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Focus Appraisal Corporation has answers to "Frequently Asked Questions"

Focus Appraisal Corporation is always prepared to answer any inquiries you might have about appraisals or real estate in Huntingdon Valley and Bucks County. Feel free to contact us today.

Describe an appraisal
Describe what an appraiser does
Why would someone need a real estate appraisal?
Is an appraisal the same as a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
After completing the appraisal, how can I have confidence that the value indicated is valid?
What are the requirements to be a certified appraiser?
Who engages the services of appraisers?
Where does an appraiser get the information used to estimate values in Bucks County or other areas?
What can a full appraisal do for me?
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
Define "Market Value"
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?



Describe an appraisal   (List of questions)

An appraisal is an evaluation that concludes with an opinion of value. There are three "common approaches to value" which helps the real estate appraiser come to this opinion or estimate. One of the methods is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, then adding the land value. The most common approach in finding the value of a house is the Sales Comparison Approach which concerns making a comparison to comparable homes close by. The Sales Comparison Approach is commonly the most definitive and clearest indicator of value for a residence. One of the least common approaches in appraising residential properties is the Income Approach, which is mainly used to figure the market value of a property based on what an investor would pay based on the income produced by the property.

Describe what an appraiser does   (List of questions)

An appraiser produces a fair and credible assessment of market value, to be used in making real estate transactions. Appraisers summarize their conclusions in appraisal reports.


Why would someone need a real estate appraisal?   (List of questions)

There are a lot of reasons to purchase an appraisal from Focus Appraisal Corporation with the usual reason being real estate and mortgage transactions. Some other reasons for purchasing an report include:
  • If you are applying for a loan.
  • If you would like to lower your property tax obligations.
  • To show a homeowner has 30% equity and remove insurance.
  • To fight high property taxes.
  • To settle an estate.
  • To provide you an edge when purchasing a home.
  • To find an honest property value when selling your home.
  • To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Government agencies such as the IRS require an appraisal on every property.
  • If you are ever involved in a civil case.
For a more extensive explanation of the appraisal process click here.


Is an appraisal the same as a home inspection?   (List of questions)

Appraisers do not do provide house inspections and are not home inspectors. The purpose of a home inspection is to evaluate the structure of the home from basement to attic. The usual house inspector's report will contain an evaluation of the condition of the home's heating system, 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.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (List of questions)

Simply, they have nothing in common. The CMA utilizes market trends to generate most of their business. An appraisal is based on comparable sales that can be proven by public record. Area and architectural values 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.

But the largest differentiator is who's creating the report. A CMA is created by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. A certified, Pennsylvania licensed professional who has formed a career on valuing properties in and around Bucks County creates the appraisal. Further, the appraiser is an unbiased party, with no vested interest in the value conclusion, unlike the real estate agent, whose income is tied to the price of the home.

What are the contents of an appraisal report?   (List of questions)

The main purpose 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, one will customarily see 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 value opinion.
  • Relevant property characteristics, including: location, physical description, 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.
  • All 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 used while working up the appraisal.
For a more comprehensive view of what goes into an appraisal report click here: Sample Appraisal Report


After completing the appraisal, how can I have confidence that the value indicated is valid?   (List of questions)

In communicating an appraisal report, each appraiser must make sure of the following:
  • That the information analysis utilized in the appraisal was proper.

  • Whether individually or collectively, there were no crucial errors contained in the appraisal, nor any material details left out.

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

  • That a believable, supportable appraisal report was conferred.
To become a state licensed appraiser, we must satisfy considerable education and experience requirements that give us the background to formulate an unbiased opinion. Plus, appraisers must obey a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The rules for carrying out an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (List of questions) Licensing and certification requires coursework, tests and real world experience. Once licensed, he/she must then complete 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 most likely customer, requesting their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

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

Compiling data is one of the main things an appraiser performs. Data can be classified as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser while on site.

General data is gathered from a variety of sources. Local Multiple Listing Services (MLS) have information on recently sold homes that could 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 is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And most importantly, the appraiser assembles general data from his or her collective knowledge gained from creating appraisals for other houses 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 home, an appraisal assists you in setting the most appropriate price. When buying, be sure you're not overpaying by commissioning an independent appraisal. For people settling an estate or divorce, an appraisal from Focus Appraisal Corporation is the best documentation to ensure assets are divided fairly. A home is often the single, largest financial asset anybody owns. Knowing its true value means you can make the right financial decisions.


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

PMI is an acronym for Private Mortgage Insurance. This additional plan protects the lender in the event a borrower is unable to pay on the loan and the market price of the home is lower than the balance of 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 money you keep from cancelling the PMI required when you got your mortgage pays for the appraisal in a matter of months. Focus Appraisal Corporation is in the business of tracking real estate value trends in Huntingdon Valley and Bucks County. Contact us today.

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

The first step in most appraisals is the property inspection. During this process, we 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.

To help expedite our work 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 readily available).
  • Information on any written private easements, such as a shared driveway with a neighbor.
  • Title policy that describes encroachments or easements.
  • Brag sheet that lists major home improvements and upgrades, the date of their installation and their cost (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".

Define "Market Value"   (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."



Does the appraisal belong to the bank or the consumer?   (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 certainly entitled to a copy of the appraisal - it's usually bundled 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 scenarios, the appraiser may state the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can use the appraisal for any purpose.


Are some home improvements more worthwhile than others?   (List of questions)

Like all things real estate, this is dependent on a home's location. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 are right up there with kitchens, returning 85%. Adding bedrooms and baths can also increase 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.