Arizona Premier Appraisers has answers to "Frequently Asked Questions"


	Arizona Premier Appraisers is eager to answer any questions you might have about appraisals or real estate in Maricopa County. Contact us today to see how we can help you with your valuation problems.

Define the term "Appraisal"
What does an appraiser do?
What are the reasons a person would request your services?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What's in an appraisal report?
Upon completion of the report, what guarantee is there that the value conclusion is accurate?
How difficult is it to become certified?
Who are an appraiser's customers?
Where does Arizona Premier Appraisers get the information used to estimate values in Maricopa County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
How do I get ready for the appraiser?
What does "Market Value" mean?
Once complete, who actually owns the appraisal report?
How can I get the most ROI out of home improvements?

Define the term "Appraisal" (See list of FAQ's)

An appraisal report is a thought process allowing the appraiser to come to an opinion of value. The appraiser will typically use a several "approaches," typically three, to arrive at the estimation of market value. One of the three is the Cost Approach - which is what it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. Easily the most common approach in figuring the likely sales price of a house is the Sales Comparison Approach which deals with figuring a comparison to comparable homes close by. Being the most popular approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a home. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it involves estimating what an investor would pay based on the income produced by the property.

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

An appraiser forumlates a professional, unbiased determination of market value, often in the context of a real estate purchase. Appraisers show their expert findings in appraisal reports.

What are the reasons a person would request your services? (See list of FAQ's)

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

To obtain a loan.
If you would like to reduce your property tax burden.
To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
To fight high property taxes.
To deal with an estate.
To offer you a leg-up when purchasing a home.
To find a reasonable property value when putting your home on the market.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS need an appraisal on every home.
It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.

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

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

Appraisers do not do provide residential property inspections and are not home inspectors. An inspection is a third-party evaluation of the available structure and electrical and mechanical systems of a property, from the top to the foundation. Usually, a home inspection report will evaluate the amenities and the requirements of the property: air conditioning (weather permitting), electrical systems, 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 other visible structures.

What is the difference between an appraisal and a comparative market analysis (CMA)? (See list of FAQ's)

Simply put, it's apples and oranges. The CMA utilizes market trends to generate most of their business. The appraisal is reliant on specific proven comparable sales. Location and construction costs are also a priority in an appraisal. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

The person behind the report is hands down the biggest difference between a CMA and an appraisal. A CMA is created by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Moreover, the appraiser is an unbiased party, with no vested interest in the value of a home, unlike the real estate agent, who gets a commission based upon the value of the home.

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, one will customarily see the following:

The client and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The reason for the assignment.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the value opinion.(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 description, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible factors.
All known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and other items of a similar nature.
Division of interest, such as fractional interest, physical segment and partial holding.
The scope of work considered to complete the assignment.

For a more detailed view of what goes into an appraisal report click here: Sample Appraisal Report

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

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

The appraisal contained a suitable analysis of the information.

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

That appraisal services were done in a careful and conscientious fashion.

The final appraisal report was understandable, credible and not easily discredited.

There are intense education and on the job experience requirements that must be met in order to become a licensed appraiser in Arizona. Plus, appraisers must abide by a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for carrying out an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's) Licensing and certification requires classroom study, tests and practical experience. Once an appraiser is licensed, he or she is required to engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

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

Mortgage lenders are an appraiser's typical customer, using their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Arizona Premier Appraisers get the information used to estimate values in Maricopa County or other areas? (See list of FAQ's)

Compiling information is one of the primary tasks an appraiser performs. Data can be categorized as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.

General data is collected from a variety of places. To research recent sales to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. Tax records and other courthouse documents verify actual sales prices in a market. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood servers.

And most importantly, the appraiser assembles general data from his or her past experience in creating appraisals for other properties in the same market.

Why do I need a professional appraisal? (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. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value means you can make the right 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. PMI takes care of the lender in case a borrower doesn't pay on the loan and the value of the house is less 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.


	Did you have less than 20% to put down on your mortgage? Contact Arizona Premier Appraisers today at 602-717-3606. You may be able to save money by removing your Private Mortgage Insurance premium.

How do I get ready for the appraiser? (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 condition of its features. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house . Trim any shrubs and relocate any items that would get in our way while we measure the structure. On the inside, make sure the appraiser can get to 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:

Any records on the purchase of the property for the last three years.
A list of any personal property that is part of the home and you intend to be sold with the home, such as a oven, or a washer and dryer, if applicable.
A bill for your most recent real estate taxes which should also contain a legal description of the property.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
Locate copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.

What does "Market Value" mean? (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."

Once complete, who actually owns the appraisal report? (See list of FAQ's)

In most real estate transactions, the appraisal is ordered by the lender. 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 entitled 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 cases, the appraiser may state 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 use the appraisal for any purpose.

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

The answer to this is different depending upon the location of the home. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

No matter where you go, however, renovating a kitchen is almost always a safe move. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms weren't far behind, returning 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.