Brock Appraisal Company, Inc. has answers to "Frequently Asked Questions"


	Brock Appraisal Company, Inc. is prepared to talk to you about any questions you might have about appraisals or real estate in Wahoo and Saunders County. Contact us today to see how we can help solve your specific valuation problems.

Define the term "Appraisal"
What does an appraiser do?
What are the reasons I would request your services?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
After completing the appraisal, what assurance is there that the value indicated is legitimate?
What are the requirements to be a certified appraiser?
Who employs appraisers?
Where does an appraiser get the data used to estimate values in Saunders County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
Define "Market Value"
Who has rights to the appraisal report?
Which home renovations add the most to the price?

Define the term "Appraisal" (Back to top)

An appraiser provides an evaluation that generates an opinion of value. This opinion or estimate is arrived at by a formal method that generally utilizes three "common approaches to value". One of them is the Cost Approach - which is what it would cost to replace the improvements, less physical deterioration and other factors, then adding the land value. The Sales Comparison Approach involves finding similar houses in the vicinity and discerning value based on comparing those prior sales to the property being investigated. Being the most popular approach, the Sales Comparison Approach is generally the most precise and best indicator of market value for a residential property. 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? (Back to top)

An appraiser forumlates a professional, unbiased assessment of market value, often in the context of a real estate sale. Appraisers present their conclusions in appraisal reports.

What are the reasons I would request your services? (Back to top)

There are many reasons to order an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for purchasing an appraisal include:

If you are applying for a loan.
If you would like to lower your property tax burden.
To demonstrate a homeowner's acquired equity and remove insurance.
To fight high property taxes.
To deal with an estate.
To provide you a negotiating tool when purchasing a home.
To find a likely price when listing your home.
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 be involved in a lawsuit - an appraisal will help.

If you need more information about the appraisal process, please click here.

Is an appraisal the same as a home inspection? (Back to top)

Home inspectors do not estimate an opinion of value and do not do appraisal reports. The point of a home inspection is to evaluate the structure of the home from foundation to attic. The general home inspector's report will contain 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 accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

Is an appraisal the same as a comparative market analysis(CMA)? (Back to top)

To be blunt, it's like comparing opera to country. The CMA uses market trends to create most of their business. Appraisals use comparable sales which are valid resources. Area and building costs are also important in an appraisal. 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.

The credentials of the person creating the report is actually 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 bear specific competence when it comes to home valuation. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Moreover, the appraiser is an independent voice, with no vested interest in the value conclusion, unlike the agent, whose income is tied to the price of the home.

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

Each appraisal must reflect a believable estimate of value and must clearly state the following:

The client and other intended users.
The intended use of the appraisal.
The purpose of the appraisal.
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!)
Relevant property characteristics, including: location, physical characteristics, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible considerations.
Any 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 what goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, what assurance is there that the value indicated is legitimate? (Back to top)

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

The appraisal used an apropos analysis of the information.

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

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

That a solid, supportable appraisal report was conferred.

There are rigorous classroom and on the job experience requirements that must be met in order to become a licensed appraiser in Nebraska. In addition, appraisers must obey a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for developing an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Back to top) Licensing and certification requires classroom study, tests and real world experience. Once an appraiser is licensed, he or she is required to engage in continuing education courses in order to keep the license current. To see the specific requirements for any state click here.

Who employs appraisers? (Back to top)

Typically, appraisers are employed by lenders to render a value opinion on real estate involved in a loan transaction. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does an appraiser get the data used to estimate values in Saunders County or other areas? (Back to top)

One of the most important activities of an appraiser is to assimilate data. Data can be divided into Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is collected from a numerous sources. Local Multiple Listing Services (MLS) provide information on recently sold homes that might be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers often need to report when a property lies 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 assimilates general data from his or her past experience in creating appraisals for other houses in the same market.

What can a full appraisal do for me? (Back to top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. When selling your home, an appraisal assists you in setting the most appropriate price. 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. 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? (Back to top)

PMI is short for for Private Mortgage Insurance. This additional policy protects the lender in case a borrower defaults on the loan and the value of the house is less 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 dropping the PMI required when you got your mortgage will make up for the cost of the appraisal in no time. Brock Appraisal Company, Inc. is in the business of tracking real estate value trends in Wahoo and Saunders County. Contact us today.

How do I get ready for the appraiser? (Back to top)

The first step in most appraisals is the home 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 amenities. Inside, pick up any clutter and make sure we can get to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of exterior walls.

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

A survey or plot map of the property and building (if available).
Title policy that lists encroachments or easements.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
Locate copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.
Most recent real estate tax bill from Saunders and or legal description of the property.

Define "Market Value" (Back 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? (Back to top)

For mortgage transactions, the lender orders 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 certainly entitled to a copy of the report - 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.

The exception to this rule is when a home owner hires an appraiser directly. In these cases, the appraiser may define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can use the appraisal for any purpose.

Which home renovations add the most to the price? (Back to top)

It really depends on the market. For example, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!

As a rule, the best ROI 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 were second, returning 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.