WHITE APPRAISAL SERVICE has answers to "Frequently Asked Questions"


	WHITE APPRAISAL SERVICE is willing to talk to you about any questions you might have about appraisals or real estate in Franklin Counties. Contact WHITE APPRAISAL SERVICE today to see how we can help solve your specific valuation problems.

Describe an appraisal
Describe what an appraiser does
Why would I need 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 are the contents of an appraisal report?
Once the report is done, how can I have confidence that the final number is veritable?
How are appraisers certified?
Who employs appraisers?
Where does an appraiser get the information used to estimate values in Franklin Counties or other areas?
Why should I hire a licensed appraiser?
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?

Describe an appraisal (Go to list of questions)

The appraisal process is an evaluation that generates an opinion of value. There are three "common approaches to value" which assists the appraiser arrive at this opinion or estimate. One of the processes 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 deals with making a comparison to other similar properties within a close proximity which have recently sold. Being the most commonly used approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a home. The Income Approach is generally used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in.

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

An appraiser forumlates a professional, unbiased determination of market value, to be used in making real estate transactions. Appraisers demonstrate their professional findings in appraisal reports.

Why would I need a real estate appraisal? (Go to list of questions)

There are many reasons to get an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for purchasing an appraisal include:

If you are applying for a loan.
To reduce your tax burden.
To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
To challenge high property taxes.
To settle an estate.
To give you a negotiating tool when purchasing a home.
To determine a likely price when putting your home on the market.
To ensure parties are provided just compensation in eminient domain cases.
Because an official agency such as the IRS requires it.
It's possible you could be involved in a lawsuit - an appraisal will help.

For a more detailed description of the appraisal process 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 nor does he/she do a comprehensive home inspection. The purpose of a home inspection is to investigate the structure of the home from basement to attic. For the most part, a home inspection report will evaluate the amenities and the requirements of the house: 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, exposed 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 night and day. The CMA depends on indefinite market trends. The appraisal depends on specific definite comparable sales. Area and construction prices are also precedent in an appraisal. 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.

But the biggest difference is who's behind the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA's. A certified, Massachusetts licensed professional who bases a career on valuing homes in and around Franklin Counties creates the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon fee for work they perform, regardless of their outcome.

What are the contents of an appraisal report? (Go to list of questions)

The main point of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, you'll usually see the following:

Who engaged the appraiser and other intended users.
How the appraisal is supposed to be used.
The purpose of the assignment.
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!)
Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible items.
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.
The scope of work used when completing the appraisal.

For a more detailed look at what goes into an appraisal report click here: Sample Appraisal Report

Once the report is done, how can I have confidence that the final number is veritable? (Go to list of questions)

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

The appraisal used a suitable analysis of the information.

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

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

The final appraisal report was clear, sound and not easily discredited.

There are intense classroom and on the job experience requirements that must be fulfilled in order to get an appraisal license in Massachusetts. Plus, appraisers must stick to a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The rules for carrying out an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Go to list of questions) Regulations regarding licensing and certification vary from state to state. In general, licensing and certification typically translates to many hours of classroom study, tests and real world experience. Once an appraiser is licensed, he/she must then engage in continuing education courses so the license remains up to date. To see the specific requirements for any state click here.

Who employs appraisers? (Go to list of questions)

Commonly, appraisers are called upon by mortgage lenders to estimate the value of a house involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

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

Compiling data is one of the main things an appraiser does. Data can be described as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.

General data is received from a variety of sources. To find out about recent sales to be used as "comps", we typically use the local Multiple Listing Service. Tax records and other public documents verify actual sales prices in a market. Appraisers often 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 last but not least, the appraiser assembles general data from his or her past experience in creating appraisals for other houses in the same market.

Why should I hire a licensed appraiser? (Go to list of questions)

An appraisal is a worthwhile anytime the value of your home is relevant to a financial decision. For those selling a home, you'll want to determine the 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 home 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 an acronym for Private Mortgage Insurance. This supplementary plan protects the lender in the event a borrower defaults on the loan and the value of the property is lower than what is owed on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Did you secure your mortgage with less than 20% down? Call WHITE APPRAISAL SERVICE today at 413-244-3610 to see if you can 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 property inspection. During this process, the appraiser 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 bushes and relocate any items that would get in our way while we measure the structure. Indoors, make sure we can get to items 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:

A plot plan or survey of the house and land (if available).
A list of any personal property that will be left behind and sold with the home, such as an oven, or a washer and dryer, if applicable.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
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).
A bill for your most recent real estate taxes which should also contain a legal description of the property.

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)

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 included with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

This rule doesn't apply when a home owner engages an appraiser directly. 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 noted 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, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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, yielding 85%. Adding bedrooms and baths can also boost the value of your home (when done well) as long as your home doesn't then become an oddball for your neighborhood in terms of size.