Eagle One Appraisal has answers to "Frequently Asked Questions"


	Eagle One Appraisal is always eager to elaborate on any concerns you might have about appraisals or real estate in Allen County. Contact Eagle One Appraisal today to learn how we can help you with your valuation problems.

Define the term "Appraisal"
Describe what an appraiser does
What are the reasons I would request your services?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
Upon completion of the report, what guarantee is there that the value indicated is valid?
What goes into an appraiser's certification?
Who engages the services of appraisers?
Where does Eagle One Appraisal get the information used to estimate values in Allen County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
How do I get ready for the appraiser?
Define "Market Value"
Once complete, who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?

Define the term "Appraisal" (See list of FAQ's)

The method of creating an appraisal consists of an investigation which forms an opinion of value. The real estate appraiser will typically use a few "approaches," typically three, to draw up the estimation of market value. One of the processes in use is the Cost Approach, which finds what it would cost to replace the improvements to the house, minus age and physical dilapidation, plus the land value. The Sales Comparison Approach deals with finding comparable homes nearby and discovering the value based on making a comparison of those properties to the property being appraised. Being the most commonly used approach, the Sales Comparison Approach is generally the most accurate and best indicator of market value for a residential property. One of the least common approaches in appraising residential properties is the Income Approach, which is mainly used to find 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 (See list of FAQ's)

An appraiser offers an impartial and well justified determination of market value, often in the context of a real estate sale. Appraisers document their professional analysis in appraisal reports.

What are the reasons I would request your services? (See list of FAQ's)

There are a lot of reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for obtaining an appraisal report include:

If you are applying for a loan.
If you would like to lower your property tax burden.
To demonstrate a homeowner's acquired equity and remove PMI.
To fight high property taxes.
If you need to settle an estate.
To give you a leg-up when purchasing real estate.
To determine an honest price when putting your home on the market.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS require an appraisal on every home.
It's possible you could be involved in a lawsuit - an appraisal will help.

Click here for a more detailed explanation of the process dealing with getting an appraisal.

What is the difference between an appraisal and a home inspection? (See list of FAQ's)

The appraiser is not a home inspector and does not do a comprehensive home inspection. An inspection is a third-party investigation of the available structure and mechanical systems of a home, from the top to the bottom. Usually, a home inspection report will explain the amenities and the requirements of the home: air conditioning (weather permitting), electrical systems, 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)? (See list of FAQ's)

To be blunt, it's night and day. What the CMA depends on are vague trends. The appraisal depends on similar proven comparable sales. Area and construction prices are also precedent in an appraisal. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

But the largest differentiator is who's doing the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. A certified, Indiana licensed professional who bases a career on valuing homes in and around Allen County creates the appraisal. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a previously agreed upon fee for work they perform, regardless of their value conclusion.

What does the appraisal report contain? (See list of FAQ's)

The main purpose of an appraisal report is to provide a value opinion, 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 appraisal's purpose.
The type of value reported and a definition of the value reported.
The effective date of the appraisal.
Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic factors, the real property interest valued, 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.
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 considered to complete the job.

For a more comprehensive view of what goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the report, what guarantee is there that the value indicated is valid? (See list of FAQ's)

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

The appraisal contained analysis of the information.

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

That appraisal services were provided in a careful and cognizant manner.

That a solid, substantiated appraisal report was communicated.

To become a state licensed appraiser, we must meet extensive education and experience requirements that give us the background to formulate an unbiased opinion. Plus, appraisers must stick to a strict industry code of ethics and observe national standards of practice for real estate appraisal. The rules for carrying out an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's) Licensing and certification is achieved through classroom study, tests and experience working under a supervisor. Once licensed, he/she is required to take continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who engages the services of appraisers? (See list of FAQ's)

Most of the time, appraisers are called upon by 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 Eagle One Appraisal get the information used to estimate values in Allen County or other areas? (See list of FAQ's)

Gathering information is one of the primary things an appraiser performs. Data can be classified as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is received from a variety of places. To look up recent sales to be used as "comps", an appraiser will often use the local Multiple Listing Service. Tax records and other courthouse documents verify actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood product.

And most importantly, the appraiser assembles general data from his or her past experience in creating appraisals for other houses in the same market.

Why do I need a professional appraisal? (See list of FAQ's)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. For those selling a home, you'll want to figure out 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. When buying, be sure you're not overpaying by commissioning an independent appraisal. For those settling an estate or divorce, an appraisal from Eagle One Appraisal is the best documentation to ensure assets are divided properly. A house is often the single, largest financial asset anybody owns. Knowing its true value means you can make informed financial decisions.

My mortgage statement has an item on it for PMI? Can I get rid of that? (See list of FAQ's)

PMI is the common abbreviation for for Private Mortgage Insurance. PMI guards the lender in case a borrower is unable to pay on the loan and the market price of the property is less than what is owed on the loan. 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.


	Does your monthly house payment include a fee for PMI?Call Eagle One Appraisal today at 260-672-9428 or send us an e-mail. Documentation of your home's current value could save you thousands.

How do I get ready for the appraiser? (See list of FAQ's)

The first step in most appraisals is the home inspection. What this entails is the appraiser, after setting up an appointment, personally going through the home - recording the layout of the rooms, taking photos and documenting the general condition of its features. On the home's interior, pick up any clutter and make sure we can access things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of exterior walls.

To help speed things along plus ensure a more accurate report, attempt if possible to have the following items:

A plot plan or survey of the house and land (if available).
Title policy that lists encroachments or easements.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
A bill for your most recent real estate taxes which should also contain a legal description of the property.

Define "Market Value" (See list of FAQ's)

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."

Once complete, who actually owns the appraisal report? (See list of FAQ's)

In most real estate transactions, the appraisal is ordered by the lender. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is entitled to a copy of the appraisal - 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 hiring the appraiser for things outside securing a mortgage. In these situations, 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? (See list of FAQ's)

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.

As a rule, the best ROI from renovating a home comes in the kitchen. 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 were second, 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 an oddball for your neighborhood in terms of size.