Community Appraisal Services has answers to "Frequently Asked Questions"


	Community Appraisal Services is always happy to talk to you about any questions you might have about appraisals or real estate in Allegheny County. Contact Community Appraisal Services today to talk about how we can help solve your valuation problems.

Describe an appraisal
Describe what an appraiser does
What are the reasons someone would request services from Community 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 has been delivered, what assurance is there that the value indicated is valid?
How hard is it to become certified?
Who engages the services of appraisers?
Where does an appraiser get the information used to estimate values in Allegheny County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
How do I get ready for the appraiser?
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
Which home renovations add the most to the price?

Describe an appraisal (See list of FAQ's)

The appraisal process is an estimation that leads to an opinion of value. The appraiser must use a number of "approaches," typically three, to arrive at the estimation of market value. The Cost Approach is one of the methods that real estate appraisers use to find the value of a property; it involves discerning what the improvements would cost without physical depreciation, plus the land value. Another of the approaches is the Sales Comparison Approach - which involves making a comparable analysis to other similar nearby properties which have recently sold. The Sales Comparison Approach is normally the most definitive and best indicator of a liklely sales price for a home. The third approach is the Income Approach, which is the best method in appraising income producing properties - it deals with estimating what an investor would pay based on the income produced by the property.

Describe what an appraiser does (See list of FAQ's)

An appraiser produces a professional, unbiased assessment of market value, often in the context of a real estate exchange. Appraisers illustate their expert analysis in appraisal reports.

What are the reasons someone would request services from Community Appraisal Services? (See list of FAQ's)

There are many reasons to get an appraisal from Community Appraisal Services with the most common reason being real estate and mortgage transactions. Some other reasons for ordering an appraisal include:

If you are applying for a loan.
To reduce your property taxes.
To demonstrate a homeowner's acquired equity and remove PMI.
To contest improperly assessed property taxes.
If you need to settle an estate.
To give you a leg-up when purchasing real estate.
To find the most probable property value 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 need an appraisal on every home.
It's possible you could be involved in a lawsuit - an appraisal will help.

Click here for a more detailed explanation of the process involved in getting an appraisal.

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

Home inspectors do not provide an opinion of value and do not do appraisal reports. An inspection is a third-party investigation of the livable structure and systems of a home, from the roof to the bottom. Generally, a home inspection report will evaluate the amenities and the necessities of the house: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural integrity 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)

Simply put, it's night and day. The CMA utilizes market trends to generate most of their business. Appraisals use similar sales which are verifiable resources. The appraisal report will also contain location and construction prices. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

Who's creating the report is actually the most significant 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. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept 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)

The main objective of an appraisal report is to give a value opinion, and depending on the scope of the report, you'll usually see the following:

The client and other intended users.
The intended use of the appraisal.
The appraisal's purpose.
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!)
Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the appraisal, 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 the like.
Division of interest, such as fractional interest, physical segment and partial holding.
The scope of work considered to complete the job.

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

Once the report has been delivered, what assurance is there that the value indicated is valid? (See list of FAQ's)

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

The appraisal used an apropos analysis of the information.

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

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

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

To become a state licensed appraiser, we must fulfill extensive education and experience requirements that enable us to formulate an unbiased opinion. Likewise, appraisers must abide by a strict industry code of ethics and observe national standards of practice for real estate appraisal. The rules 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 vary from state to state. However, licensing and certification is commonly associated with many hours of classroom study, tests and practical experience. Once an appraiser is licensed, he/she is required to engage in continuing education courses so the license stays up to date. 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 customer, using 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 in litigation cases, tax matters and investment decisions.

Where does an appraiser get the information used to estimate values in Allegheny County or other areas? (See list of FAQ's)

One of the most important tasks an appraiser performs is to collect property data. Data can be described as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.

General data is gathered from a number of places. To find out about recently sold homes to be used as "comps", we often use the local Multiple Listing Service. To verify actual sales prices, we use items in the assessor's office and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood system.

And most importantly, the appraiser gathers general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.

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

An appraisal is a worthwhile anytime your home's value is relevant to some financial decision. If you're selling your house, an appraisal assists you in setting the most appropriate price. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from Community Appraisal Services is the best documentation to ensure assets are split up evenly. A home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making wise financial decisions.

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. This additional policy takes care of the lender in case a borrower doesn't pay on the loan and the market price of the property is lower than what the borrower still owes on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Is PMI a lineitem in your monthly mortgage payment?Call Community Appraisal Services today at 412-835-3892 or send us an e-mail. Documentation of your home's current value could save you thousands.

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. The best thing you can do to help is make 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 get in our way while we measure the structure. Indoors, make sure the appraiser can easily access appliances like furnaces and water heaters.

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

A plot plan or survey of the house and land (if available).
A list of any personal property that is part of the home and you intend to be sold with the home, such as a oven, or a washer and dryer, if applicable.
Title policy that describes encroachments or easements.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .

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)

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 appraisal - it's usually bundled with all the other closing documents - but is not entitled 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 cases, the appraiser may state the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.

Which home renovations add the most to the price? (See list of FAQ's)

It really depends on the market. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.