ALLIED REAL ESTATE APPRAISERS, INC. has answers to "Frequently Asked Questions"


	ALLIED REAL ESTATE APPRAISERS, INC. is always willing to answer any questions you might have about appraisals or real estate in Genesee County. Feel free to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
What would cause me to request services from ALLIED REAL ESTATE APPRAISERS, INC.?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
After completing the report, how can I have a guarantee that the value conclusion is accurate?
How are appraisers certified?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in Genesee County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
Define "Market Value"
Once complete, who actually owns the appraisal report?
Which home renovations add the most to the price?

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

The method of creating an appraisal consists of an evaluation which leads to an opinion of value. The appraiser will typically use a several "approaches," typically three, to draw up the estimation of market value. One of them is the Cost Approach - which is how much it would cost to replace the improvements, less physical deterioration and other factors, then adding the land value. Another of the methods is the Sales Comparison Approach - which concerns making a comparable analysis to other similar properties within a close proximity which have recently sold. The Sales Comparison Approach is commonly the most accurate and best indicator of a liklely sales price for a residential property. The Income Approach is generally used for finding the market value of income-producing properties based on what an investor would pay based on the amount of income a property would bring in.

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

An appraiser forumlates a professional, unbiased determination of market value, often in the context of a real estate purchase. Appraisers present their expert conclusions in appraisal reports.

What would cause me to request services from ALLIED REAL ESTATE APPRAISERS, INC.? (See list of FAQ's)

There are a lot of reasons to get an appraisal from ALLIED REAL ESTATE APPRAISERS, INC. with the most common reason being real estate and mortgage transactions. A few other reasons for getting an appraisal report include:

To receive a loan.
If you would like to reduce your property tax obligations.
To show a homeowner has 30% equity and remove PMI.
To fight high property taxes.
To handle an estate.
To offer you a negotiating tool when purchasing a home.
To determine the most probable price when selling real estate.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS require an appraisal on every home.
It's possible you could be involved in a lawsuit - an appraisal will 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. The point of a home inspection is to evaluate the structure of the property from foundation to attic. Generally, a home inspection report will discuss the amenities and the requirements of the home: 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, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

Is an appraisal the same as a comparative market analysis(CMA)? (See list of FAQ's)

Honestly, they share nothing in common. What the CMA relies upon are superficial trends. The appraisal relies on similar proven comparable sales. Location and construction prices are also a priority in an appraisal. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

Who's creating the report is actually 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 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 assignments, regardless of their value conclusion.

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

Every report should reflect a believable value opinion and will clearly state the following:

The client and other intended users.
How the appraisal is supposed to be used.
The appraisal's purpose.
The type of value reported and a definition of that value.
The effective date of the appraiser's opinions and conclusions.
Relevant property characteristics, including: location, physical characteristics, 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 the like.
Division of interest, such as fractional interest, physical segment and partial holding.
What was involved in the process of completing the appraisal.

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

After completing the report, how can I have a guarantee that the value conclusion is accurate? (See list of FAQ's)

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

That the information analysis implemented in the appraisal was suitable.

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

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

That a believable, defensible appraisal report was conferred.

There are intense education and on the job experience requirements that must be fulfilled in order to get an appraisal license in Michigan. In addition, appraisers must follow a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines 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 coursework, tests and practical experience. Once an appraiser is licensed, he or 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 are an appraiser's customers? (See list of FAQ's)

Typically, appraisers are hired by mortgage lenders to render a value opinion on property involved in a loan transaction. 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)

Compiling information is one of the primary roles 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 specific data are noted by the appraiser during an inspection.

General data is received from a number of sources. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. To verify actual sales prices, we research tax records and other public documents. Appraisers often have to report when a property is in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

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

What can a full appraisal do for me? (See list of FAQ's)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. For those selling a home, you'll want to determine a price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; 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? (See list of FAQ's)

PMI stands for Private Mortgage Insurance. PMI takes care of the lender in the event a borrower defaults on the loan and the value of the house is lower than what the borrower still owes on the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.


	The savings from cancelling your PMI will make up for the price of the appraisal in a matter of months. Nobody is more qualified than ALLIED REAL ESTATE APPRAISERS, INC. when it comes to analyzing real estate appreciation in Flint and Genesee County. Contact us today.

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

The first step in most appraisals is the home 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. 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 landscaping 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 accuracy of the appraisal report by having the following things on hand:

A survey or plot map of the property and building (if readily available).
Written property agreements, such as a maintenance easement for a shared driveway.
A bill for your most recent real estate taxes which should also contain a legal description of the property.
A list of any major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .

Define "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."

Once complete, who actually owns the appraisal report? (See list of FAQ's)

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 allowed to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner hires an appraiser directly. In these cases, the appraiser may define how the appraisal can be used; 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.

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

A home's location - what city it is in and even what part of that city - is key to this popular question. 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.

As a rule, the most value returned 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 weren't far behind, returning 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.