W.B. Appraisals has answers to "Frequently Asked Questions"


	W.B. Appraisals is always prepared to answer any concerns you might have about appraisals or real estate in Warrington and Bucks County. Don't hesitate to contact us today.

What is an appraisal?
Describe what an appraiser does
What are the reasons I would require services from W.B. Appraisals?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
Upon completion of the report, what assurance is there that the value conclusion is valid?
What goes into an appraiser's certification?
Who engages the services of appraisers?
Where does W.B. Appraisals get the data used to estimate values in Bucks 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 inspection
How does an appraiser define "Market Value"?
Who actually owns the appraisal report?
Are some home improvements more worthwhile than others?

What is an appraisal? (List of questions)

The appraisal process is an evaluation that leads to an opinion of value. The real estate appraiser will use a number of "approaches," typically three, to arrive at the estimation of market value. One of the three is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value. The Sales Comparison Approach involves searching for similar homes in close proximity and figuring out the value based on comparing those properties to the house being investigated. 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 homes is the Income Approach, which is mainly used to figure the value of a property based on what an investor would pay based on the income produced by the building.

Describe what an appraiser does (List of questions)

An appraiser forumlates a fair and credible determination of market value, often in the context of a real estate exchange. Appraisers reveal the details of their professional conclusions in appraisal reports.

What are the reasons I would require services from W.B. Appraisals? (List of questions)

There are a lot of reasons to purchase an appraisal from W.B. Appraisals with the most common reason being real estate and mortgage transactions. Some other reasons for obtaining an appraisal report include:

To obtain a loan.
If you would like to lower your property tax obligations.
To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
To contest high property taxes.
If you need to settle an estate.
To provide you a negotiating tool when purchasing real estate.
To figure out the most probable price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS require an appraisal on every house.
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? (List of questions)

Home inspectors do not figure out an opinion of value and do not use the same forms as appraisers. The purpose of a home inspection is to evaluate the structure of the property from bottom to rooftop. For the most part, a home inspection report will explain the amenities and the necessities of the property: 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 other visible structures.

Is an appraisal the same as a comparative market analysis(CMA)? (List of questions)

Simply put, it's like comparing broadband and dial-up. What the CMA relies upon are superficial trends. Appraisals use similar sales which are verifiable resources. Location and building costs are also important in an appraisal. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

The person creating the report is hands down the most significant difference between a CMA and an appraisal. 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 flat fee for assignments, regardless of their value conclusion.

What does the appraisal report contain? (List of questions)

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:

Who engaged the appraiser and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The purpose of the assignment.
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!)
Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible factors.
All 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 activity of completing the job.

For a more in depth view of what goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the report, what assurance is there that the value conclusion is valid? (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 a suitable analysis of the information.

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

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

That a trustworthy, defensible appraisal report was conferred.

To become a state licensed appraiser, there are education requirements as well as experience that must be attained - all with the end goal of being able to render unbiased value opinions. In addition, appraisers must stick to a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(List of questions) Licensing and certification takes classroom study, tests and real world experience. Once an appraiser is licensed, he/she must then take continuing education courses so the license remains up to date. To see the specific requirements for any state click here.

Who engages the services of appraisers? (List of questions)

Commonly, appraisers are called upon by mortgage lenders to render a value opinion on real estate involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does W.B. Appraisals get the data used to estimate values in Bucks County or other areas? (List of questions)

Compiling data is one of the primary occupations of an appraiser. Data can be classified as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.

General data is received from a many places. Local Multiple Listing Services (MLS) have information on recently sold homes that could be used as comparables. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood system.

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

Why should I hire a licensed appraiser? (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 determine the 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. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from W.B. Appraisals is the best documentation to ensure assets are split up 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? (List of questions)

PMI is the common abbreviation for for Private Mortgage Insurance. It takes care of the lender if a borrower is unable to pay on the loan and the value of the home 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.


	Did you have less than 20% to put down on your mortgage? Call W.B. Appraisals today at 267-463-6299 to see if you can cancel your Private Mortgage Insurance premium.

Should I do anything in advance of the appraisal inspection (List of questions)

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. Inside, make sure it is clutter free and that we can get to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of exterior walls.

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

A survey or plot map of the property and building (if available).
Written property agreements, such as a maintenance agreement for a shared driveway.
A bill for your most recent real estate taxes which should also contain a legal description of the property.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
Find copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.

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

Who actually owns the appraisal report? (List of questions)

For mortgage transactions, the lender requests the appraisal, either directly or through a third party. 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 appraisal - 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.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these situations, the appraiser may define how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can use the appraisal for any purpose.

Are some home improvements more worthwhile than others? (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, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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, returning 85%. On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.