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U$ave Realty & Appraisal Services, Inc. has answers to "Frequently Asked Questions"

U$ave Realty & Appraisal Services, Inc. is always ready to handle any concerns you might have about appraisals in Grinnell and Poweshiek County. Don't hesitate to contact us today.

What is an appraisal?
Describe what an appraiser does
What would cause me to request a real estate appraisal?
What is the difference between an appraisal and a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What's in an appraisal report?
Upon completion of the appraisal, what assurance is there that the value conclusion is accurate?
How are appraisers certified?
Who hires an appraiser?
Where does an appraiser get the data used to estimate values in Poweshiek 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?
What does "Market Value" mean?
Who has rights to the appraisal report?
I want to get more for my house. Where should I spend money renovating?



What is an appraisal?   (Go to list of  questions)

The process of creating an appraisal deals with an inspection which leads to an opinion of value. This opinion or estimate is concluded through a formal process that typically uses three "common approaches to value". One of the methods is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, then adding the land value. Another of the methods is the Sales Comparison Approach - which involves finding a comparison to other similar nearby properties which have recently sold. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a home. One of the least common approaches in appraising residential properties is the Income Approach, which is generally used to figure the value of a property based on what an investor would pay based on the capital produced by the building.

Describe what an appraiser does   (Go to list of  questions)

An appraiser provides a fair and credible opinion of market value, in the support of real estate exchanges. Appraisers illustate their expert investigation in appraisal reports.


What would cause me to request a real estate appraisal?   (Go to list of  questions)

There are many reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for ordering an appraisal include:
  • If you are applying for a loan.
  • If you would like to lower your property tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove insurance.
  • To fight inflated property taxes.
  • If you need to take care of an estate.
  • To offer you a leg-up when purchasing real estate.
  • To figure out the most probable price when listing your home.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because a government agency such as the IRS requires it.
  • If you ever find yourself in a civil case.
If you need a more detailed explanation of the appraisal process, please click here.


What is the difference between an appraisal and a home inspection?   (Go to list of  questions)

The appraiser is not a home inspector and he or she does not do a full home inspection. The purpose of a home inspection is to investigate the structure of the property from foundation to rooftop. Generally, a home inspection report will discuss the amenities and the necessities of the house: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and 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 Shakespeare to reality TV. What the CMA depends on are ill-defined trends. An appraisal utilizes comparable sales that can be validated by records. The appraisal report will also contain area and building values. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

The person creating the report is frankly the most significant difference between a CMA and an appraisal. A CMA is written 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 created 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 whereas the appraiser is bound by a code of ethics to accept a flat fee for assignments, regardless of their outcome.

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

Each report must reflect a credible estimate of value and will clearly state the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • The intended use of the appraisal.
  • The appraisal's purpose.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
  • Relevant property characteristics, including: location, physical description, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible factors.
  • Any 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 activity of completing the job.
For a more comprehensive view of all that goes into an appraisal report click here: Sample Appraisal Report


Upon completion of the appraisal, what assurance is there that the value conclusion is accurate?   (Go to list of  questions)

In communicating an appraisal report, each appraiser must ensure the following:
  • The appraisal contained a suitable analysis of the data.

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

  • That appraisal services were provided in a careful and conscientious fashion.

  • The final appraisal report was transparent, sound and not easily discredited.
To become a state licensed appraiser, there are strenuous education requirements as well as experience that must be attained - all with the end goal of gaining the skills required to render unbiased value opinions. In addition, appraisers must abide by a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for carrying out an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Go to list of  questions) Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. In general, licensing and certification typically translates to many hours of coursework, tests and experience working under a supervisory appraiser. Once licensed, he/she is required to take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who hires an appraiser?   (Go to list of  questions)

Mortgage lenders are an appraiser's typical customer, needing their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

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

Gathering data is one of the main tasks an appraiser performs. Data can be classified as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is received from a many places. Local Multiple Listing Services (MLS) provide data on recently sold homes that might be used as comparables. To double-check actual sales prices, we use tax records and other public documents that are usually online nowadays. Appraisers routinely have to report when a property lies 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 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 involved in some sort of financial decision and the value of your home is relevant, you'll want to hire a licensed appraiser. When selling your house, an appraisal helps you set the most appropriate price. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from U$ave Realty & Appraisal Services, Inc. is the best way to ensure assets are split up fairly. Simply put, a house 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?   (Go to list of  questions)

PMI is short for for Private Mortgage Insurance. This added plan protects the lender if a borrower defaults on the loan and the market price of the property is less 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.

Is PMI a lineitem in your monthly house payment?Call U$ave Realty & Appraisal Services, Inc. today at (641)236-5800 or send us an e-mail. A current appraisal could save you thousands.

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

We begin 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. On the home's interior, make sure it is clutter free and that we can get to things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of outside walls.

To help expedite our work plus ensure a more accurate report, try if possible to have the following items:
  • A survey or plot map of the property and building (if 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.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
  • A list of "proposed" improvements when the property is being appraised "as complete".

What does "Market Value" mean?   (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."



Who has rights to the appraisal report?   (Go to list of  questions)

In most real estate transactions, the appraisal is ordered by the lender. 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 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 scenarios, the appraiser may state 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.


I want to get more for my house. Where should I spend money renovating?   (Go to list of  questions)

The added value of a particular amenity truly depends on the local 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.

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 increase the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size.