Kenny G. Adams has answers to "Frequently Asked Questions"


	Kenny G. Adams is more than happy to address any questions you might have about appraisals in Phelan and Riverside, Los Angeles, and San Bernardino Counties. Feel free to contact us today.

Define the term "Appraisal"
What does an appraiser do?
What are the reasons a person would need your services?
Is an appraisal the same as a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What's in an appraisal report?
After completing the appraisal, what guarantee is there that the final number is accurate?
What are the requirements to be a certified appraiser?
Who do appraisers work for?
Where does an appraiser get the information used to estimate values in Riverside, Los Angeles, and San Bernardino Counties 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?"
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 writing an appraisal consists of an estimation which forms an opinion of value. This opinion or estimate is figured using a formal process that generally uses the three main "common approaches to value". One of them is the Cost Approach - which is how much it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. The Sales Comparison Approach deals with searching for comparable properties in close proximity and discerning value based on making a comparison of those properties to the house in question. Being the most popular approach, the Sales Comparison Approach is generally the most accurate and best indicator of worth for a home. The Income Approach is generally used for determining the cost of income-producing properties based on what an investor would pay based on the amount of income a property would bring in.

What does an appraiser do? (See list of FAQ's)

An appraiser produces a fair and credible determination of market value, in the support of real property transactions. Appraisers reveal the details of their conclusions in appraisal reports.

What are the reasons a person would need your services? (See list of FAQ's)

There are many reasons to purchase an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for ordering an appraisal report include:

To receive a loan.
To reduce your tax burden.
To demonstrate a homeowner's acquired equity and remove insurance.
To challenge high property taxes.
If you need to settle an estate.
To give you an edge when purchasing a home.
To figure out an honest price when listing your home.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Because a government agency such as the IRS requires it.
It's possible you could be involved in a lawsuit - an appraisal will definitely help.

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

Is an appraisal the same as a home inspection? (See list of FAQ's)

Home inspectors do not estimate an opinion of value and do not do appraisal reports. The point of a home inspection is to investigate the structure of the house from foundation to top. For the most part, a home inspection report will evaluate 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 capacity of the home such as the attic, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

My agent performed a CMA for me. Is that the same as an appraisal? (See list of FAQ's)

To be blunt, it's like comparing opera to country. What the CMA relies upon are superficial trends. The appraisal is reliant on similar definite comparable sales. Area and building costs are also a priority in an appraisal. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

The credentials of the person behind the report is actually the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, create CMA's. A certified, state licensed professional who made their livelihood on valuing homes in and around Riverside, Los Angeles, and San Bernardino Counties is behind the appraisal. Moreover, the appraiser is an unbiased party, with no conditional interest in the property's value, unlike the real estate agent, whose income is tied to the value of the home.

What's in an appraisal report? (See list of FAQ's)

Each appraisal should demonstrate a believable value opinion and should identify the following:

The client and other intended users.
The intended use of the appraisal.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the value opinion.(Sometimes this is in the past or maybe the future for new construction!)
Relevant property attributes, including: location, physical characteristics, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the appraisal, 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.
The scope of work used when completing the job.

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

After completing the appraisal, what guarantee is there that the final number is accurate? (See list of FAQ's)

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

The appraisal used an apropos analysis of the data.

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

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

The final appraisal report was transparent, credible and not easily discredited.

There are intense education and real world experience requirements that must be fulfilled in order to become a licensed appraiser in California. Likewise, appraisers must follow a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for working up an appraisal and reporting 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 coursework, tests and real world experience. Once an appraiser is licensed, he or she is required to complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who do appraisers work for? (See list of FAQ's)

Mortgage lenders are an appraiser's typical client, needing their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does an appraiser get the information used to estimate values in Riverside, Los Angeles, and San Bernardino Counties or other areas? (See list of FAQ's)

Collecting data is one of the primary functions of an appraiser. Data can be described as either Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.

General data is received from a numerous places. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. Tax records and other public documents reveal actual sales prices in a market. Appraisers often have to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And last but not least, the appraiser gathers general data from his or her past experience in doing assignments for other properties in the same market.

How can a licensed appraiser help me? (See list of FAQ's)

An appraisal is a valuable tool anytime the value of your home is pertinent to a financial decision. If you're selling your house, an appraisal will help you determine a price that maximizes profit and reduces time on the market. 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. Don't make decisions in the dark with a professional appraisal.

What exactly is PMI and how can I get rid of it? (See list of FAQ's)

PMI is short for for Private Mortgage Insurance. It protects the lender in case a borrower defaults on the loan and the value of the home is lower 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 have a lineitem for PMI? Call Kenny G. Adams today at (800) 923-2671 or send us an e-mail. A current appraisal 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 amenities. 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.

You can make the inspection go faster and improve the quality of the appraisal report by having the following things on hand:

A plot plan or survey of the house and land (if available).
Written property agreements, such as a maintenance agreement for a shared driveway.
Most recent real estate tax bill and or legal description of the property.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

What is "Market Value?" (See list of FAQ's)

Market value or fair market value is the most probable price that a property should bring (will sell for) in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, 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: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised; (3) a reasonable time is allowed for exposure to the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) 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.

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 certainly entitled to a copy of the report - it's usually bundled with all the other closing documents - but is not entitled 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 scenarios, the appraiser may stipulate the purpose of the appraisal; 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.

I want to get more for my house. Where should I spend money renovating? (See list of FAQ's)

The added value of a particular amenity truly depends on the local market. 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.

No matter where you go, however, renovating a kitchen is almost always a safe move. 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 are right up there with kitchens, yielding 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.

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30-yr Fixed	3.98%	4.11%
15-yr Fixed	3.1%	3.26%
1-yr Adj	2.58%	3.2%

* national averages