American Realty Appraisals, LLC has answers to "Frequently Asked Questions"


	American Realty Appraisals, LLC is ready to reply to any inquiries you might have about appraisals in Union County. Contact us today to talk about how we can help solve your valuation problems.

Define the term "Appraisal"
Describe what an appraiser does
What would cause me to need your services?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
Once the assignment has been delivered, what guarantee is there that the value indicated is accurate?
What does it mean for an appraiser to be licensed?
Who are an appraiser's customers?
Where does American Realty Appraisals, LLC get the data used to estimate values in Union County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal appointment
How does an 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" (List of questions)

An appraisal is an investigation leading to an opinion of value. The appraiser will typically use a few "approaches," typically three, to arrive at the estimation of market value. The Cost Approach is one of the approaches that appraisers use to find value; it involves figuring what the improvements would cost less physical deterioration, adding the land value. The Sales Comparison Approach deals with searching for comparable properties in close proximity and discovering the value based on comparing those prior sales to the home being appraised. The Sales Comparison Approach is commonly the most definitive and best indicator of value for a house. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it involves estimating what an investor would pay based on the income generated by the property.

Describe what an appraiser does (List of questions)

An appraiser produces a fair and credible determination of market value, in the support of real estate exchanges. Appraisers demonstrate their expert conclusions in appraisal reports.

What would cause me to need your services? (List of questions)

There are a lot of reasons to get an appraisal from American Realty Appraisals, LLC with the most common reason being real estate and mortgage transactions. Other reasons for getting an report include:

To get a loan.
To reduce your property taxes.
To help a homeowner realize if they owe less than 80% of their home's value and remove insurance.
To fight inflated property taxes.
To deal with an estate.
To provide you an edge when purchasing a home.
To find a likely sales price when putting your home on the market.
To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
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.

If you need more information regarding the appraisal process, please click here.

Is an appraisal the same as a home inspection? (List of questions)

Home inspectors do not figure out an opinion of value and are not appraisers. A third-party home inspector will investigate the structure of the house, from the top to the bottom. Generally, a home inspection report will explain the amenities and the requirements 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 other visible structures.

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

Frankly, they share nothing in common. The CMA depends on indistinct market trends. Appraisals use comparable sales which are verifiable resources. Also, the appraisal verifies other factors like condition, neighborhood and building costs. 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 largest differentiator is who's doing the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, create CMA's. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Moreover, the appraiser is an independent party, with no conditional interest in the value conclusion, unlike the real estate agent, who gets a commission based upon the value of the home.

What's in an appraisal report? (List of questions)

Each report must indicate a supported value opinion and will clearly state the following:

The client and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The appraisal's purpose.
The type of value contained and a definition of the value reported.
The effective date of the appraiser's opinions and conclusions.(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 description, legal attributes, economic factors, 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 considerations.
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 to complete the appraisal.

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

Once the assignment has been delivered, what guarantee is there that the value indicated is accurate? (List of questions)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:

The appraisal used an appropriate analysis of the data.

Whether individually or collectively, there were no crucial errors contained in the report, nor any material details left out.

That appraisal services were rendered in a careful and judicious fashion.

That a trustworthy, supportable appraisal report was conferred.

There are rigorous classroom and real world experience requirements that must be fulfilled in order to become a licensed appraiser in New Jersey. Plus, appraisers must follow a strict industry code of ethics and respect 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).

(List of questions) Regulations regarding licensing and certification are different from state to state. However, licensing and certification typically translates to many hours of classroom study, tests and practical experience. Once licensed, he/she is required to take continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who are an appraiser's customers? (List of questions)

Typically, appraisers are called upon by lenders to render a value opinion on a house involved in a loan transaction - to make sure the real estate is truly adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does American Realty Appraisals, LLC get the data used to estimate values in Union County or other areas? (List of questions)

One of the primary things an appraiser does is to assimilate data. Data can be split into Specific or General. Specific data is 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 variety of 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. Flood zone data is available from FEMA data outlets, 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 doing assignments for other properties in the same market.

Why do I need a professional appraisal? (List of questions)

An appraisal is a valuable tool anytime the value of your home is pertinent to a financial decision. When selling your home, an appraisal assists you in setting the most appropriate price. When buying, be sure you're not overpaying by getting an independent appraisal. For parties settling an estate or divorce, an appraisal from American Realty Appraisals, LLC is the best way to ensure assets are split up evenly. A home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

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

PMI is an acronym for Private Mortgage Insurance. This supplemental policy protects the lender in case a borrower doesn't pay on the loan and the market price of the house is lower than the loan balance. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.


	Has your home value appreciated since you first purchased? Contact American Realty Appraisals, LLC today at (732) 598-9811. You may be able to cancel your Private Mortgage Insurance premium.

Should I do anything in advance of the appraisal appointment (List of questions)

We start with an inspection of the property. 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. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house . Trim any shrubs and relocate any items that would get in our way while we measure the structure. On the inside, make sure we can get to appliances 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).
Written property agreements, such as a maintenance easement for a shared driveway.
Title policy that describes encroachments or easements.
Brag sheet that lists major home improvements and upgrades, the date of their installation and their cost (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
Locate copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.

How does an appraiser define "Market Value"? (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? (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 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.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these scenarios, the appraiser may stipulate the purpose of the appraisal; 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.

Are some home improvements more worthwhile than others? (List of questions)

A home's location - what city it is in and even what part of that city - is key to this popular question. 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.

As a rule, the best ROI from renovating a home comes in the kitchen. 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 weren't far behind, returning 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.