Shenandoah Valley Appraisal, Inc. has answers to "Frequently Asked Questions"


	Shenandoah Valley Appraisal, Inc. is always prepared to talk to you about any questions you might have about appraisals in Augusta County. Feel free to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
What are the reasons someone would need a real estate appraisal?
Is an appraisal the same as a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What does the appraisal report contain?
After completing the report, what assurance is there that the value indicated is legitimate?
What goes into an appraiser's certification?
Who engages the services of appraisers?
Where does Shenandoah Valley Appraisal, Inc. get the data used to estimate values in Augusta County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What does "Market Value" mean?
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?

Define the term "Appraisal" (Top)

The procedure of writing an appraisal consists of an inspection which leads to an opinion of value. This opinion or estimate is figured using a formal method that generally utilizes the three main "common approaches to value". The Cost Approach is one of the processes that real estate appraisers use to find the value of a home; it involves discerning what the improvements would cost less physical depreciation, adding the land value. Easily the most common approach in finding the likely sales price of a home is the Sales Comparison Approach which concerns concluding a comparison to comparable houses close by. Usually, the Sales Comparison Approach is the most definite indicator of market value of a residential property. One of the least common approaches in appraising houses is the Income Approach, which is generally used to find the market value of a property based on what an investor would pay based on the income produced by the property.

Describe what an appraiser does (Top)

An appraiser provides a professional, unbiased determination of market value, to be used in making real estate transactions. Appraisers summarize their expert analysis in appraisal reports.

What are the reasons someone would need a real estate appraisal? (Top)

There are a lot of reasons to purchase an appraisal from Shenandoah Valley Appraisal, Inc. with the most common reason being real estate and mortgage transactions. Some other reasons for obtaining an report include:

To receive a loan.
To reduce your tax burden.
To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
To contest inflated property taxes.
If you need to take care of an estate.
To provide you a negotiating tool when purchasing a home.
To determine a likely 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.
If you are ever involved in a lawsuit.

For a more extensive description of the appraisal process click here.

Is an appraisal the same as a home inspection? (Top)

Home inspectors do not provide an opinion of value and do not use the same forms as appraisers. A third-party home inspector will judge the structure of the property, from the roof to the bottom. The standard house inspector's report will include an evaluation of the integrity of the property's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

My agent performed a CMA for me. Is that the same as an appraisal? (Top)

Simply put, it's like comparing Shakespeare to reality TV. What the CMA depends on are ill-defined trends. An appraisal is based on comparable sales that can be proven by public record. In addition, the appraisal verifies other factors like condition, location and construction 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 most significant factor is the person doing the report. Real estate agents produce CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon sum for work they perform, regardless of their value conclusion.

What does the appraisal report contain? (Top)

Every appraisal should demonstrate a credible 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 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!)
Relevant property attributes, including: location, physical characteristics, legal attributes, economic factors, the property rights in question, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible factors.
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 what goes into an appraisal report click here: Sample Appraisal Report

After completing the report, what assurance is there that the value indicated is legitimate? (Top)

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

The appraisal contained an appropriate analysis of the data.

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

That appraisal services were delivered in a careful and cognizant fashion.

The final appraisal report was clear, sound and not easily discredited.

There are rigorous classroom and experience requirements that must be fulfilled in order to achieve the designation of "licensed appraiser" in Virginia. Likewise, appraisers must obey a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for developing an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Top) Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. In general, licensing and certification typically translates to many hours of classroom study, tests and practical experience. Once an appraiser is licensed, he or she is required to take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who engages the services of appraisers? (Top)

Most of the time, appraisers are employed by mortgage lenders to estimate the value of a home involved in a loan transaction - to make sure the house is truly adequate collateral for the loan. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does Shenandoah Valley Appraisal, Inc. get the data used to estimate values in Augusta County or other areas? (Top)

One of the main activities of an appraiser is to collect property data. Data can be described as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.

General data is received from a many places. To research recently sold homes to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. To double-check actual sales prices, we look at items in the assessor's office and other public documents that are usually online nowadays. Appraisers routinely need to report when a property is in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

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? (Top)

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 assists you in setting a price that maximizes profit and reduces time on the market. When buying, be sure you're not overpaying by commissioning an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. 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? (Top)

PMI stands for Private Mortgage Insurance. It protects the lender in case a borrower doesn't pay on the loan and the market price of the property is lower than what is owed on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Is PMI a lineitem in your monthly mortgage payment?Call Shenandoah Valley Appraisal, Inc. today at 540-337-9837 or send us an e-mail. A current appraisal could save you thousands.

How do I get ready for the appraiser? (Top)

The first step in most appraisals is the property 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, make sure it is clutter free and that we can get to things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of exterior walls.

To help expedite our work plus ensure a more accurate report, try if possible to have the following items:

Information on any written private easements, such as a shared driveway with a neighbor.
A list of any personal property that will be left behind and sold with the home, such as an oven, or a washer and dryer, if applicable.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems 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.

What does "Market Value" mean? (Top)

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."

Who has rights to the appraisal report? (Top)

For mortgage transactions, the lender requests the appraisal, either directly or through a third party. 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 included 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 engaging the appraiser for things outside securing a mortgage. In these cases, the appraiser may define how the appraisal can be used; 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? (Top)

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

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 are right up there with kitchens, yielding 85%. On the contrary, work that may not add value would be painting just for the sake of redecorating.