Janice Peterson dba J Starr Appraisals has answers to "Frequently Asked Questions"


	Janice Peterson dba J Starr Appraisals is prepared to address any questions you might have about appraisals in Lehigh County. Contact us today to talk about how we can help you with your specific valuation problems.

What is an appraisal?
What does an appraiser do?
Why would someone request a real estate appraisal?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
Once the assignment has been completed, how can I have certainty that the value conclusion is accurate?
How hard is it to become certified?
Who are an appraiser's customers?
Where does Janice Peterson dba J Starr Appraisals get the data used to estimate values in Lehigh County or other areas?
Why should I hire a licensed appraiser?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Does the appraiser need anything from me in advance?
Define "Market Value"
Who has rights to the appraisal report?
I want to get more for my house. Where should I spend money renovating?

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

The process of writing an appraisal report deals with an estimation which leads to an opinion of value. The appraiser will use a several "approaches," typically three, to come to the estimation of market value. One of them is the Cost Approach - which is how much capital would be required to replace the improvements, less physical deterioration and other factors, then adding the land value. The Sales Comparison Approach involves searching for similar properties in close proximity and discovering the value based on comparing those properties to the home being appraised. The Sales Comparison Approach is normally the most accurate and clearest indicator of value for a house. The third approach is the Income Approach, which is the best method in appraising income producing properties - it deals with estimating what an investor would pay based on the money generated by the property.

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

An appraiser offers an objective and well supported assessment of market value, to be used in making real estate transactions. Appraisers summarize their professional findings in appraisal reports.

Why would someone request a real estate appraisal? (See list of FAQ's)

There are a lot of reasons to obtain an appraisal from Janice Peterson dba J Starr Appraisals with the usual reason being real estate and mortgage transactions. A few other reasons for ordering an appraisal report include:

To receive a loan.
If you would like to lower your property tax obligations.
To help a homeowner realize if they owe less than 80% of their home's value and remove insurance.
To contest improperly assessed property taxes.
If you need to settle an estate.
To offer you an edge when purchasing real estate.
To find a reasonable price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS require an appraisal on every property.
If you ever find yourself in a lawsuit.

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

How is an appraiser different than a home inspector? (See list of FAQ's)

The appraiser is not a home inspector and he or she does not do a full home inspection. A third-party home inspector will investigate the structure of the home, from the roof to the foundation. Usually, a home inspection report will explain the amenities and the requirements of the property: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

Is an appraisal the same as a comparative market analysis(CMA)? (See list of FAQ's)

Frankly, they share nothing in common. The CMA utilizes market trends to create most of their business. The appraisal is based on specific verifiable comparable sales. Also, the appraisal verifies other factors like condition, neighborhood and replacement prices. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

Who's creating the report is hands down 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 have specific competence when it comes to home valuation. The appraisal is created 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 collect only a previously agreed upon sum for work they perform, regardless of their outcome.

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

The main purpose of an appraisal document is to give a value opinion, and depending on the scope of the report, you'll usually see the following:

The client 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 value opinion.(Sometimes this is in the past or maybe the future for new construction!)
Relevant property attributes, including: location, physical attributes, legal attributes, economic factors, the property rights 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.
What was entailed in the process of completing the appraisal.

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

Once the assignment has been completed, how can I have certainty that the value conclusion is accurate? (See list of FAQ's)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:

That the information analysis contained in the appraisal was appropriate.

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

That appraisal services were not executed in a careless or negligent fashion.

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

There are rigorous education and practical experience requirements that must be adhered to in order to achieve the status of "licensed appraiser" in Pennsylvania. In addition, appraisers must abide by a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for working up 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 coursework, tests and experience working under a supervisory appraiser. Once an appraiser is licensed, he/she must then engage in continuing education courses in order to keep the license current. To see the specific requirements for any state click here.

Who are an appraiser's customers? (See list of FAQ's)

Commonly, appraisers are hired by lenders to render a value opinion on real estate involved in a loan transaction - to make sure the real estate is truly adequate collateral for the loan. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does Janice Peterson dba J Starr Appraisals get the data used to estimate values in Lehigh County or other areas? (See list of FAQ's)

Gathering data is one of the main tasks an appraiser performs. Data can be classified as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specifics are gathered by the appraiser while on site.

General data is collected from a number of places. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. To verify actual sales prices, we use items in the assessor's office and other public documents. Appraisers often have 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 last but not least, the appraiser assembles general data from his or her collective knowledge gained from doing assignments for other properties in the same market.

Why should I hire a licensed appraiser? (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 determine 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, you can avoid overpaying by getting an independent appraisal. For parties settling an estate or divorce, an appraisal from Janice Peterson dba J Starr Appraisals is the best documentation to ensure assets are divided properly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making wise 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 short for for Private Mortgage Insurance. This added plan guards the lender in case a borrower is unable to pay on the loan and the market price of the house is lower than the loan balance. 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.


	The amount you keep from getting rid of your PMI pays for the appraisal in no time. Janice Peterson dba J Starr Appraisals is in the business of tracking value trends in Coopersburg and Lehigh County. Contact us today.

Does the appraiser need anything from me in advance? (See list of FAQ's)

We begin with an inspection of the home. 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 as well as ensure a more accurate report, try if possible to have the following items:

Any information on the purchase of the property for the last three years.
A list of any personal property that will be left behind and sold with the home, such as a oven, or a washer and dryer, if applicable.
Title policy that describes encroachments or easements.
A list of any major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
Locate copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.

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

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? (See list of FAQ's)

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 entitled to a copy of the appraisal - 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.

This rule doesn't apply when a home owner hires an appraiser directly. In these situations, the appraiser may stipulate 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're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

As a rule, the most value returned 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 are right up there with kitchens, yielding 85%. On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.