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Ireland Appraisal Associates, LLC has answers to "Frequently Asked Questions"

Ireland Appraisal Associates, LLC is willing to elaborate on any concerns you might have about appraisals in Bucks County. Don't hesitate to contact us today.

Describe an appraisal
Describe what an appraiser does
What would cause me to require a real estate appraisal?
How is an appraiser different than a home inspector?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What's in an appraisal report?
Upon completion of the appraisal, how can I have confidence that the value conclusion is accurate?
What goes into an appraiser's certification?
Who do appraisers work for?
Where does an appraiser get the information used to estimate values in Bucks County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Does the appraiser need anything from me in advance?
What does "Market Value" mean?
Who actually owns the appraisal report?
Are some home improvements more worthwhile than others?



Describe an appraisal   (Return to top)

An appraiser performs an estimation that produces an opinion of value. This opinion or estimate is found by a formal method that typically uses the three main "common approaches to value". The Cost Approach is one of the methods that appraisers use to find value; it involves concluding what the improvements would cost minus physical deterioration, adding the land value. The Sales Comparison Approach deals with finding comparable homes in the vicinity and finding value based on making a comparison of those houses to the property being appraised. The Sales Comparison Approach is normally the most accurate and clearest indicator of value for a residential property. One of the least common approaches in appraising houses is the Income Approach, which is commonly used to figure the value of a property based on what an investor would pay based on the capital produced by the building.

Describe what an appraiser does   (Return to top)

An appraiser provides a professional, unbiased assessment of market value, to be used in making real estate transactions. Appraisers illustate their analysis in appraisal reports.


What would cause me to require a real estate appraisal?   (Return to top)

There are many reasons to order an appraisal from Ireland Appraisal Associates, LLC with the usual reason being real estate and mortgage transactions. Some other reasons for obtaining an appraisal include:
  • If you are applying for a loan.
  • If you would like to lower your property tax obligations.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove Primary Mortgage Insurance.
  • To contest improperly assessed property taxes.
  • To deal with an estate.
  • To provide you a leg-up when purchasing a home.
  • To figure out a likely sales price when listing your home.
  • 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.
  • If you are ever involved in a lawsuit.
For a more detailed description of the appraisal process click here.


How is an appraiser different than a home inspector?   (Return to top)

The appraiser is not a home inspector nor does he/she do a comprehensive home inspection. A third-party home inspector will judge the structure of the home, from the roof to the bottom. The stereotypical home inspector's report will include an evaluation of the integrity of the property'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.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (Return to top)

Simply put, it's like comparing opera to country. What the CMA depends on are ill-defined trends. Appraisals use similar sales which are verifiable resources. Area and architectural values are also important in an appraisal. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the most significant factor is the person behind the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. A certified, state licensed professional who has formed their livelihood on valuing homes in and around Bucks County is behind the appraisal. Moreover, the appraiser is an unbiased party, with no conditional interest in the property's value, unlike the real estate agent, whose income is tied to the price of the home.

What's in an appraisal report?   (Return to top)

Each appraisal should reflect a supported value opinion and must clearly state the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The reason for the assignment.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraiser's opinions and conclusions.
  • Relevant property characteristics, 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, items that are more or less permanently installed and even intangible considerations.
  • Any 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.
  • What was included in the activity of completing the appraisal.
For a more in depth look at the work that goes into an appraisal report click here: Sample Appraisal Report


Upon completion of the appraisal, how can I have confidence that the value conclusion is accurate?   (Return to top)

In the documentation of an appraisal, each appraiser must ensure the following:
  • That the information analysis utilized in the appraisal was suitable.

  • That grave errors of omission or commission were not committed individually or collectively.

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

  • That a solid, substantiated appraisal report was communicated.
To become a state licensed appraiser, there are intense education requirements as well as on the jobexperience that must be attained - all with the end goal of being able to render unbiased value opinions. Plus, appraisers must follow a strict industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Return to top) Regulations regarding licensing and certification vary from state to state. However, licensing and certification is most often associated with many hours of coursework, tests and real world experience. Once an appraiser is licensed, he/she must then engage in continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who do appraisers work for?   (Return to top)

Most of the time, appraisers are employed by mortgage lenders to estimate the value of a house involved in a loan transaction. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

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

One of the most important things an appraiser does is to compile data. Data can be described as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is gathered from a numerous places. To find out about recently sold homes to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. Tax records and other public documents reveal actual sales prices in a market. Appraisers often 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 product.

And last but not least, the appraiser assimilates general data from his or her collective knowledge gained from doing assignments for other houses in the same market.


How can a licensed appraiser help me?   (Return to top)

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, 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. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value means you can make wise financial decisions.


What exactly is PMI and how can I get rid of it?   (Return to top)

PMI is the common abbreviation for for Private Mortgage Insurance. This supplemental plan protects the lender in case a borrower is unable to pay on the loan and the market price of the house is less than what the borrower still owes on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

Did you secure your mortgage with less than 20% down? Call Ireland Appraisal Associates, LLC today at (215) 444-9887. You may be able to save money by removing your Private Mortgage Insurance premium.

Does the appraiser need anything from me in advance?   (Return to top)

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 status 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. On the outside, trim any bushes so we can be free to get an accurate measurement of outside walls.

You can make the inspection 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.
  • Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
  • Information on "Homeowners Associations" or condominium covenants and fees.
  • Brag sheet that lists major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
  • Most recent real estate tax bill and or legal description of the property.

What does "Market Value" mean?   (Return to 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?   (Return to top)

For mortgage transactions, the lender orders 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 certainly entitled to a copy of the report - it's usually included 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 hiring the appraiser for things outside securing a mortgage. In these scenarios, the appraiser may stipulate 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 do whatever they want with the appraisal.


Are some home improvements more worthwhile than others?   (Return to top)

It really depends on the market. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

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, yielding 85%. Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size.