Jon Kaelberer (303) 888-3774 has answers to "Frequently Asked Questions"


	Jon Kaelberer (303) 888-3774 is prepared to handle any inquiries you might have about appraisals in Douglas County. Contact us today to learn how we can help you with your valuation problems.

Describe an appraisal
What does an appraiser do?
Why would someone need your services?
What is the difference between an appraisal and a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
Upon completion of the appraisal, what assurance is there that the value conclusion is trustworthy?
What are the requirements to be a certified appraiser?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in Douglas County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
Does the appraiser need anything from me in advance?
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?

Describe an appraisal (See list of FAQ's)

The process of producing an appraisal deals with an estimation which leads to an opinion of value. The appraiser will typically use a few "approaches," typically three, to conclude the estimation of market value. One of the processes is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value. The Sales Comparison Approach deals with finding similar homes in close proximity and figuring out the value based on making a comparison of those houses to the property in question. Generally speaking, the Sales Comparison Approach is the most accurate indicator of market value of a residential property. One of the least common approaches in appraising houses is the Income Approach, which is generally used to figure the market value of a property based on 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 offers an objective and well substantiated assessment of market value, often in the context of a real estate exchange. Appraisers document their expert findings in appraisal reports.

Why would someone need your services? (See list of FAQ's)

There are a lot of reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for ordering an report include:

To get a loan.
To lower your property taxes.
To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
To fight inflated property taxes.
To deal with an estate.
To provide you an edge when purchasing a home.
To determine an honest price when selling your home.
To ensure parties are provided just compensation in eminient domain cases.
Because a government agency such as the IRS requires it.
It's possible you could have to deal with being in a lawsuit - an appraisal will help.

Click here for a more extensive explanation of the process involved in getting an appraisal.

What is the difference between an appraisal and a home inspection? (See list of FAQ's)

Appraisers do not do provide home inspections and are not home inspectors. The point of a home inspection is to evaluate the structure of the house from foundation to rooftop. For the most part, a home inspection report will discuss the amenities and the requirements 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.

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

Honestly, they have nothing in common. What the CMA depends on are ill-defined trends. An appraisal is based on comparable sales that can be proven by records. The appraisal report will also contain area and building 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.

But the largest differentiator is the person behind the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, create CMA's. A certified, state licensed professional who made a career on valuing homes in and around Douglas County is behind the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to accept a flat fee for work they perform, regardless of their value conclusion.

What are the contents of an appraisal report? (See list of FAQ's)

Each report should demonstrate a supported 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 appraisal.
The type of value contained and a definition of the value reported.
The effective date of the appraisal.
Characteristics of the property that have a bearing on the value, 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, 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.
What was included in the process of completing the appraisal.

For a more comprehensive view of the work that goes into an appraisal report click here: Sample Appraisal Report

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

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

That the information analysis utilized in the appraisal was proper.

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

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

The final appraisal report was understandable, credible and defensible.

To become a state licensed appraiser, we must satisfy extensive education and experience requirements that train us to formulate an unbiased opinion. In addition, appraisers must abide by a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The rules for developing 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 takes coursework, tests and experience working under a supervisor. Once an appraiser is licensed, he or she must then engage in continuing education courses so the license remains up to date. 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, requiring their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

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

One of the primary things an appraiser does is to collect data. Data can be described 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 while on site.

General data is received from a variety of places. Local Multiple Listing Services (MLS) provide information on recently sold homes that might be used as comparables. To double-check actual sales prices, we use tax records and other public documents that are usually online nowadays. Appraisers routinely 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 service.

And last but not least, the appraiser assembles general data from his or her collective knowledge gained from doing assignments for other houses in the same market.

Why should I hire a licensed appraiser? (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. If you're selling your home, an appraisal helps you set the most appropriate price. When buying, you can avoid overpaying by commissioning an independent appraisal. 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. Knowing its true value is essential to making informed financial decisions.

What exactly is PMI and how can I get rid of it? (See list of FAQ's)

PMI is an acronym for Private Mortgage Insurance. This supplementary plan takes care of the lender in the event a borrower defaults on the loan and the market price of the property 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.


	Has your real estate appreciated since you first purchased? Call Jon Kaelberer (303) 888-3774 today at 3038883774 to see if you can save money by removing your Private Mortgage Insurance payment.

Does the appraiser need anything from me in advance? (See list of FAQ's)

We start with an inspection of the property. During this process, the appraiser 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. On the home's interior, pick up any clutter and make sure we can access things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of outside walls.

You can make the inspection go faster and improve the accuracy of the appraisal report by having the following things on hand:

Written property agreements, such as a maintenance agreement for a shared driveway.
Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
A bill for your most recent real estate taxes which should also contain a legal description of the property.

What does "Market Value" mean? (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)

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 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 engaging the appraiser for things outside securing a mortgage. In these scenarios, the appraiser may state 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.

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

The added value of a particular amenity truly depends on the local market. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!

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 were second, yielding 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size.