Daniel Todd Appraisal Services, LLC has answers to "Frequently Asked Questions"

Daniel Todd Appraisal Services, LLC is willing to address any inquiries you might have about appraisals in Monroe County. Don't hesitate to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
Why would someone require a real estate appraisal?
How is an appraisal different than a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What are the contents of an appraisal report?
Once the appraisal is done, what guarantee is there that the final number is accurate?
How are appraisers certified?
Who do appraisers work for?
Where does an appraiser get the information used to estimate values in Monroe County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What is "Market Value?"
Who actually owns the appraisal report?
Which home renovations add the most to the price?



Define the term "Appraisal"   (Top)

An appraisal is a thought process leading to an opinion of value. The real estate appraiser will use a few "approaches," typically three, to draw up the estimation of market value. One of the three is the Cost Approach - which is how much capital would be required to replace the improvements, less physical deterioration and other factors, then adding the land value. Easily the most common approach in finding the likely sales price of a house is the Sales Comparison Approach which involves figuring a comparison to similar houses close by. Being the most popular approach, the Sales Comparison Approach is generally the most precise and best indicator of market value for a residence. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it involves estimating what an investor would pay based on the money generated by the property.

Describe what an appraiser does   (Top)

An appraiser provides an unbiased and well substantiated opinion of market value, often in the context of a real estate exchange. Appraisers present their professional investigation in appraisal reports.


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

There are many reasons to purchase an appraisal from Daniel Todd Appraisal Services, LLC with the most common reason being real estate and mortgage transactions. A few other reasons for purchasing an appraisal report include:
  • To get a loan.
  • To lower your property taxes.
  • To build a case for a homeowner's equity and remove insurance.
  • To contest improperly assessed property taxes.
  • To handle an estate.
  • To offer you a leg-up when purchasing a home.
  • To find a reasonable price when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS require an appraisal on every property.
  • If you are ever involved in a civil case.
Click here for a more detailed explanation of the process involved in getting an appraisal.


How is an appraisal different than a home inspection?   (Top)

Appraisers do not do provide home inspections and are not home inspectors. The purpose of a home inspection is to investigate the structure of the house from foundation to attic. The archetypal house inspector's report will include an evaluation of the integrity of the property'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.

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

To be blunt, it's like comparing Shakespeare to reality TV. The CMA relies on indistinct trends in the market. An appraisal utilizes comparable sales that can be validated by public record. The appraisal report will also contain location and building values. 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 biggest difference is the person 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. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Further, the appraiser is an unbiased party, with no vested interest in the value conclusion, unlike the agent, whose income is tied to the price of the home.

What are the contents of an appraisal report?   (Top)

The main purpose of an appraisal report is to provide a value opinion, and depending on the scope of the report, you'll usually see the following:
  • The client and other intended users.
  • How the appraisal is supposed to be used.
  • The purpose of the assignment.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the value opinion.(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 attributes, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible items.
  • 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 considered while working up the job.
For a more detailed view of what goes into an appraisal report click here: Sample Appraisal Report

Once the appraisal is done, what guarantee is there that the final number is accurate?   (Top)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • That the information analysis implemented in the appraisal was suitable.

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

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

  • That a trustworthy, substantiated appraisal report was imparted.
To become a state licensed appraiser, there are intense education requirements as well as on the jobexperience that must be logged. In addition, appraisers must stick to a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The rules for developing an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Top) Licensing and certification is achieved through classroom study, tests and practical experience. Once an appraiser is licensed, he or she is required to take continuing education courses in order to keep the license current. To see the specific requirements for any state click here.

Who do appraisers work for?   (Top)

Mortgage lenders are an appraiser's most likely 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 Monroe County or other areas?   (Top)

One of the most important things an appraiser does is to assimilate property data. Data can be divided into Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is collected from a many sources. To research recently sold homes to be used as "comps", we often go to the local Multiple Listing Service. Tax records and other public documents reveal actual sales prices in a market. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood system.

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

What can a full appraisal do for me?   (Top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. For those selling a home, you'll want to figure out a price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Daniel Todd Appraisal Services, LLC is the best way to ensure assets are split up 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?   (Top)

PMI is an acronym for Private Mortgage Insurance. This additional plan guards the lender if a borrower doesn't pay on the loan and the value of the property is lower 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 home value appreciated since you first purchased? Contact Daniel Todd Appraisal Services, LLC today at 812-650-3982 to see if you can save money by removing your Private Mortgage Insurance payment.

How do I get ready for the appraiser?   (Top)

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. 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 move any items that would make it difficult to measure the structure. Indoors, make sure we can get to items like furnaces and water heaters.

You can make the inspection go faster and improve the quality of the appraisal report by having the following things on hand:
  • Written property agreements, such as a maintenance agreement for a shared driveway.
  • Title policy that lists encroachments or easements.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
  • A list of "proposed" improvements when the property is being appraised "as complete".

What is "Market Value?"   (Top)

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."

Who actually owns the appraisal report?   (Top)

For mortgage transactions, the lender requests 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 certainly 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.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these cases, the appraiser may define how the appraisal can be used; 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.

Which home renovations add the most to the price?   (Top)

Like all things real estate, this is dependent on a home's location. 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 most value returned 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 boost 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.