Wise Appraisal Services has answers to "Frequently Asked Questions"

Wise Appraisal Services is always eager to handle any questions you might have about appraisals in Lancaster County. Contact us today to see how we can help you with your valuation problems.

Describe an appraisal
What does an appraiser do?
What are the reasons I would need services from Wise Appraisal Services?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What's in an appraisal report?
Once the appraisal has been delivered, how can I have a guarantee that the value conclusion is accurate?
What goes into an appraiser's certification?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in Lancaster County or other areas?
How can a licensed appraiser help me?
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"?
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?



Describe an appraisal   (Go to list of  questions)

The process of writing an appraisal consists of an investigation which leads to an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or valuation. 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 minus physical depreciation, adding the land value. Another of the approaches is the Sales Comparison Approach - which involves finding 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 clearest indicator of value for a residential property. The Income Approach is primarily 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 produce.

What does an appraiser do?   (Go to list of  questions)

An appraiser provides an unbiased and well supported determination of market value, in the support of real estate transactions. Appraisers illustate their expert investigation in appraisal reports.


What are the reasons I would need services from Wise Appraisal Services?   (Go to list of  questions)

There are many reasons to obtain an appraisal from Wise Appraisal Services with the usual reason being real estate and mortgage transactions. Other reasons for obtaining an appraisal report include:
  • To get a loan.
  • To lower your property taxes.
  • To build a case for a homeowner's equity and remove PMI.
  • To challenge improperly assessed property taxes.
  • To settle an estate.
  • To give you a negotiating tool when purchasing a home.
  • To determine the most probable sales price when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • 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 detailed explanation of the appraisal process click here.


How is an appraiser different than a home inspector?   (Go to list of  questions)

Home inspectors do not generate an opinion of value and do not use the same forms as appraisers. The purpose of a home inspection is to investigate the structure of the house from bottom to rooftop. For the most part, a home inspection report will discuss the amenities and the requirements of the house: air conditioning (weather permitting), electrical functions, 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 other visible structures.

My agent performed a CMA for me. Is that the same as an appraisal?   (Go to list of  questions)

Simply put, it's like comparing sugar and saccharin. The CMA relies on vague market trends. An appraisal utilizes comparable sales that can be verified by public record. The appraisal report will also include neighborhood and building prices. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

The person creating the report is frankly 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, generate CMA's. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Moreover, the appraiser is an unbiased voice, with no vested interest in the value of a home, unlike the real estate agent, who gets a commission based upon the price of the home.

What's in an appraisal report?   (Go to list of  questions)

The main point of an appraisal document is to give a value opinion, and depending on the scope of the report, one will customarily see the following:
  • The client and whose purposes the appraisal is to serve.
  • The intended use of the report.
  • The appraisal's purpose.
  • The type of value contained and a definition of the value reported.
  • The effective date of the appraiser's opinions and conclusions.
  • Pertinent property attributes, including: location, physical description, legal attributes, economic factors, the property rights valued, and non-real estate items included in the valuation, such as personal property, trade fixtures 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 entailed in the activity of completing the assignment.
For a more in depth look at all that goes into an appraisal report click here: Sample Appraisal Report

Once the appraisal has been delivered, how can I have a guarantee that the value conclusion is accurate?   (Go to list of  questions)

In communicating an appraisal report, each appraiser must ensure the following:
  • The appraisal used an appropriate analysis of the information.

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

  • That appraisal services were not carried out in a careless or negligent manner.

  • The final appraisal report was easy to explain, legitimate and not easily discredited.
To become a state licensed appraiser, there are education requirements as well as experience that must be attained. Plus, appraisers must abide by a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Go to list of  questions) Licensing and certification requires coursework, tests and real world experience. Once 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?   (Go to list of  questions)

Commonly, appraisers are employed by lenders to estimate the value of a house involved in a loan transaction - to make sure the real estate is indeed adequate collateral for the loan. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does an appraiser get the information used to estimate values in Lancaster County or other areas?   (Go to list of  questions)

One of the main things an appraiser does is to collect property data. 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 gathered from a variety of places. To look up recently sold homes to be used as "comps", an appraiser will typically use the local Multiple Listing Service. Tax records and other public documents verify actual sales prices in a market. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood servers.

And most importantly, the appraiser gathers general data from his or her past experience in creating appraisals for other houses in the same market.

How can a licensed appraiser help me?   (Go to list of  questions)

If you're making some sort of financial decision and the value of your home is relevant, you'll want a full appraisal. If you're selling your home, an appraisal assists you in setting the most appropriate price. When buying, you can avoid overpaying by commissioning 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?   (Go to list of  questions)

PMI is the common abbreviation for for Private Mortgage Insurance. This supplementary plan protects the lender in case a borrower defaults on the loan and the market price 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.

Is PMI something increasing your monthly mortgage payment?Call Wise Appraisal Services today at 7178983450 or send us an e-mail. Documentation of your home's present value could save you thousands.

How do I get ready for the appraiser?   (Go to list of  questions)

We start with an inspection of the home. During this process, we 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. The best thing you can do to help is make sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any shrubs and move any items that would make it difficult to measure the structure. On the inside, make sure we can easily access appliances like furnaces and water heaters.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
  • Information on the latest purchase of the property in 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 wells.
  • Find copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.

How does an appraiser define "Market Value"?   (Go to 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."

Does the appraisal belong to the bank or the consumer?   (Go to list of  questions)

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 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 engaging the appraiser for things outside securing a mortgage. In these situations, the appraiser may stipulate the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can use the appraisal for any purpose.

How can I get the most ROI out of home improvements?   (Go to list of  questions)

It really depends on the market. 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 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 are right up there with kitchens, returning 85%. Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size.