Abandy & Associates Appraisal Services has answers to "Frequently Asked Questions"


	Abandy & Associates Appraisal Services is eager to handle any questions you might have about appraisals in Chino Hills and San Bernardino County. Don't hesitate to contact us today.

Describe an appraisal
What does an appraiser do?
What are the reasons I would request services from Abandy & Associates Appraisal Services?
How is an appraiser different than a home inspector?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
Once the report is done, how can I have confidence that the value conclusion is valid?
How are appraisers certified?
Who engages the services of appraisers?
Where does Abandy & Associates Appraisal Services get the data used to estimate values in San Bernardino County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?

Describe an appraisal (See list of FAQ's)

The procedure of writing an appraisal report deals with an evaluation which forms an opinion of value. There are three "common approaches to value" which assists the real estate appraiser arrive at this opinion or valuation. 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, plus the land value. The Sales Comparison Approach deals with searching for similar properties in the vicinity and discovering the value based on making a comparison of those prior sales to the home in question. Usually, the Sales Comparison Approach is the most definite indicator of market value of a residential property. One of the least common approaches in appraising residential properties is the Income Approach, which is commonly used to figure the market 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 fair and credible assessment of market value, to be used in making real estate transactions. Appraisers document their conclusions in appraisal reports.

What are the reasons I would request services from Abandy & Associates Appraisal Services? (See list of FAQ's)

There are a lot of reasons to obtain an appraisal with the most common reason being real estate and mortgage transactions. Some other reasons for obtaining an appraisal include:

To obtain a loan.
To reduce your tax burden.
To show a homeowner has 30% equity and remove insurance.
To fight high property taxes.
To handle an estate.
To provide you a leg-up when purchasing real estate.
To figure out the most probable price when putting your home on the market.
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 require an appraisal on every house.
It's possible you could be involved in a lawsuit - an appraisal will definitely help.

For a more detailed explanation of the appraisal process click here.

How is an appraiser different than a home inspector? (See list of FAQ's)

The appraiser is not a home inspector and does not do a full home inspection. The point of a home inspection is to investigate the structure of the property from bottom to rooftop. The usual house inspector's report will contain an evaluation of the condition of the house'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.

What is the difference between an appraisal and a comparative market analysis (CMA)? (See list of FAQ's)

Frankly, it's night and day. What the CMA depends on are superficial trends. An appraisal utilizes comparable sales that can be verified by public record. The appraisal report will also contain neighborhood and construction values. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

Who's creating the report is frankly the biggest difference between a CMA and an appraisal. Real estate agents produce CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, state licensed professional who has formed a career on valuing real estate in and around San Bernardino County is behind the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon fee for work they perform, regardless of their outcome.

What are the contents of an appraisal report? (See list of FAQ's)

Each appraisal should reflect a believable estimate of value and should clearly state the following:

Who engaged the appraiser and whose purposes the appraisal is to serve.
The intended use of the appraisal.
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.(Sometimes this is in the past or maybe the future for new construction!)
Relevant property characteristics, including: location, physical description, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible factors.
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 entailed in the activity of completing the appraisal.

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

Once the report is done, how can I have confidence that the value conclusion is valid? (See list of FAQ's)

In communicating an appraisal report, each appraiser must make sure of the following:

The appraisal contained analysis of the information.

That significant errors of omission or commission were not committed individually or collectively.

That appraisal services were provided in a careful and judicious fashion.

The final appraisal report was transparent, legitimate and not easily discredited.

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

(See list of FAQ's) Licensing and certification takes coursework, tests and real world experience. Once licensed, he/she must then engage in continuing education courses so the license remains current. To see the specific requirements for any state click here.

Who engages the services of appraisers? (See list of FAQ's)

Typically, appraisers are called upon by mortgage lenders to render a value opinion on a house involved in a loan transaction. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Abandy & Associates Appraisal Services get the data used to estimate values in San Bernardino County or other areas? (See list of FAQ's)

Collecting information is one of the main things an appraiser does. Data can be classified as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is collected from a numerous sources. To look up recently sold homes to be used as "comps", we often use the local Multiple Listing Service. Tax records and other public documents verify actual sales prices in a market. Appraisers routinely need to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And last but not least, the appraiser assimilates general data from his or her collective knowledge gained from doing assignments for other houses in the same market.

Why should I hire a licensed appraiser? (See list of FAQ's)

If you're making any kind of financial decision and the value of your home is relevant, you'll want a full appraisal. For those selling a home, you'll want to figure out 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. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. Simply put, a home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

What exactly is PMI and how can I get rid of it? (See list of FAQ's)

PMI stands for Private Mortgage Insurance. PMI takes care of the lender in case a borrower is unable to pay on the loan and the value of the house 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.


	The money you keep from cancelling the PMI required when you got your mortgage will make up for the price of the appraisal in a matter of months. Abandy & Associates Appraisal Services has years of experience with real estate value trends in Chino Hills and San Bernardino County. Contact us today.

How do I get ready for the appraiser? (See list of FAQ's)

The first step in most appraisals is the property inspection. 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 we have easy access to the exterior of the house (gates aren't locked, etc). Trim any shrubs and relocate any items that would make it difficult to measure the structure. On the inside, make sure we can get to appliances like furnaces and water heaters.

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

Information on any written private agreements, such as a shared driveway with a neighbor.
List of personal property to be sold with the home.
Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
A list of any major home improvements and enhancements, 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 if the property is to be 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."

Does the appraisal belong to the bank or the consumer? (See list of FAQ's)

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

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

Are some home improvements more worthwhile than others? (See list of FAQ's)

The answer to this is different depending upon the location of the home. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!

As a rule, the most value returned from renovating a home comes in the kitchen. 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 weren't far behind, returning 85%. Adding bedrooms and baths can also boost 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.