West Coast Appraisal Group has answers to "Frequently Asked Questions"


	West Coast Appraisal Group is willing to talk to you about any questions you might have about appraisals in Bonita and San Diego County. Feel free to contact us today.

What is an appraisal?
What does an appraiser do?
What are the reasons a person would request a real estate appraisal?
How is an appraiser different than a home inspector?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What's in an appraisal report?
After completing the report, how can I have certainty that the value indicated is accurate?
What are the requirements to be a certified appraiser?
Who employs appraisers?
Where does West Coast Appraisal Group get the information used to estimate values in San Diego County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Does the appraiser need anything from the homeowner in advance?
What is "Market Value?"
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?

What is an appraisal? (Return to top)

The appraisal process is an estimation that leads to an opinion of value. This opinion or estimate is found by a formal method that commonly uses three "common approaches to value". The Cost Approach is one of the processes that appraisers use to find value; it involves discerning what the improvements would cost less physical depreciation, plus the land value. Another of the processes is the Sales Comparison Approach - which concerns discovering a comparison to other similar properties within a close vicinity which have recently sold. Usually, the Sales Comparison Approach is the most definite indicator of market value of a residential property. 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 capital a property would bring in.

What does an appraiser do? (Return to top)

An appraiser produces a professional, unbiased determination of market value, to be used in making real estate transactions. Appraisers demonstrate their investigation in appraisal reports.

What are the reasons a person would request a real estate appraisal? (Return to top)

There are a lot of reasons to get an appraisal from West Coast Appraisal Group with the most common reason being real estate and mortgage transactions. Some other reasons for getting an appraisal report include:

To obtain a loan.
If you would like to reduce your property tax burden.
To build a case for a homeowner's equity and remove PMI.
To fight inflated property taxes.
To deal with an estate.
To provide you an edge when purchasing real estate.
To determine a reasonable 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 need an appraisal on every property.
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 appraiser different than a home inspector? (Return to top)

The appraiser is not a home inspector and he or she does not do a complete home inspection. The point of a home inspection is to investigate the structure of the home from foundation to rooftop. The usual home inspector's report will include an evaluation of the condition of the house'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.

What is the difference between an appraisal and a comparative market analysis (CMA)? (Return to top)

Simply, they have nothing in common. The CMA uses market trends to create most of their business. An appraisal relies on comparable sales that can be validated by public record. Also, the appraisal verifies other factors like condition, location and building costs. All a CMA does is generate a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the biggest difference is the person behind the report. A CMA is written 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 produce by a licensed, certified professional who makes a living out of valuing properties. Moreover, the appraiser is an unbiased party, with no conditional interest in the value of a home, unlike the agent, whose income is tied to the value of the home.

What's in an appraisal report? (Return to top)

Every appraisal should reflect a believable value opinion and must clearly state the following:

Who engaged the appraiser and other intended users.
How the appraisal is supposed to be used.
The reason for the assignment.
The type of value reported and a definition of that value.
The effective date of the value opinion.(Sometimes this is in the past or maybe the future for new construction!)
Pertinent property characteristics, 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, items that are more or less permanently installed and even intangible considerations.
Any 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.
What was involved in the process of completing the appraisal.

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

After completing the report, how can I have certainty that the value indicated is accurate? (Return to top)

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

That the information analysis utilized in the appraisal was suitable.

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

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

That a solid, supportable appraisal report was communicated.

There are intense education and experience requirements that must be fulfilled in order to achieve the status of "licensed appraiser" in California. Likewise, appraisers must obey a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for working up an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Return to top) Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. However, licensing and certification typically translates to many hours of classroom study, tests and experience working under a supervisor. Once an appraiser is licensed, he/she is required to engage in continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who employs appraisers? (Return to top)

Mortgage lenders are an appraiser's typical customer, requiring their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does West Coast Appraisal Group get the information used to estimate values in San Diego County or other areas? (Return to top)

Compiling data is one of the main things an appraiser does. Data can be classified as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is gathered from a many places. To find out about recently sold homes to be used as "comps", we 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 service.

And most importantly, the appraiser assembles general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.

How can a licensed appraiser help me? (Return to top)

An appraisal is a valuable tool whenever your home's value is relevant to some financial decision. If you're selling your home, an appraisal helps you set a price that maximizes profit and reduces time on the market. When buying, be sure you're not overpaying by getting an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. 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? (Return to top)

PMI stands for Private Mortgage Insurance. It takes care of the lender in the event a borrower defaults on the loan and the market price of the house 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.


	Does your monthly house payment include a fee for PMI?Call West Coast Appraisal Group today at 619) 397-2999 or send us an e-mail. A new appraisal could save you thousands.

Does the appraiser need anything from the homeowner in advance? (Return to top)

We begin with an inspection of the property. During this process, we will come to your home and measure it, determine the layout of the rooms inside, confirm all aspects of the home's general condition, and take several photos of your house for inclusion in the report. Inside, make sure it is clutter free and that 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 speed things along plus ensure a more accurate report, try if possible to have the following items:

A plot plan or survey of the house and land (if available).
Information on any written private agreements, such as a shared driveway with a neighbor.
A bill for your most recent real estate taxes which should also contain a legal description of the property.
A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .

What is "Market Value?" (Return to top)

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? (Return to 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 entitled to a copy of the appraisal - it's usually bundled 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 hiring the appraiser for things outside securing a mortgage. In these cases, the appraiser may stipulate 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? (Return to top)

Like all things real estate, this is dependent on a home's location. 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. 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%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.