Shirley Snyder, SRA has answers to "Frequently Asked Questions"


	Shirley Snyder, SRA is always prepared to reply to any inquiries you might have about appraisals or real estate in Oceanside and San Diego County. Contact us today to learn how we can help solve your valuation problems.

What is an appraisal?
What does an appraiser do?
Why would a person need services from Shirley Snyder, SRA?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
Upon completion of the appraisal, what guarantee is there that the value conclusion is accurate?
How difficult is it to become certified?
Who engages the services of appraisers?
Where does an appraiser get the information used to estimate values in San Diego County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
Define "Market Value"
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?

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

An appraiser provides an estimation that generates an opinion of value. There are three "common approaches to value" which helps the appraiser arrive at this opinion or valuation. One of the methods in use is the Cost Approach, which finds what it would cost to restore the improvements to the house, less the age and physical deterioration, adding the land value. The Sales Comparison Approach deals with searching for similar houses in the vicinity and finding value based on comparing those prior sales to the property in question. The Sales Comparison Approach is normally the most accurate and clearest indicator of value for a home. The Income Approach is generally used for determining the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.

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

An appraiser provides a professional, unbiased opinion of market value, in the support of real estate transactions. Appraisers exhibit their expert analysis in appraisal reports.

Why would a person need services from Shirley Snyder, SRA? (See list of FAQ's)

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

To get a loan.
To reduce your tax burden.
To demonstrate a homeowner's acquired equity and remove insurance.
To contest improperly assessed property taxes.
To handle an estate.
To give you an edge when purchasing a home.
To figure out a likely price 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 a government agency such as the IRS requires it.
If you are ever involved in a lawsuit.

For a more detailed explanation of the appraisal process click here.

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

Appraisers do not do provide house inspections and are not home inspectors. The point of a home inspection is to evaluate the structure of the property from foundation to rooftop. Commonly, a home inspection report will discuss the amenities and the necessities of the home: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, accessible 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)

To be honest, they have nothing in common. The CMA depends on indistinct market trends. Appraisals use similar sales which are verifiable resources. Also, the appraisal checks other factors like condition, neighborhood and replacement costs. 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 behind the report is hands down 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, write CMA's. A certified, California licensed professional who has formed their livelihood on valuing homes in and around San Diego County creates the appraisal. Further, the appraiser is an independent party, with no conditional interest in the property's value, unlike the agent, whose income is tied to the price of the home.

What can I expect to see in my appraisal report? (See list of FAQ's)

The main purpose of an appraisal document is to provide a value opinion, and depending on the scope of the report, one will customarily see the following:

The client and whose purposes the appraisal is to serve.
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 appraisal.
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 items.
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 process of completing the job.

For a more in depth look at all that goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, what guarantee is there that the value conclusion is accurate? (See list of FAQ's)

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

The appraisal used analysis of the information.

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

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

The final appraisal report was easy to explain, sound and defensible.

To become a state licensed appraiser, we must meet intense education and experience requirements that prepare us to formulate an unbiased opinion. In addition, appraisers must obey a strict industry code of ethics and respect national standards of practice for real estate appraisal. The rules for carrying out an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's) Licensing and certification is achieved through classroom study, tests and practical experience. Once an appraiser is licensed, he/she is required to engage in continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who engages the services of appraisers? (See list of FAQ's)

Most of the time, appraisers are called upon by lenders to estimate the value of a house involved in a loan transaction - to make sure the house is indeed adequate collateral for the loan. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does an appraiser get the information used to estimate values in San Diego County or other areas? (See list of FAQ's)

One of the primary tasks an appraiser must accomplish is to compile data. Data can be described as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.

General data is received from a many sources. To look up recently sold homes to be used as "comps", we typically go to the local Multiple Listing Service. Tax records and other public documents reveal actual sales prices in a market. Appraisers often need to report when a property lies in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And most importantly, the appraiser assimilates general data from his or her past experience in doing assignments for other houses in the same market.

Why should I hire a licensed appraiser? (See list of FAQ's)

An appraisal is a worthwhile whenever your home's value is pertinent to some financial decision. For those selling a home, you'll want to determine a price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. 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. Simply put, 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? (See list of FAQ's)

PMI stands for Private Mortgage Insurance. This supplemental policy covers the lender in case a borrower defaults on the loan and the market price of the property is lower than the balance of 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.


	The savings from getting rid of your PMI will make up for the price of the appraisal in no time. Shirley Snyder, SRA is in the business of tracking real estate value trends in Oceanside and San Diego County. Contact us today.

Should I do anything in advance of the appraisal inspection (See list of FAQ's)

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 status of its amenities. On the home's interior, pick up any clutter and make sure we can access things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of outside walls.

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

Records on the latest purchase of the property in the last three years.
Any paperwork, 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.
Brag sheet that lists major home improvements and enhancements, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
Most recent real estate tax bill and or legal description of the property.

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

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."

Does the appraisal belong to the bank or the consumer? (See list of FAQ's)

In most real estate transactions, the appraisal is ordered by the lender. 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 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 engages an appraiser directly. In these situations, the appraiser may define how the appraisal can be used; 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.

How can I get the most ROI out of home improvements? (See list of FAQ's)

It really depends on the market. 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 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.