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Adams Appraisal Service, Inc. has answers to "Frequently Asked Questions"

Adams Appraisal Service, Inc. is prepared to elaborate on any inquiries you might have about appraisals or real estate in Yuba County. Contact us today to see how we can help you with your valuation problems.

Define the term "Appraisal"
What does an appraiser do?
What would cause me to need services from Adams Appraisal Service, Inc.?
How is an appraisal different than 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 appraisal has been delivered, how can I have certainty that the value indicated is veritable?
How are appraisers certified?
Who are an appraiser's customers?
Where does Adams Appraisal Service, Inc. get the data used to estimate values in Yuba 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?
What is "Market Value?"
Once complete, who actually owns the appraisal report?
How can I get the most ROI out of home improvements?



Define the term "Appraisal"   (Return to top)

The appraisal process is an estimation that produces an opinion of value. This opinion or estimate is figured using a formal method that generally uses three "common approaches to value". One of the methods is the Cost Approach - which is how much it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value. The Sales Comparison Approach involves finding similar houses in the vicinity and discerning value based on comparing those homes to the property being appraised. Being the most common approach, the Sales Comparison Approach is generally the most precise and best indicator of market value for a home. The Income Approach is generally used for determining 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?   (Return to top)

An appraiser produces a fair and credible opinion of market value, to be used in making real estate transactions. Appraisers exhibit their professional findings in appraisal reports.


What would cause me to need services from Adams Appraisal Service, Inc.?   (Return to top)

There are many reasons to get an appraisal from Adams Appraisal Service, Inc. with the most common reason being real estate and mortgage transactions. Other reasons for obtaining an appraisal report include:
  • To get a loan.
  • If you would like to lower your property tax burden.
  • To demonstrate a homeowner's acquired equity and remove PMI.
  • To contest inflated property taxes.
  • To handle an estate.
  • To give you a negotiating tool when purchasing a home.
  • To find a likely sales price when selling your home.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS need an appraisal on every property.
  • If you are ever involved in a civil case.
For a more extensive explanation of the appraisal process click here.


How is an appraisal different than a home inspection?   (Return to top)

Home inspectors do not generate an opinion of value and are not appraisers. An inspection is a third-party evaluation of the livable structure and mechanical systems of a house, from the roof to the bottom. The usual house inspector's report will include an evaluation of the condition of the property's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

My agent performed a CMA for me. Is that the same as an appraisal?   (Return to top)

To be blunt, it's like comparing sugar and saccharin. What the CMA relies upon are vague trends. An appraisal is based on comparable sales that can be validated by public record. Area and architectural prices are also precedent in an appraisal. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the most significant factor is the person doing the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, generate CMA's. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Further, the appraiser is an independent party, with no vested interest in the value of a home, unlike the real estate agent, whose income is tied to the value of the home.

What are the contents of an appraisal report?   (Return to top)

Every appraisal must indicate a supported estimate of value and will clearly state the following:
  • The client and other intended users.
  • How the appraisal is supposed to be used.
  • The reason for 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 attributes, the property rights 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 factors.
  • All 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 considered when completing the appraisal.
For a more detailed view of the work that goes into an appraisal report click here: Sample Appraisal Report


Once the appraisal has been delivered, how can I have certainty that the value indicated is veritable?   (Return to top)

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

  • Whether individually or collectively, there were no crucial errors contained in the appraisal, nor any relevant details left out.

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

  • The final appraisal report was clear, credible and defensible.
There are rigorous classroom and practical experience requirements that must be met in order to become a licensed appraiser in California. In addition, appraisers must obey a strict industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for working up an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Return to top) Licensing and certification requires classroom study, tests and real world experience. Once an appraiser is licensed, he/she must then take 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?   (Return to top)

Most of the time, appraisers are called upon by mortgage lenders to render a value opinion on real estate involved in a loan transaction - to make sure the house is truly adequate collateral for the loan. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does Adams Appraisal Service, Inc. get the data used to estimate values in Yuba County or other areas?   (Return to top)

One of the most important tasks an appraiser engages in is to assimilate data. Data can be divided into Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specifics are documented 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 courthouse documents verify actual sales prices in a market. Appraisers often have to report when a property is 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 collective knowledge gained from doing assignments for other houses in the same market.


How can a licensed appraiser help me?   (Return to top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. When selling your house, an appraisal helps you set the most appropriate price. 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. 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?   (Return to top)

PMI is short for for Private Mortgage Insurance. It guards the lender in the event a borrower doesn't pay on the loan and the market price of the property is lower than what the borrower still owes on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

The savings from getting rid of the PMI required when you got your mortgage will make up for the cost of the appraisal in no time. Nobody is more qualified than Adams Appraisal Service, Inc. when it comes to analyzing real estate appreciation in Marysville and Yuba County. Contact us today.

How do I get ready for the appraiser?   (Return to top)

We begin with an inspection of the home. 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. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any shrubs and move any items that would get in our way while we measure the structure. Indoors, make sure the appraiser can get to items like furnaces and water heaters.

To help expedite our work as well as ensure a more accurate report, attempt if possible to have the following items:
  • Information on the latest purchase of the property in the last three years.
  • Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
  • Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .
  • Brag sheet that lists major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
  • A list of "suggested" improvements when the property is being appraised "as complete".

What is "Market Value?"   (Return to top)

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."



Once complete, who actually owns the appraisal report?   (Return to top)

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 report - 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.

The exception to this rule is when a home owner engages an appraiser directly. In these situations, the appraiser may define 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 use the appraisal for any purpose.


How can I get the most ROI out of home improvements?   (Return to top)

This really depends on where the home is. 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. 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 help the value of your home (when done well) as long as your home doesn't then become atypical for your neighborhood in terms of size.