W. T. Brown Inc. has answers to "Frequently Asked Questions"


	W. T. Brown Inc. is always ready to handle any concerns you might have about appraisals or real estate in Portsmouth and Portsmouth City County. Contact W. T. Brown Inc. today to talk about how we can help solve your specific valuation problems.

What is an appraisal?
What does an appraiser do?
Why would I require a real estate appraisal?
What is the difference between an appraisal and 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?
After completing the appraisal, what guarantee is there that the value indicated is trustworthy?
How difficult is it to become certified?
Who employs appraisers?
Where does W. T. Brown Inc. get the data used to estimate values in Portsmouth City 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
What is "Market Value?"
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?

What is an appraisal? (List of questions)

The appraisal process is an estimation that generates an opinion of value. This opinion or estimate is found using a formal method that typically uses the three main "common approaches to value". One of the methods in use is the Cost Approach, which is what it would cost to restore the improvements to the home, minus depreciation and physical dilapidation, adding the land value. Easily the most common approach in finding the value of a home is the Sales Comparison Approach which concerns making a comparison to comparable properties nearby. Being the most common approach, the Sales Comparison Approach tends to be the most precise and best indicator of market value for a property. 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 money generated by the property.

What does an appraiser do? (List of questions)

An appraiser offers a professional, unbiased opinion of market value, to be used in making real estate transactions. Appraisers show their professional conclusions in appraisal reports.

Why would I require a real estate appraisal? (List of questions)

There are a lot of reasons to order an appraisal from W. T. Brown Inc. with the most common reason being real estate and mortgage transactions. A few other reasons for getting an appraisal report include:

To receive a loan.
If you would like to reduce your property tax obligations.
To demonstrate a homeowner's acquired equity and remove PMI.
To contest improperly assessed property taxes.
To deal with an estate.
To offer you a leg-up when purchasing a home.
To figure out a likely price when putting your home on the market.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Government agencies such as the IRS require an appraisal on every house.
If you are ever involved in a civil case.

If you need a more detailed explanation of the appraisal process, please click here.

What is the difference between an appraisal and a home inspection? (List of questions)

Appraisers do not do complete home inspections and are not home inspectors. The point of a home inspection is to investigate the structure of the home from basement to top. The general property inspector's report will contain an evaluation of the integrity of the house'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)

To be honest, they have nothing in common. The CMA depends on indefinite market trends. The appraisal depends on specific proven comparable sales. Area and building costs are also a priority in an appraisal. 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 produce CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, state licensed professional who has formed a career on valuing properties in and around Portsmouth City County creates the appraisal. Moreover, the appraiser is an independent voice, with no vested interest in the value conclusion, unlike the real estate agent, whose income is tied to the value of the home.

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

The main purpose of an appraisal report is to let the reader know the value of the real estate in question, and depending on the scope of the report, you'll usually see the following:

The client and other intended users.
How the appraisal is supposed to be used.
The purpose of the appraisal.
Precisely what "value" attribute is being reported and what that value means.
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 attributes, legal attributes, economic factors, the property rights valued, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible factors.
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 assignment.

For a more in depth 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 value indicated is trustworthy? (List of questions)

In communicating an appraisal report, each appraiser must ensure the following:

The appraisal contained an apropos analysis of the data.

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

That appraisal services were not rendered in a careless or negligent manner.

That a credible, supportable appraisal report was imparted.

To become a state licensed appraiser, there are strenuous education requirements as well as real world experience that must be attained - all with the end goal of gaining the skills required to provide unbiased value opinions. Plus, appraisers must stick to a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and communicating 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 is commonly associated with many hours of coursework, tests and practical experience. Once licensed, he/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 employs appraisers? (List of questions)

Commonly, appraisers are called upon by mortgage lenders to estimate the value of a house involved in a loan transaction. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does W. T. Brown Inc. get the data used to estimate values in Portsmouth City County or other areas? (List of questions)

One of the most important activities of an appraiser is to collect data. Data can be classified as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.

General data is received from a numerous places. Local Multiple Listing Services (MLS) provide data on recently sold homes that might be used as comparables. To verify actual sales prices, we research tax records and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood product.

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

Why do I need a professional appraisal? (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. When selling your house, an appraisal will help you determine a price that maximizes profit and reduces time on the market. When buying, be sure you're not overpaying by getting an independent appraisal. 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. Knowing its true value means you can make wise financial decisions.

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

PMI is an acronym for Private Mortgage Insurance. This additional policy guards the lender in case a borrower is unable to pay on the loan and the market price of the home is lower than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Has your real estate appreciated since you first purchased? Call W. T. Brown Inc. today at 7573973266. You may be able to cancel your Private Mortgage Insurance payment.

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

The first step in most appraisals is the property inspection. 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. Inside, pick up any clutter and make sure we can find our way to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of exterior walls.

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

A survey or plot map of the property and building (if readily available).
List of personal property to be sold with the home.
Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
Find copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.
Most recent real estate tax bill from Portsmouth City and or legal description of the property.

What is "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."

Who has rights to the appraisal report? (List of questions)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. 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 appraisal - 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.

The exception to this rule is when a home owner hires an appraiser directly. In these situations, the appraiser may define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can use the appraisal for any purpose.

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

This really depends on where the home is. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!

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, yielding 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.