Frequently Asked Questions
The task of the appraiser is to provide objective, impartial, and unbiased opinions about the value of real property providing assistance to those who own, manage, sell, invest in, and/or lend money on the security of real estate. Appraisers collect a series of facts, statistics, and other information regarding specific properties, analyze this data, and develop opinions of value. Each appraisal assignment challenges the appraiser’s ability to place analytical skills into practice, exercise sound judgment, and communicate effectively.
The physical inspection of the property being appraised can take anywhere from thirty minutes to several hours; depending upon the size and complexity involved. After the physical inspection, the appraiser spends time researching the property’s neighborhood in search of comparable sales, linkages, overall location characteristics, shared roadways and forces that effect values. When the field work is done, the appraiser finalizes the appraisal report.
If your down payment is less than 20% of the total value of your loan, the lender may require you to pay private mortgage insurance. Your monthly insurance payments are added to your monthly mortgage payment. This is the bank’s way of protecting their loan in the event that the buyer defaults on their primary mortgage.
There are three ways your home will increase in value; appreciation, improvements made to the home or by paying down the principal balance of the mortgage (or any combination of the three). You can request in writing from the lender that the private mortgage insurance be canceled. You can also write a letter to the insurance company and ask them to cancel your PMI coverage as soon as you reach 20% equity. In order to cancel the PMI, you’ll need to convince the lender and/or private insurance that your home has minimum 20% equity, and in most cases the necessary proof is a (state) certified appraisal on the appropriate form.
The appraisal is not a substitute for home inspection. An appraiser is not a home inspector, engineer, architect, or a contractor. The appraiser walks through the property to develop a general impression of the interior/exterior condition of the residential property. The appraiser will often ask the owner questions regarding the interior and/or exterior of the property and its condition.
An appraiser looks at the interior/exterior condition of the property, floor plan layout, functional rooms, degree of modernization -such as updates and/or renovations-, as well as quality of construction. The appraiser will measure the exterior of the house to estimate the gross living area. Non-living areas such as screened porches and garages are calculated separately from the gross living area.
Improvements can add to the market value to your home; typically called as a ‘contributory value’. Contributory value will vary from market to market depending on the reactions of buyers and sellers of every neighborhood. A professional local appraiser can determine the contributory value of any improvement.