Advent Appraisals (763) 350-4816 has answers to "Frequently Asked Questions"

Advent Appraisals (763) 350-4816 is happy to elaborate on any concerns you might have about appraisals or real estate in Isanti County. Contact Advent Appraisals (763) 350-4816 today to learn how we can help you with your valuation problems.

Define the term "Appraisal"
Describe what an appraiser does
Why would I require your services?
Is an appraisal the same as a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
Upon completion of the report, how can I have certainty that the value conclusion is trustworthy?
What goes into an appraiser's certification?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in Isanti County or other areas?
What can a full appraisal do for me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
How do I get ready for the appraiser?
How does an 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"   (List of questions)

An appraisal is an evaluation allowing the appraiser to come to an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or estimate. One of the processes is the Cost Approach - which is how much capital would be required 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 discovering a comparable analysis to other similar properties within a close vicinity which have recently sold. Being the most popular approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a property. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it deals with estimating what an investor would pay based on the income generated by the property.

Describe what an appraiser does   (List of questions)

An appraiser forumlates a professional, unbiased opinion of market value, in the support of real property transactions. Appraisers present their professional findings in appraisal reports.


Why would I require your services?   (List of questions)

There are a lot of reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for purchasing an appraisal include:
  • To receive a loan.
  • If you would like to reduce your property tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
  • To challenge inflated property taxes.
  • To handle an estate.
  • To give you a leg-up when purchasing real estate.
  • To figure out the most probable property value 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.
  • Because an official agency such as the IRS requires it.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.
If you need more information about the appraisal process, please click here.


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

Home inspectors do not produce an opinion of value and do not use the same forms as appraisers. The purpose of a home inspection is to investigate the structure of the property from foundation to rooftop. The stereotypical home inspector's report will include an evaluation of the integrity of the home's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (List of questions)

Honestly, they share nothing in common. The CMA uses market trends to generate most of their business. Appraisals use comparable sales which are verifiable resources. Area and building prices are also precedent in an appraisal. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

Who's creating the report is actually the most significant difference between a CMA and an appraisal. Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to accept a flat sum for work they perform, regardless of their outcome.

What can I expect to see in my appraisal report?   (List of questions)

Each report must demonstrate a supported estimate of value and should identify the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The appraisal's purpose.
  • The type of value reported and a definition of that value.
  • The effective date of the appraiser's opinions and conclusions.
  • 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 valuation, such as personal property, trade fixtures and even intangible considerations.
  • 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.
  • What was involved in the activity of completing the assignment.
For a more detailed view of the work that goes into an appraisal report click here: Sample Appraisal Report


Upon completion of the report, how can I have certainty that the value conclusion is trustworthy?   (List of questions)

In communicating an appraisal report, 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 grave errors contained in the report, nor any relevant details left out.

  • That appraisal services were done in a careful and cognizant fashion.

  • That a trustworthy, supportable appraisal report was conferred.
To become a state licensed appraiser, there are intense education requirements as well as practical experience that must be attained - all with the end goal of gaining the skills required to provide unbiased value opinions. Likewise, appraisers must stick to a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for working up an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (List of questions) Licensing and certification is achieved through classroom study, tests and real world experience. Once an appraiser is licensed, he/she is required to complete 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)

Mortgage lenders are an appraiser's most likely customer, using their services to ensure a home involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does an appraiser get the information used to estimate values in Isanti County or other areas?   (List of questions)

One of the primary things an appraiser does is to compile data. Data can be classified as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are noted 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 typically use the local Multiple Listing Service. To verify actual sales prices, we look at tax records and other public documents. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood service.

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


What can a full appraisal do for me?   (List of questions)

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 determine a 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 house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.


My mortgage statement has an item on it for PMI? Can I get rid of that?   (List of questions)

PMI is the common abbreviation for for Private Mortgage Insurance. This added policy takes care of the lender in the event a borrower doesn't pay on the loan and the market price of the house is less than what is owed on the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.

Does your monthly loan payment have a lineitem for PMI?Call Advent Appraisals (763) 350-4816 today at (763)444-5269 or send us an e-mail. A current appraisal could save you thousands.

How do I get ready for the appraiser?   (List of questions)

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 amenities. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house . Trim any bushes and relocate any items that would get in our way while we measure the structure. Indoors, make sure the appraiser can easily access items like furnaces and water heaters.

You can make things go faster and improve the quality of the appraisal report by having the following things on hand:
  • Written property agreements, such as a maintenance easement for a shared driveway.
  • Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
  • Locate copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.
  • A list of "proposed" improvements when the property is being appraised "as complete".

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."



Once complete, who actually owns the appraisal report?   (List of questions)

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 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 stipulate the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stipulated 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?   (List of questions)

Like all things real estate, this is dependent on a home's location. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

No matter where you go, however, renovating a kitchen is almost always a safe move. 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, yielding 85%. On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.