Desert Sky Appraisers has answers to "Frequently Asked Questions"


	Desert Sky Appraisers is always ready to answer any concerns you might have about appraisals in Maricopa County. Feel free to contact us today.

Describe an appraisal
What does an appraiser do?
What are the reasons a person 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 are the contents of an appraisal report?
Once the report is done, how can I have assurance that the value indicated is valid?
What goes into an appraiser's certification?
Who hires an appraiser?
Where does an appraiser get the information used to estimate values in Maricopa 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?
Are some home improvements more worthwhile than others?

Describe an appraisal (Go to list of questions)

An appraiser provides an estimation that leads to an opinion of value. The appraiser must use a few "approaches," typically three, to arrive at the estimation of market value. One of the methods is the Cost Approach - which is what it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. The Sales Comparison Approach involves finding similar properties in the vicinity and figuring out the value based on making a comparison of those homes to the home being appraised. Being the most popular approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a home. The Income Approach is mainly used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of income a property produce.

What does an appraiser do? (Go to list of questions)

An appraiser generates a fair and credible assessment of market value, often in the context of a real estate purchase. Appraisers present their expert investigation in appraisal reports.

What are the reasons a person would need a real estate appraisal? (Go to list of questions)

There are a lot of reasons to get an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for getting an appraisal include:

To get a loan.
If you would like to lower your property tax burden.
To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
To fight inflated property taxes.
To handle an estate.
To provide you a leg-up when purchasing real estate.
To determine a likely sales price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Because a government agency such as the IRS requires it.
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? (Go to list of questions)

Appraisers do not do provide home inspections and are not home inspectors. An inspection is a third-party investigation of the livable structure and electrical and mechanical systems of a house, from the top to the foundation. For the most part, a home inspection report will explain the amenities and the necessities of the property: 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, 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? (Go to list of questions)

To be blunt, it's like comparing sugar and saccharin. The CMA depends on indefinite local market trends. The appraisal relies on similar valid comparable sales. Area and construction costs are also a priority in an appraisal. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the largest differentiator is who's behind the report. 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. A certified, state licensed professional who bases a career on valuing homes in and around Maricopa County creates the appraisal. Further, the appraiser is an unbiased party, with no conditional interest in the property's value, unlike the agent, who gets a commission based upon the value of the home.

What are the contents of an appraisal report? (Go to list of questions)

The main point of an appraisal document is to let the reader know the value of the real estate in question, 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 value opinion.
Characteristics of the property that have a bearing on the value, including: location, physical description, 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 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.
The scope of work considered to complete the appraisal.

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

Once the report is done, how can I have assurance that the value indicated is valid? (Go to list of questions)

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

The appraisal used a suitable analysis of the information.

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

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

That a credible, supportable appraisal report was imparted.

To become a state licensed appraiser, we must fulfill extensive education and experience requirements that train us to formulate an unbiased opinion. Plus, appraisers must follow a strict industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for working up an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Go to list of questions) Licensing and certification takes coursework, tests and experience working under a supervisor. Once licensed, he or she must then take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who hires an appraiser? (Go to list of questions)

Commonly, appraisers are called upon by lenders to render a value opinion on a home involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does an appraiser get the information used to estimate values in Maricopa County or other areas? (Go to list of questions)

One of the most important tasks an appraiser engages in is to gather data. Data can be categorized as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is received from a numerous sources. 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 tax records and other public documents. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood service.

And last but not least, the appraiser assembles 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? (Go to 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. 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. For parties settling an estate or divorce, an appraisal from Desert Sky Appraisers is the best way to ensure assets are split up evenly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making wise financial decisions.

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

PMI stands for Private Mortgage Insurance. This additional plan takes care of the lender in the event a borrower is unable to pay on the loan and the value of the home is lower than the loan balance. 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 mortgage payment have a lineitem for PMI?Call Desert Sky Appraisers today at 480-361-9493 or send us an e-mail. Documentation of your home's present value could save you thousands.

Should I do anything in advance of the appraisal inspection (Go to list of questions)

We start 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 amenities. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house . Trim any bushes and move any items that would make it difficult to measure the structure. On the inside, make sure we can easily access appliances like furnaces and water heaters.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:

Written property agreements, such as a maintenance agreement for a shared driveway.
Title policy that describes encroachments or easements.
Information on "Homeowners Associations" or condominium covenants and fees.
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
Most recent real estate tax bill from Maricopa and or legal description of the property.

Define "Market Value" (Go to 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."

Does the appraisal belong to the bank or the consumer? (Go to list of questions)

For mortgage transactions, the lender requests 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 report - it's usually bundled 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 define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can use the appraisal for any purpose.

Are some home improvements more worthwhile than others? (Go to list of questions)

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

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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, returning 85%. Adding bedrooms and baths can also boost the value of your home (when done well) as long as your home doesn't then become overbuilt for your neighborhood in terms of size.