Whittaker Realty Appraisals has answers to "Frequently Asked Questions"


	Whittaker Realty Appraisals is eager to elaborate on any concerns you might have about appraisals or real estate in Middlesex County. Contact Whittaker Realty Appraisals today to see how we can help solve your valuation problems.

What is an appraisal?
Describe what an appraiser does
Why would someone request services from Whittaker Realty Appraisals?
What is the difference between an appraisal and a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What does the appraisal report contain?
Once the report has been completed, how can I have confidence that the value conclusion is valid?
How are appraisers certified?
Who hires Whittaker Realty Appraisals
Where does an appraiser get the data used to estimate values in Middlesex 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?
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?

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

An appraiser performs an evaluation that generates an opinion of value. This opinion or estimate is concluded using a formal method that generally uses the three main "common approaches to value". The Cost Approach is one of the approaches that appraisers use to find the value of a house; it involves figuring what the improvements would cost less physical deterioration, adding the land value. Easily the most common approach in finding the value of a home is the Sales Comparison Approach which concerns figuring a comparison to comparable homes nearby. The Sales Comparison Approach is normally the most definitive and best indicator of value for a home. The Income Approach is generally used for determining the market value of income-producing properties based on what an investor would pay based on the amount of income a property produce.

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

An appraiser produces a professional, unbiased determination of market value, often in the context of a real estate sale. Appraisers summarize their expert analysis in appraisal reports.

Why would someone request services from Whittaker Realty Appraisals? (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 get a loan.
To lower your property taxes.
To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
To challenge improperly assessed property taxes.
If you need to take care of an estate.
To give you a leg-up when purchasing a home.
To determine an honest price when selling real estate.
To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
Because a government agency such as the IRS requires it.
It's possible you could be involved in a lawsuit - an appraisal will definitely help.

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

What is the difference between an appraisal and a home inspection? (See list of FAQ's)

The appraiser is not a home inspector and he or she does not do a complete home inspection. An inspection is a third-party investigation of the accessible structure and appliances of a property, from the roof to the bottom. Usually, a home inspection report will discuss the amenities and the requirements of the house: 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, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

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

To be honest, they share nothing in common. What the CMA relies upon are vague trends. Appraisals use comparable sales which are verifiable resources. In addition, the appraisal verifies other factors like condition, neighborhood and replacement costs. All a CMA does is generate a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

The person creating the report is frankly the most significant difference between a CMA and an appraisal. A CMA is created by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. The appraisal is created 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 whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon fee for assignments, regardless of their outcome.

What does the appraisal report contain? (See list of FAQ's)

The main point of an appraisal report is to give a value opinion, and depending on the scope of the report, one will customarily see the following:

Who engaged the appraiser and other intended users.
How the appraisal is supposed to be used.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the value opinion.
Pertinent property characteristics, including: location, physical attributes, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible items.
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 used while working up the appraisal.

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

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

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

The appraisal contained an apropos analysis of the data.

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

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

That a believable, defensible appraisal report was conferred.

To become a state licensed appraiser, there are intense education requirements as well as practical experience that must be logged - all with the end goal of gaining the skills required to provide unbiased value opinions. Plus, appraisers must abide by a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for developing 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 takes classroom study, tests and real world experience. Once licensed, he or 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 hires Whittaker Realty Appraisals (See list of FAQ's)

Mortgage lenders are an appraiser's typical customer, requesting their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

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

One of the primary things an appraiser does is to assimilate property data. Data can be categorized as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.

General data is gathered from a numerous places. To research recent sales to be used as "comps", an appraiser will often use the local Multiple Listing Service. Tax records and other public documents verify actual sales prices in a market. Appraisers often have to report when a property lies in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And last but not least, the appraiser assembles 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)

An appraisal is a valuable tool whenever the value of your home is pertinent to some financial decision. When selling your home, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. 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. 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. This added policy protects the lender in case a borrower defaults on the loan and the value of the house is lower than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Has your home value appreciated since you first purchased? Call Whittaker Realty Appraisals today at 732-947-6737. You may be able to save money by removing your Private Mortgage Insurance payment.

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

We begin with an inspection of the property. 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 condition of its amenities. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house . Trim any bushes and relocate any items that would get in our way while we measure the structure. On the inside, 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 information on the purchase of the property for the last three years.
Information on any written private easements, such as a shared driveway with a neighbor.
Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
A list of "proposed" improvements when the property is being 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."

Who has rights to the appraisal report? (See list of FAQ's)

In most real estate transactions, the appraisal is ordered by the lender. 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 certainly entitled to a copy of the report - 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 engages an appraiser directly. In these situations, the appraiser may stipulate 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 use the appraisal for any purpose.

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

Like all things real estate, this is dependent on a home's location. 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. 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, yielding 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.