ's)
The procedure of writing an appraisal consists of an inspection which leads to an opinion of value.
The real estate appraiser will typically use a number of "approaches," typically three, to draw up the estimation of market value.
One of the processes is the Cost Approach - which is how much it would cost to replace the improvements, minus physical deterioration and other factors, then adding the land value.
The most common approach in figuring the value of a house is the Sales Comparison Approach which deals with figuring a comparison to similar homes close by.
Being the most common approach, the Sales Comparison Approach is generally the most precise and best indicator of market value for a house.
One of the least common approaches in appraising houses is the Income Approach, which is commonly used to determine the value of a property based on what an investor would pay based on the capital produced by the property.
What does an appraiser do? (See list of FAQ's)
An appraiser offers a professional, unbiased opinion of market value, to be used in making real estate transactions.
Appraisers show their conclusions in appraisal reports.
What would cause me to request a real estate appraisal? (See list of FAQ's)
There are many reasons to get an appraisal from Fairfield County Appraisal and Assessment Group with the most common reason being real estate and mortgage transactions.
Some other reasons for obtaining an appraisal include:
- If you are applying for a loan.
- To reduce your property taxes.
- To demonstrate a homeowner's acquired equity and remove insurance.
- To contest improperly assessed property taxes.
- If you need to take care of an estate.
- To provide you a negotiating tool when purchasing real estate.
- To determine a likely property value when selling real estate.
- To ensure parties are provided just compensation in eminient domain cases.
- Government agencies such as the IRS require an appraisal on every house.
- If you are ever involved in a civil case.
Click here for a more detailed explanation of the process dealing with getting an appraisal.
Appraisers do not do perform residential property inspections and are not home inspectors.
The purpose of a home inspection is to investigate the structure of the property from bottom to attic.
Generally, a home inspection report will discuss the amenities and the requirements of the house: 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 visible structures.
What is the difference between an appraisal and a comparative market analysis (CMA)? (See list of FAQ's)
To be honest, they have nothing in common.
What the CMA relies upon are ill-defined trends.
The appraisal is based on specific valid comparable sales.
Location and construction prices are also important in an appraisal.
All a CMA does is generate a "ball park figure."
Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.
But the biggest difference is who's behind the report.
Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation.
A certified, Connecticut licensed professional who made their livelihood on valuing real estate in and around Bronx County is behind the appraisal.
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 collect only a flat fee for assignments, regardless of their value conclusion.
Every appraisal must reflect a credible estimate of value and will identify the following:
- Who engaged the appraiser and other intended users.
- The intended use of the appraisal.
- The reason for the assignment.
- The type of value reported and a definition of that value.
- The effective date of the appraisal.
- Relevant property characteristics, including: location, physical attributes, 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 considerations.
- All 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.
- What was included in the process of completing the appraisal.
For a more in depth look at the work that goes into an appraisal report click here: Sample Appraisal Report
After completing the report, how can I have a guarantee that the value indicated is accurate? (See list of FAQ's)
In communicating an appraisal report, each appraiser must ensure the following:
- That the information analysis utilized in the appraisal was suitable.
- Whether individually or collectively, there were no significant errors contained in the report, nor any relevant details left out.
- That appraisal services were provided in a careful and cognizant manner.
- That a trustworthy, substantiated appraisal report was communicated.
To become a state licensed appraiser, we must fulfill intense education and experience requirements that prepare us to formulate an unbiased opinion.
Likewise, appraisers must obey a stringent industry code of ethics and observe 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).
(See list of FAQ's)
Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. However, licensing and certification is most often associated with many hours of classroom study, tests and experience working under a supervisory appraiser.
Once an appraiser is licensed, he/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? (See list of FAQ's)
Mortgage lenders are an appraiser's most likely client, requesting their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan.
Attorneys and CPAs also hire appraisers for asset division and estate settlements.
Where does Fairfield County Appraisal and Assessment Group get the information used to estimate values in Bronx County or other areas? (See list of FAQ's)
One of the most important things an appraiser does is to gather property data.
Data can be split into Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.
General data is gathered from a numerous places.
To research recent sales to be used as "comps", an appraiser will typically go to the local Multiple Listing Service.
Tax records and other courthouse documents reveal actual sales prices in a market.
Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood product.
And most importantly, the appraiser gathers general data from his or her past experience in doing assignments for other houses in the same market.
What can a full appraisal do for me? (See list of FAQ's)
An appraisal is a worthwhile anytime your home's value is pertinent to a financial decision.
For those selling a home, you'll want to figure out a price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that.
When buying, you can avoid overpaying by commissioning an independent appraisal.
If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly.
Simply put, a house 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? (See list of FAQ's)
PMI stands for Private Mortgage Insurance.
PMI protects the lender in case a borrower doesn't pay on the loan and the market price of the house is lower 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.
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Has your home value appreciated since you first purchased? Call Fairfield County Appraisal and Assessment Group today at 203-505-3905 to see if you can cancel your Private Mortgage Insurance payment.
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Should I do anything in advance of the appraisal appointment (See list of FAQ's)
The first step in most appraisals is the home inspection.
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 condition of its features.
On the home's interior, pick up any clutter and make sure we can get to things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of outside walls.
The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
- Records on the latest purchase of the property in the last three years.
- Information on any written private agreements, such as a shared driveway with a neighbor.
- Title policy that lists encroachments or easements.
- A list of any major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
- A list of "proposed" improvements when the property is being appraised "as complete".
What does "Market Value" mean? (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."
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 hiring the appraiser for things outside securing a mortgage.
In these cases, the appraiser may stipulate 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.
I want to get more for my house. Where should I spend money renovating? (See list of FAQ's)
It really depends on the market.
For example,
if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.
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, something that may not increase your value would be painting just for the sake of redecorating.
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