Kelly Appraisal Service has answers to "Frequently Asked Questions"


	Kelly Appraisal Service is eager to answer any questions you might have about appraisals in San Bernardino County. Feel free to contact us today.

Define the term "Appraisal"
What does an appraiser do?
What are the reasons someone would require services from Kelly Appraisal Service?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
Once the appraisal is done, how can I have certainty that the final number is valid?
What goes into an appraiser's certification?
Who do appraisers work for?
Where does Kelly Appraisal Service get the information used to estimate values in San Bernardino 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?
Define "Market Value"
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?

Define the term "Appraisal" (Go to list of questions)

The process of producing an appraisal consists of an estimation which leads to an opinion of value. There are three "common approaches to value" which assists the appraiser come to this opinion or estimate. The Cost Approach is one of the approaches that real estate appraisers use to find the value of a home; it involves figuring what the improvements would cost without physical deterioration, adding the land value. Another of the processes is the Sales Comparison Approach - which involves discovering a comparable analysis to other similar properties within a close proximity which have recently sold. Being the most commonly used approach, the Sales Comparison Approach is generally the most precise and best indicator of market value for a home. The Income Approach is mainly used for finding 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? (Go to list of questions)

An appraiser provides an objective and well justified opinion of market value, to be used in making real estate transactions. Appraisers exhibit their expert analysis in appraisal reports.

What are the reasons someone would require services from Kelly Appraisal Service? (Go to list of questions)

There are a lot of reasons to order an appraisal from Kelly Appraisal Service with the most common reason being real estate and mortgage transactions. A few other reasons for getting an appraisal include:

To obtain a loan.
To reduce your property taxes.
To demonstrate a homeowner's acquired equity and remove PMI.
To contest high property taxes.
If you need to settle an estate.
To provide you an edge when purchasing a home.
To find a reasonable property value when putting your home on the market.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS need an appraisal on every property.
It's possible you could have to deal with being in a lawsuit - an appraisal will help.

For a more detailed description of the appraisal process click here.

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

Appraisers do not do provide house inspections and are not home inspectors. An inspection is a third-party investigation of the accessible structure and appliances of a home, from the top to the bottom. Commonly, a home inspection report will evaluate the amenities and the requirements of the home: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

Is an appraisal the same as a comparative market analysis(CMA)? (Go to list of questions)

Frankly, it's like comparing opera to country. The CMA relies on indefinite local market trends. An appraisal utilizes comparable sales that can be validated by public record. The appraisal report will also contain area and construction prices. 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.

But the most significant factor is who's doing the report. 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. A certified, state licensed professional who has formed their livelihood on valuing homes in and around San Bernardino County is behind the appraisal. 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 collect only a flat sum for work they perform, regardless of their outcome.

What can I expect to see in my appraisal report? (Go to list of questions)

Each appraisal should reflect a credible estimate of value and should clearly state the following:

The client and whose purposes the appraisal is to serve.
The intended use of the report.
The reason for the assignment.
The type of value contained and a definition of that value.
The effective date of the appraiser's opinions and conclusions.(Sometimes this is in the past or maybe the future for new construction!)
Relevant property characteristics, including: location, physical attributes, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible factors.
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.
The scope of work used while working up the job.

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

Once the appraisal is done, how can I have certainty that the final number is valid? (Go to list of questions)

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

That the information analysis utilized in the appraisal was proper.

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

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

That a trustworthy, supportable appraisal report was communicated.

To become a state licensed appraiser, we must fulfill considerable education and experience requirements that give us the background to formulate an unbiased opinion. Likewise, appraisers must follow a strict industry code of ethics and observe national standards of practice for real estate appraisal. The rules for carrying out 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 is achieved through coursework, tests and real world experience. Once an appraiser is licensed, he or she must then engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who do appraisers work for? (Go to list of questions)

Mortgage lenders are an appraiser's most likely customer, requesting their services to ensure property involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does Kelly Appraisal Service get the information used to estimate values in San Bernardino County or other areas? (Go to list of questions)

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

General data is gathered from a numerous sources. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. To verify actual sales prices, we use 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 most importantly, the appraiser assimilates general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.

Why do I need a professional appraisal? (Go to list of questions)

If you're making some sort of financial decision and the value of your home matters, you'll want to hire a licensed appraiser. When selling your house, 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. For those settling an estate or divorce, an appraisal from Kelly Appraisal Service is the best documentation to ensure assets are divided properly. A home is often the single, largest financial asset anybody owns. Knowing its true value means you can make wise financial decisions.

What exactly is PMI and how can I get rid of it? (Go to list of questions)

PMI stands for Private Mortgage Insurance. This supplementary policy guards the lender in case a borrower is unable to pay on the loan and the value of the home 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.


	Did you have less than 20% to put down on your mortgage? Contact Kelly Appraisal Service today at 7602425040. You may be able to cancel your Private Mortgage Insurance payment.

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

The first step in most appraisals is the home inspection. 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. Inside, pick up any clutter and make sure we can find our way to things like furnaces and water heaters. On the outside, trim any bushes 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 available).
Written property agreements, such as a maintenance easement for a shared driveway.
Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
A list of any 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).
Information on "Homeowners Associations" or condominium covenants and fees.

Define "Market Value" (Go to list of questions)

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."

Does the appraisal belong to the bank or the consumer? (Go to 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 certainly 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.

The exception to this rule is when a home owner hires an appraiser directly. In these situations, the appraiser may state 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 do whatever they want with the appraisal.

Are some home improvements more worthwhile than others? (Go to list of questions)

The added value of a particular amenity truly depends on the local market. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

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 are right up there with kitchens, returning 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.