Birchler Appraisers has answers to "Frequently Asked Questions"


	Birchler Appraisers is always willing to elaborate on any questions you might have about appraisals or real estate in Ocean County. Contact us today to learn how we can help you with your valuation problems.

What is an appraisal?
What does an appraiser do?
What are the reasons I would need a real estate appraisal?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
Once the assignment has been delivered, what assurance is there that the final number is trustworthy?
What goes into an appraiser's certification?
Who engages the services of appraisers?
Where does Birchler Appraisers get the data used to estimate values in Ocean County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal inspection
How does an appraiser define "Market Value"?
Once complete, who actually owns the appraisal report?
How can I get the most ROI out of home improvements?

What is an appraisal? (Go to list of questions)

The procedure of writing an appraisal report deals with an inspection which forms an opinion of value. There are three "common approaches to value" which assists the real estate appraiser arrive at this opinion or valuation. One of the processes in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the home, less the age and physical dilapidation, plus the land value. Easily the most common approach in finding the value of a house is the Sales Comparison Approach which deals with concluding a comparison to similar houses nearby. The Sales Comparison Approach is normally the most accurate and best indicator of value for a home. One of the least common approaches in appraising homes 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 building.

What does an appraiser do? (Go to list of questions)

An appraiser provides an impartial and well supported opinion of market value, to be used in making real estate transactions. Appraisers document their expert analysis in appraisal reports.

What are the reasons I would need a real estate appraisal? (Go to list of questions)

There are a lot of reasons to order an appraisal from Birchler Appraisers with the most common reason being real estate and mortgage transactions. A few other reasons for ordering an appraisal report include:

To obtain a loan.
To lower your tax burden.
To demonstrate a homeowner's acquired equity and remove PMI.
To contest inflated property taxes.
To deal with an estate.
To give you a leg-up when purchasing real estate.
To determine an honest sales price 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 be involved in a lawsuit - an appraisal will help.

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

What is the difference between an appraisal and a home inspection? (Go to list of questions)

Home inspectors do not figure out an opinion of value and are not appraisers. A third-party home inspector will evaluate the structure of the property, from the roof to the bottom. The standard 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)? (Go to list of questions)

Frankly, it's like comparing broadband and dial-up. The CMA utilizes market trends to conduct most of their business. Appraisals use similar sales which are valid resources. Area and construction costs are also important 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.

The credentials of the person creating the report is frankly the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, generate CMA's. A certified, New Jersey licensed professional who bases their livelihood on valuing real estate in and around Ocean County creates 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 collect only a flat sum for assignments, regardless of their value conclusion.

What can I expect to see in my appraisal report? (Go to list of questions)

The main point of an appraisal document is to give a value opinion, and depending on the scope of the report, one will customarily see the following:

Who engaged the appraiser and other intended users.
How the appraisal is supposed to be used.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the value opinion.
Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic attributes, the property rights valued, 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.
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 to complete the appraisal.

For a more comprehensive look at what goes into an appraisal report click here: Sample Appraisal Report

Once the assignment has been delivered, what assurance is there that the final number is trustworthy? (Go to list of questions)

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

That the information analysis implemented in the appraisal was proper.

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

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

The final appraisal report was clear, sound and conclusive.

To become a state licensed appraiser, there are education requirements as well as experience that must be logged. In addition, appraisers must follow a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for working up an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Go to list of questions) Licensing and certification takes classroom study, tests and real world experience. Once licensed, he/she is required to engage in continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who engages the services of appraisers? (Go to list of questions)

Mortgage lenders are an appraiser's typical customer, using their services to ensure a home involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Birchler Appraisers get the data used to estimate values in Ocean County or other areas? (Go to list of questions)

One of the primary tasks an appraiser engages in is to assimilate property data. Data can be divided into Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.

General data is collected from a variety of places. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. To verify actual sales prices, we look at items in the assessor's office and other public documents that are usually online nowadays. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood system.

And last but not least, the appraiser assembles general data from his or her past experience in creating appraisals for other houses in the same market.

Why do I need a professional appraisal? (Go to list of questions)

An appraisal is a valuable tool whenever your home's value is pertinent to a financial decision. If you're selling your home, an appraisal helps you set the most appropriate price. When buying, be sure you're not 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. Don't make decisions in the dark with a professional appraisal.

My mortgage statement has an item on it for PMI? Can I get rid of that? (Go to list of questions)

PMI is an acronym for Private Mortgage Insurance. It guards the lender if a borrower defaults on the loan and the value of the property is lower than the loan balance. 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.


	Did you have less than 20% to put down on your mortgage? Call Birchler Appraisers today at 7327933333 to see if you can save money by removing your Private Mortgage Insurance payment.

Should I do anything in advance of the appraisal inspection (Go to list of questions)

We start with an inspection of the home. 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 features. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house . Trim any landscaping and relocate any items that would make it difficult to measure the structure. Indoors, make sure the appraiser can easily access appliances like furnaces and water heaters.

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

Records on the latest purchase of the property in the last three years.
Information on any written private easements, such as a shared driveway with a neighbor.
Most recent real estate tax bill from Ocean and or legal description of the property.
Brag sheet that lists major home improvements and upgrades, 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 list of "suggested" improvements when the property is being appraised "as complete".

How does an appraiser define "Market Value"? (Go to list of questions)

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."

Once complete, who actually owns the appraisal report? (Go to list of questions)

In most real estate transactions, the appraisal is ordered by the lender. 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 included with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

This rule doesn't apply 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.

How can I get the most ROI out of home improvements? (Go to list of questions)

The answer to this is different depending upon the location of the home. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

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, yielding 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.