Rebecca Hawker has answers to "Frequently Asked Questions"


	Rebecca Hawker is always ready to elaborate on any inquiries you might have about appraisals or real estate in Fenton and Genesee County. Contact us today to learn how we can help you with your specific valuation problems.

Define the term "Appraisal"
Describe what an appraiser does
Why would someone require your services?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
Once the appraisal has been completed, what guarantee is there that the value conclusion is legitimate?
What goes into an appraiser's certification?
Who engages the services of appraisers?
Where does an appraiser get the information used to estimate values in Genesee County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal appointment
What is "Market Value?"
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?

Define the term "Appraisal" (See list of FAQ's)

The appraisal process is an estimation that generates an opinion of value. There are three "common approaches to value" which assists the appraiser arrive at this opinion or valuation. One of the methods in use is the Cost Approach, which is what it would cost to replace the improvements to the property, minus age and physical deterioration, plus the land value. The most common approach in finding the value of a home is the Sales Comparison Approach which concerns concluding a comparison to similar houses close by. Being the most common approach, the Sales Comparison Approach tends to be the most precise and best indicator of market value for a home. One of the least common approaches in appraising houses is the Income Approach, which is commonly used to determine the market value of a property based on what an investor would pay based on the income produced by the building.

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

An appraiser generates a professional, unbiased determination of market value, in the support of real property exchanges. Appraisers exhibit their investigation in appraisal reports.

Why would someone require your services? (See list of FAQ's)

There are many reasons to get an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for getting an appraisal include:

If you are applying for a loan.
If you would like to reduce your property tax burden.
To show a homeowner has 30% equity and remove PMI.
To fight improperly assessed property taxes.
To handle an estate.
To provide you a negotiating tool when purchasing a home.
To determine the most probable sales price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Because an official agency such as the IRS requires it.
It's possible you could be involved in a lawsuit - an appraisal will definitely help.

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

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

Appraisers do not do complete house inspections and are not home inspectors. An inspection is a third-party investigation of the livable structure and systems of a home, from the roof to the bottom. The standard home inspector's report will contain an evaluation of the condition 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)? (See list of FAQ's)

Simply put, it's apples and oranges. The CMA depends on vague local market trends. The appraisal is based on similar verifiable comparable sales. The appraisal report will also include area and construction prices. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

The person behind the report is actually 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 bear 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. Moreover, the appraiser is an unbiased party, with no vested interest in the value of a home, unlike the agent, who gets a commission based upon the value of the home.

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

Every report must reflect a credible estimate of value and will document the following:

The client and other intended users.
The intended use of the report.
The appraisal's purpose.
The type of value reported and a definition of the value reported.
The effective date of the appraiser's opinions and conclusions.(Sometimes this is in the past or maybe the future for new construction!)
Pertinent property attributes, including: location, physical description, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible considerations.
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 included in the process of completing the job.

For a more in depth look at the work that goes into an appraisal report click here: Sample Appraisal Report

Once the appraisal has been completed, what guarantee is there that the value conclusion is legitimate? (See list of FAQ's)

In communicating an appraisal report, each appraiser must ensure the following:

That the information analysis contained in the appraisal was proper.

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

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

That a believable, defensible appraisal report was conferred.

There are intense classroom and experience requirements that must be met in order to achieve the title of "licensed appraiser" in Michigan. In addition, appraisers must abide by a strict industry code of ethics and observe national standards of practice for real estate appraisal. The rules for working up an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's) Regulations regarding licensing and certification are different from state to state. However, licensing and certification is most often associated with many hours of classroom study, tests and experience working under a supervisor. Once licensed, he or she is required to take continuing education courses in order to keep the license current. To see the specific requirements for any state click here.

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

Commonly, appraisers are hired by mortgage lenders to render a value opinion on real estate involved in a loan transaction - to make sure the property is truly adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

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

Collecting data is one of the primary functions of an appraiser. Data can be classified as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.

General data is collected from a variety of places. To find out about recent sales to be used as "comps", an appraiser will often use the local Multiple Listing Service. To double-check actual sales prices, we look at items in the assessor's office and other public documents that are usually online nowadays. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood service.

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

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

An appraisal is a worthwhile whenever your home's value is relevant to some financial decision. For those selling a home, you'll want to figure out a price that gets you the most profit but doesn't leave your home on the market too long; 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. A home 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. It protects the lender in case a borrower defaults on the loan and the value of the house is less 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.


	Did you have less than 20% to put down on your mortgage? Contact Rebecca Hawker today at 8109365435. You may be able to get rid of your Private Mortgage Insurance premium.

Should I do anything in advance of the appraisal appointment (See list of FAQ's)

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 condition of its amenities. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house . Trim any landscaping and relocate any items that would get in our way while we measure the structure. Indoors, make sure the appraiser can get to items 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:

Any records on the purchase of the property for the last three years.
List of personal property to be sold with the home.
Most recent real estate tax bill and or legal description of the property.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
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 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)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. 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 included 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 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 do whatever they want with the appraisal.

How can I get the most ROI out of home improvements? (See list of FAQ's)

Like all things real estate, this is dependent on a home's location. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.

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 were second, 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.