Appraisal Consultants, LLC has answers to "Frequently Asked Questions"


	Appraisal Consultants, LLC is always ready to handle any inquiries you might have about appraisals in Salt Lake County. Contact us today to see how we can help you with your valuation problems.

What is an appraisal?
What does an appraiser do?
What are the reasons someone would require services from Appraisal Consultants, LLC?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What are the contents of an appraisal report?
After completing the report, what guarantee is there that the final number is accurate?
What are the requirements to be a certified appraiser?
Who do appraisers work for?
Where does Appraisal Consultants, LLC get the data used to estimate values in Salt Lake County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What is "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?

What is an appraisal? (See list of FAQ's)

An appraisal report is an estimation that concludes with an opinion of value. There are three "common approaches to value" which helps the real estate appraiser come to this opinion or estimate. The Cost Approach is one of the processes that real estate appraisers use to find value; it involves figuring what the improvements would cost minus physical deterioration, plus the land value. The Sales Comparison Approach deals with searching for comparable homes in close proximity and figuring out the value based on making a comparison of those prior sales to the home being investigated. Being the most common approach, the Sales Comparison Approach tends to be the most accurate and best indicator of market value for a house. The Income Approach is mainly used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in.

What does an appraiser do? (See list of FAQ's)

An appraiser produces an impartial and well justified opinion of market value, often in the context of a real estate exchange. Appraisers summarize their expert investigation in appraisal reports.

What are the reasons someone would require services from Appraisal Consultants, LLC? (See list of FAQ's)

There are many reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for ordering an report include:

To receive a loan.
To reduce your tax burden.
To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
To fight high property taxes.
If you need to settle an estate.
To offer you a leg-up when purchasing a home.
To find 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.
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? (See list of FAQ's)

The appraiser is not a home inspector and does not do a complete home inspection. The point 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 home: 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, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

My agent performed a CMA for me. Is that the same as an appraisal? (See list of FAQ's)

Simply put, it's like comparing broadband and dial-up. The CMA depends on indistinct market trends. Appraisals use comparable sales which are verifiable resources. Location and building prices are also a priority in an appraisal. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

Who's creating the report is actually the most significant difference between a CMA and an appraisal. Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, state licensed professional who bases their livelihood on valuing homes in and around Salt Lake County is behind the appraisal. Likewise, the agent has a vested interest in the property's selling price 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 are the contents of an appraisal report? (See list of FAQ's)

The main objective of an appraisal report is to let the reader know the value of the real estate in question, and depending on the scope of the report, you'll usually see the following:

The client and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The reason for the appraisal.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraisal.
Pertinent property attributes, including: location, physical attributes, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible items.
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 process of completing the appraisal.

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

After completing the report, what guarantee is there that the final number is accurate? (See list of FAQ's)

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

That the information analysis contained in the appraisal was proper.

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

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

That a believable, substantiated appraisal report was imparted.

There are rigorous education and real world experience requirements that must be fulfilled in order to get an appraisal license in Utah. Plus, appraisers must stick to a strict industry code of ethics and respect 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).

(See list of FAQ's) Licensing and certification requires coursework, tests and real world experience. Once licensed, he/she must then take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who do appraisers work for? (See list of FAQ's)

Commonly, appraisers are employed by mortgage lenders to estimate the value of real estate involved in a loan transaction. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Appraisal Consultants, LLC get the data used to estimate values in Salt Lake County or other areas? (See list of FAQ's)

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

General data is gathered from a variety of places. To find out about recent sales to be used as "comps", an appraiser will typically use the local Multiple Listing Service. To verify actual sales prices, we use tax records and other public documents that are usually online nowadays. Appraisers often have to report when a property is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

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

Why do I need a professional appraisal? (See list of FAQ's)

An appraisal is a valuable tool anytime the value of your home is pertinent to some financial decision. 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. When buying, you can avoid overpaying by getting 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.

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

PMI stands for Private Mortgage Insurance. This added policy covers the lender if a borrower defaults on the loan and the value of the home is less than what is owed on 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.


	Is PMI a part of your monthly house payment?Call Appraisal Consultants, LLC today at 801-582-3014 or send us an e-mail. Documentation of your home's present value could save you thousands.

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

We start with an inspection of the home. 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 we have easy access to the exterior of the house . Trim any bushes and move any items that would make it difficult to measure the structure. Indoors, make sure we can get to items like furnaces and water heaters.

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

Written property agreements, such as a maintenance agreement for a shared driveway.
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 upgrades, the amount of their purchase and date of their installation (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
A list of "suggested" improvements when the property is being appraised "as complete".

What is "Market Value?" (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)

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 certainly 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 engages an appraiser directly. In these scenarios, the appraiser may state the purpose of the appraisal; 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)

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!

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 weren't far behind, returning 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.