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Dependable Real Estate Appraisers has answers to "Frequently Asked Questions"

Dependable Real Estate Appraisers is always eager to answer any concerns you might have about appraisals in Bayonne and Hudson County. Don't hesitate to contact us today.

Describe an appraisal
Describe what an appraiser does
What would cause me to require services from Dependable Real Estate Appraisers?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
Upon completion of the report, what guarantee is there that the value indicated is veritable?
How hard is it to become certified?
Who hires an appraiser?
Where does an appraiser get the information used to estimate values in Hudson County or other areas?
How can a licensed appraiser help 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
Define "Market Value"
Who actually owns the appraisal report?
How can I get the most ROI out of home improvements?



Describe an appraisal   (Return to top)

An appraiser performs an estimation that produces an opinion of value. There are three "common approaches to value" which assists the appraiser come to this opinion or estimate. One of the methods in use is the Cost Approach, which finds what it would cost to restore the improvements to the home, minus depreciation and physical dilapidation, adding the land value. Easily the most common approach in figuring the value of a home is the Sales Comparison Approach which deals with concluding a comparison to similar houses close by. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a home. One of the least common approaches in appraising houses is the Income Approach, which is commonly used to figure the value of a property based on what an investor would pay based on the income produced by the property.

Describe what an appraiser does   (Return to top)

An appraiser provides a fair and credible assessment of market value, often in the context of a real estate sale. Appraisers exhibit their expert findings in appraisal reports.


What would cause me to require services from Dependable Real Estate Appraisers?   (Return to top)

There are a lot of reasons to obtain an appraisal from Dependable Real Estate Appraisers with the usual reason being real estate and mortgage transactions. Other reasons for purchasing an appraisal report include:
  • To get a loan.
  • If you would like to lower your property tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove Primary Mortgage Insurance.
  • To fight improperly assessed property taxes.
  • To handle an estate.
  • To give you a leg-up when purchasing real estate.
  • To determine a likely sales price when listing your home.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because a government agency such as the IRS requires it.
  • If you ever find yourself in a lawsuit.
If you need more information about the appraisal process, please click here.


Is an appraisal the same as a home inspection?   (Return to top)

Home inspectors do not come to an opinion of value and do not do appraisal reports. The purpose of a home inspection is to evaluate the structure of the home from bottom to top. The standard property inspector's report will contain an evaluation of the integrity of the house's heating systems, 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.

Is an appraisal the same as a comparative market analysis(CMA)?   (Return to top)

To be blunt, it's apples and oranges. The CMA depends on indistinct trends in the market. Appraisals use comparable sales which are valid resources. In addition, the appraisal looks at other factors like condition, neighborhood and construction prices. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the largest differentiator 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. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Further, the appraiser is an independent voice, with no conditional interest in the value of a home, unlike the agent, whose income is tied to the price of the home.

What can I expect to see in my appraisal report?   (Return to top)

The main purpose 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 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 description, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible considerations.
  • Any 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 involved in the activity of completing the job.
For a more detailed view of the work that goes into an appraisal report click here: Sample Appraisal Report


Upon completion of the report, what guarantee is there that the value indicated is veritable?   (Return to top)

In the documentation of an appraisal, each appraiser must ensure the following:
  • That the information analysis implemented in the appraisal was appropriate.

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

  • That appraisal services were done in a careful and cognizant fashion.

  • That a credible, supportable appraisal report was imparted.
To become a state licensed appraiser, we must fulfill intense education and experience requirements that prepare us to formulate an unbiased opinion. Plus, appraisers must follow a strict industry code of ethics and observe national standards of practice for real estate appraisal. The rules for carrying out an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Return to top) Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. In general, licensing and certification is commonly associated with many hours of classroom study, tests and practical experience. Once licensed, he or she is required to complete continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who hires an appraiser?   (Return to top)

Commonly, appraisers are called upon by mortgage lenders to estimate the value of a home involved in a loan transaction - to make sure the property is indeed adequate collateral for the loan. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does an appraiser get the information used to estimate values in Hudson County or other areas?   (Return to top)

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

General data is collected from a number of places. Local Multiple Listing Services (MLS) provide information on recently sold homes that might be used as comparables. To double-check actual sales prices, we look at tax records and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood servers.

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


How can a licensed appraiser help me?   (Return to top)

An appraisal is a valuable tool anytime the value of your home is pertinent to a financial decision. When selling your house, an appraisal assists you in setting the most appropriate price. When buying, be sure you're not overpaying by getting an independent appraisal. For people settling an estate or divorce, an appraisal from Dependable Real Estate Appraisers is the best documentation to ensure assets are divided evenly. A house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making informed financial decisions.


My mortgage statement has an item on it for PMI? Can I get rid of that?   (Return to top)

PMI is short for for Private Mortgage Insurance. This added policy guards the lender in the event a borrower defaults on the loan and the market price of the home is less than the loan balance. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.

The savings from dropping the PMI required when you got your mortgage pays for the appraisal in no time. Dependable Real Estate Appraisers is in the business of tracking value trends in Bayonne and Hudson County. Contact us today.

Should I do anything in advance of the appraisal appointment   (Return to top)

The first step in most appraisals is the property 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 status of its features. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house . Trim any shrubs and move any items that would make it difficult to measure the structure. Indoors, make sure we can easily access items like furnaces and water heaters.

You can make our visit go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • Any records on the purchase of the property for the last three years.
  • Title policy that describes encroachments or easements.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
  • A list of any major home improvements and enhancements, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
  • Most recent real estate tax bill from Hudson and or legal description of the property.

Define "Market Value"   (Return to top)

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?   (Return to top)

For mortgage transactions, the lender orders 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 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 hiring the appraiser for things outside securing a mortgage. In these situations, the appraiser may state how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can do whatever they want with the appraisal.


How can I get the most ROI out of home improvements?   (Return to top)

The added value of a particular amenity truly depends on the local market. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

As a rule, the best ROI 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 help the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.