Quantum Appraisals, Inc. has answers to "Frequently Asked Questions"


	Quantum Appraisals, Inc. is willing to answer any concerns you might have about appraisals or real estate in Granite Bay and Placer County. Contact us today to learn how we can help you with your specific valuation problems.

Define the term "Appraisal"
What does an appraiser do?
What are the reasons someone would request services from Quantum Appraisals, Inc.?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
Upon completion of the report, how can I have confidence that the value conclusion is legitimate?
What does it mean for an appraiser to be licensed?
Who engages the services of appraisers?
Where does an appraiser get the information used to estimate values in Placer County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Does the appraiser need anything from the homeowner in advance?
What does "Market Value" mean?
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?

Define the term "Appraisal" (List of questions)

An appraisal report is an investigation allowing the appraiser to come to an opinion of value. There are three "common approaches to value" which assists the real estate appraiser come to this opinion or valuation. One of the processes is the Cost Approach - which is how much capital would be required to replace the improvements, less physical deterioration and other factors, plus the land value. The Sales Comparison Approach involves searching for comparable houses nearby and figuring out the value based on comparing those prior sales to the home in question. Usually, the Sales Comparison Approach is the most definite indicator of market value of a residential property. The Income Approach is mainly used for finding the market value of income-producing properties based on what an investor would pay based on the amount of income a property would bring in.

What does an appraiser do? (List of questions)

An appraiser provides an objective and well substantiated determination of market value, often in the context of a real estate purchase. Appraisers exhibit their conclusions in appraisal reports.

What are the reasons someone would request services from Quantum Appraisals, Inc.? (List of questions)

There are many reasons to order an appraisal from Quantum Appraisals, Inc. with the usual reason being real estate and mortgage transactions. Some other reasons for ordering an report include:

To get a loan.
To reduce your property taxes.
To help a homeowner realize if they owe less than 80% of their home's value and remove Primary Mortgage Insurance.
To fight improperly assessed property taxes.
To deal with an estate.
To provide you a negotiating tool when purchasing real estate.
To find an honest property value when putting your home on the market.
To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
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 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? (List of questions)

Home inspectors do not come to an opinion of value and are not appraisers. A third-party home inspector will judge the structure of the property, from the roof to the foundation. The standard property inspector's report will contain an evaluation of the integrity of the house's heating system, 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.

Is an appraisal the same as a comparative market analysis(CMA)? (List of questions)

To be blunt, it's like comparing opera to country. The CMA depends on indistinct market trends. The appraisal is based on specific valid comparable sales. Area and construction prices are also a priority in an appraisal. All a CMA does is generate a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the biggest difference is who's creating 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, California licensed professional who bases a career on valuing real estate in and around Placer County is behind the appraisal. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a previously agreed upon sum for work they perform, regardless of their outcome.

What does the appraisal report contain? (List of questions)

The main point of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, you'll usually see the following:

Who engaged the appraiser and other intended users.
How the appraisal is supposed to be used.
The purpose of the appraisal.
The type of value reported and a definition of the value reported.
The effective date of the appraisal.(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 characteristics, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible considerations.
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 when 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 report, how can I have confidence that the value conclusion is legitimate? (List of questions)

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

That the information analysis utilized in the appraisal was appropriate.

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

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

That a credible, supportable appraisal report was communicated.

To become a state licensed appraiser, there are intense education requirements as well as real world experience that must be logged. Likewise, appraisers must obey a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for developing an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(List of questions) Licensing and certification requires classroom study, tests and practical experience. Once an appraiser is licensed, he/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 engages the services of appraisers? (List of questions)

Mortgage lenders are an appraiser's typical client, using their services to ensure a home involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does an appraiser get the information used to estimate values in Placer County or other areas? (List of questions)

One of the most important tasks an appraiser engages in is to collect property data. Data can be classified 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 while on site.

General data is collected from a variety of sources. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. To double-check actual sales prices, we research tax records and other public documents. Appraisers often need to report when a property is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

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

What can a full appraisal do for me? (List of questions)

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 house, 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 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? (List of questions)

PMI is short for for Private Mortgage Insurance. It covers the lender in the event a borrower is unable to pay on the loan and the value of the home is less than the balance of the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	The savings from dropping your PMI pays for the appraisal in a matter of months. Quantum Appraisals, Inc. has years of experience with real estate value trends in Granite Bay and Placer County. Contact us today.

Does the appraiser need anything from the homeowner in advance? (List of questions)

We begin with an inspection of the property. 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. On the home's interior, make sure it is clutter free and that we can find our way to 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.

To help speed things along plus ensure a more accurate report, attempt if possible to have the following items:

A plot plan or survey of the house and land (if available).
Written property agreements, such as a maintenance agreement for a shared driveway.
Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
Brag sheet that lists major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

What does "Market Value" mean? (List of questions)

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? (List of questions)

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 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 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? (List of questions)

A home's location - what city it is in and even what part of that city - is key to this popular question. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.

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 weren't far behind, returning 85%. Adding bedrooms and baths can also help the value of your home (when done well) as long as your home doesn't then become an oddball for your neighborhood in terms of size.