Rowley Appraisal Service has answers to "Frequently Asked Questions"


	Rowley Appraisal Service is always more than happy to address any concerns you might have about appraisals in Pocatello and Bannock County. Feel free to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
Why would a person require 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's in an appraisal report?
After completing the appraisal, how can I have certainty that the value indicated is legitimate?
What goes into an appraiser's certification?
Who hires an appraiser?
Where does Rowley Appraisal Service get the data used to estimate values in Bannock County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
How does an appraiser define "Market Value"?
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?

Define the term "Appraisal" (Top)

The appraisal process is an estimation that generates an opinion of value. The appraiser will use a few "approaches," typically three, to come to the estimation of market value. The Cost Approach is one of the methods that appraisers use to find value; it involves discerning what the improvements would cost without physical deterioration, adding the land value. The Sales Comparison Approach involves searching for comparable homes in the vicinity and discovering the value based on making a comparison of those properties to the house being investigated. Being the most commonly used approach, the Sales Comparison Approach is generally the most precise and best indicator of market value for a house. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it deals with estimating what an investor would pay based on the income generated by the property.

Describe what an appraiser does (Top)

An appraiser generates an objective and well substantiated opinion of market value, in the support of real property transactions. Appraisers reveal the details of their professional findings in appraisal reports.

Why would a person require a real estate appraisal? (Top)

There are a lot of reasons to order an appraisal from Rowley Appraisal Service with the usual reason being real estate and mortgage transactions. Other reasons for ordering an appraisal include:

To obtain a loan.
To lower your property taxes.
To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
To challenge inflated property taxes.
To handle an estate.
To provide you a leg-up when purchasing real estate.
To determine the most probable price when selling real estate.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS need an appraisal on every home.
If you are ever involved in a lawsuit.

For a more detailed description of the appraisal process click here.

Is an appraisal the same as a home inspection? (Top)

Home inspectors do not provide an opinion of value and do not do appraisal reports. A third-party home inspector will inspect the structure of the home, from the top to the foundation. For the most part, a home inspection report will evaluate 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, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

My agent performed a CMA for me. Is that the same as an appraisal? (Top)

Simply put, it's like comparing broadband and dial-up. The CMA relies on indistinct market trends. An appraisal relies on comparable sales that can be validated by public record. Also, the appraisal looks at other factors like condition, area and replacement prices. 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 most significant factor is who's doing the report. Real estate agents produce CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, Idaho licensed professional who bases a career on valuing properties in and around Bannock County creates the appraisal. Moreover, the appraiser is an unbiased party, with no vested interest in the value of a home, unlike the agent, who gets a commission based upon the price of the home.

What's in an appraisal report? (Top)

Each report should demonstrate a supported estimate of value and should document 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 appraiser's opinions and conclusions.(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 property rights valued, and non-real estate items included in the valuation, such as personal property, trade fixtures 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.
The scope of work considered when completing the job.

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

After completing the appraisal, how can I have certainty that the value indicated is legitimate? (Top)

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

That the information analysis utilized in the appraisal was appropriate.

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

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

That a trustworthy, substantiated appraisal report was communicated.

To become a state licensed appraiser, we must satisfy intense education and experience requirements that prepare us to formulate an unbiased opinion. Plus, appraisers must abide by a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Top) Licensing and certification takes coursework, tests and practical experience. Once an appraiser is 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? (Top)

Most of the time, appraisers are called upon by lenders to estimate the value of a home involved in a loan transaction - to make sure the real estate is indeed adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Rowley Appraisal Service get the data used to estimate values in Bannock County or other areas? (Top)

One of the main tasks an appraiser must accomplish is to gather property data. Data can be split into Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.

General data is gathered from a many sources. Local Multiple Listing Services (MLS) provide data on recently sold homes that could be used as comparables. To double-check actual sales prices, we look at items in the assessor's office and other public documents. 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 most importantly, the appraiser assimilates general data from his or her past experience in creating appraisals for other properties in the same market.

How can a licensed appraiser help me? (Top)

If you're making some sort of financial decision and the value of your home is relevant, you'll want a full appraisal. If you're selling your house, an appraisal will help you determine a price that maximizes profit and reduces time on the market. 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. Without knowing its real value, wise financial decisions are impossible.

What exactly is PMI and how can I get rid of it? (Top)

PMI is an acronym for Private Mortgage Insurance. PMI takes care of the lender in the event a borrower defaults on the loan and the value of the home is less than what is owed on the loan. 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.


	The savings from cancelling your PMI pays for the appraisal in a matter of months. Nobody is more qualified than Rowley Appraisal Service when it comes to analyzing real estate appreciation in Pocatello and Bannock County. Contact us today.

Should I do anything in advance of the appraisal inspection (Top)

The first step in most appraisals is the property inspection. 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, make sure it is clutter free and that we can access things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of exterior walls.

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

Any information on the purchase of the property for the last three years.
List of personal property to be sold with the building.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
Find copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.
Most recent real estate tax bill and or legal description of the property.

How does an appraiser define "Market Value"? (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."

Does the appraisal belong to the bank or the consumer? (Top)

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 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 engages 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 noted otherwise, the home owner can do whatever they want with the appraisal.

Are some home improvements more worthwhile than others? (Top)

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. 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 weren't far behind, yielding 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.