Metro Appraisers & Consultants has answers to "Frequently Asked Questions"


	Metro Appraisers & Consultants is willing to talk to you about any questions you might have about appraisals in Boys Town and Sarpy County. Contact Metro Appraisers & Consultants today to talk about how we can help you with your valuation problems.

What is an appraisal?
What does an appraiser do?
What would cause me to require services from Metro Appraisers & Consultants?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
Upon completion of the appraisal, how can I have assurance that the value conclusion is valid?
What does it mean for an appraiser to be licensed?
Who engages the services of appraisers?
Where does an appraiser get the data used to estimate values in Sarpy 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?
How does an appraiser define "Market Value"?
Once complete, who actually owns the appraisal report?
Are some home improvements more worthwhile than others?

What is an appraisal? (List of questions)

An appraisal is an estimation that concludes with an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or estimate. The Cost Approach is one of the methods that appraisers use to find value; it involves finding what the improvements would cost less physical degradation, plus the land value. The most common approach in finding the value of a house is the Sales Comparison Approach which involves figuring a comparison to comparable homes close by. The Sales Comparison Approach is commonly the most definitive and clearest indicator of a liklely sales price for a residential property. The Income Approach is generally 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 produce.

What does an appraiser do? (List of questions)

An appraiser provides an objective and well substantiated opinion of market value, in the support of real estate exchanges. Appraisers show their findings in appraisal reports.

What would cause me to require services from Metro Appraisers & Consultants? (List of questions)

There are many reasons to order an appraisal from Metro Appraisers & Consultants with the most common reason being real estate and mortgage transactions. Some other reasons for purchasing an appraisal report include:

To receive 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 Primary Mortgage Insurance.
To fight improperly assessed property taxes.
To settle an estate.
To offer you an edge when purchasing real estate.
To figure out an honest property value when selling your home.
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 require an appraisal on every home.
If you are ever involved in a civil case.

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

How is an appraiser different than a home inspector? (List of questions)

The appraiser is not a home inspector and he or she does not do a full home inspection. An inspection is a third-party evaluation of the available structure and mechanical systems of a house, from the top to the bottom. The stereotypical property inspector's report will include an evaluation of the condition of the house's heating system, 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)? (List of questions)

Frankly, it's like comparing broadband and dial-up. What the CMA depends on are vague trends. The appraisal relies on similar proven comparable sales. In addition, the appraisal looks at other factors like condition, area and building prices. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

Who's creating the report is hands down the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, create CMA's. 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 flat sum for work they perform, regardless of their value conclusion.

What's in an appraisal report? (List of questions)

The main point of an appraisal document is to provide a value opinion, 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.
The type of value reported and a definition of that value.
The effective date of the value opinion.
Relevant property characteristics, including: location, physical characteristics, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible factors.
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 entailed in the activity of completing the appraisal.

For a more comprehensive look at all that goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, how can I have assurance that the value conclusion is valid? (List of questions)

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

The appraisal contained analysis of the information.

Whether individually or collectively, there were no grave errors contained in the appraisal, nor any material details left out.

That appraisal services were done in a careful and cognizant manner.

That a believable, substantiated appraisal report was communicated.

There are intense classroom and practical experience requirements that must be adhered to in order to achieve the status of "licensed appraiser" in Nebraska. Plus, appraisers must follow a meticulous 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).

(List of questions) Licensing and certification requires classroom study, tests and real world experience. Once an appraiser is licensed, he/she is required to engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who engages the services of appraisers? (List of questions)

Most of the time, appraisers are employed by lenders to render a value opinion on a house involved in a loan transaction. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does an appraiser get the data used to estimate values in Sarpy County or other areas? (List of questions)

Gathering information is one of the main tasks an appraiser performs. Data can be classified as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is received from a many places. To find out about recent sales to be used as "comps", we often go to the local Multiple Listing Service. Tax records and other public documents reveal actual sales prices in a market. Appraisers routinely need 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 most importantly, the appraiser assembles general data from his or her past experience in creating appraisals for other properties in the same market.

Why do I need a professional appraisal? (List of questions)

If you're involved in some sort of financial decision and the value of your home is relevant, you'll want an appraisal. 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. 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? (List of questions)

PMI is short for for Private Mortgage Insurance. It protects the lender in the event a borrower is unable to pay on the loan and the value of the home is lower than the balance of the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Has your real estate appreciated since you first purchased? Contact Metro Appraisers & Consultants today at 402-884-2660 to see if you can save money by removing your Private Mortgage Insurance payment.

How do I get ready for the appraiser? (List of questions)

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. Inside, pick up any clutter and make sure we can access things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of exterior walls.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:

A survey or plot map of the property and building (if readily available).
List of personal property to be sold with the building.
Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
Brag sheet that lists major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
A list of "proposed" improvements if the property is to be appraised "as complete".

How does an appraiser define "Market Value"? (List of questions)

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."

Once complete, who actually owns the appraisal report? (List of questions)

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 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.

It's different when it's the homeowner hiring 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 stated otherwise, the home owner can use the appraisal for any purpose.

Are some home improvements more worthwhile than others? (List of questions)

The answer to this is different depending upon the location of the home. For example, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!

As a rule, the best ROI from renovating a home comes in the kitchen. 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 were second, yielding 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.