PureValuation has answers to "Frequently Asked Questions"


	PureValuation is eager to reply to any inquiries you might have about appraisals in Lancaster County. Contact us today to see how we can help solve your valuation problems.

Describe an appraisal
Describe what an appraiser does
What are the reasons a person would need a real estate appraisal?
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?
Once the report has been delivered, what guarantee is there that the value conclusion is trustworthy?
How difficult is it to become certified?
Who employs appraisers?
Where does PureValuation get the information used to estimate values in Lancaster 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 does "Market Value" mean?
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?

Describe an appraisal (Back to top)

An appraisal report is an estimation allowing the appraiser to come to an opinion of value. The real estate appraiser will typically use a several "approaches," typically three, to arrive at the estimation of market value. One of the processes in use is the Cost Approach, which finds what it would cost to restore the improvements to the house, less the depreciation and physical deterioration, plus the land value. Another of the processes is the Sales Comparison Approach - which concerns discovering a comparable analysis to other similar properties within a close vicinity which have recently sold. Being the most commonly used approach, the Sales Comparison Approach is considered the most precise and best indicator of market value for a house. One of the least common approaches in appraising houses is the Income Approach, which is mainly used to find the value of a property based on what an investor would pay based on the income produced by the building.

Describe what an appraiser does (Back to top)

An appraiser provides an objective and well justified determination of market value, often in the context of a real estate sale. Appraisers summarize their expert analysis in appraisal reports.

What are the reasons a person would need a real estate appraisal? (Back to top)

There are a lot of reasons to order an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for obtaining an report include:

To obtain a loan.
If you would like to lower your property tax burden.
To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
To fight inflated property taxes.
To settle an estate.
To give you a leg-up when purchasing a home.
To figure out a reasonable price when selling real estate.
To protect 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.

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

How is an appraisal different than a home inspection? (Back to top)

Appraisers do not do perform home inspections and are not home inspectors. The point of a home inspection is to evaluate the structure of the property from basement to rooftop. The stereotypical property inspector's report will contain an evaluation of the condition of the house'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.

Is an appraisal the same as a comparative market analysis(CMA)? (Back to top)

To be honest, they share nothing in common. What the CMA depends on are ill-defined trends. Appraisals use comparable sales which are verifiable resources. Also, the appraisal checks other factors like condition, area and construction prices. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the most significant factor is who's creating the report. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon fee for work they perform, regardless of their value conclusion.

What does the appraisal report contain? (Back to top)

Every report should reflect a believable estimate of value and should identify the following:

The client and other intended users.
How the appraisal is supposed to be used.
The purpose of the appraisal.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraiser's opinions and conclusions.(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 factors, the property rights in question, and non-real estate items included in the valuation, 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 other items of a similar nature.
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 in depth look at the work that goes into an appraisal report click here: Sample Appraisal Report

Once the report has been delivered, what guarantee is there that the value conclusion is trustworthy? (Back to top)

In the documentation of an appraisal, each appraiser must ensure the following:

The appraisal used a suitable analysis of the information.

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

That appraisal services were done in a careful and judicious manner.

That a trustworthy, substantiated appraisal report was conferred.

To become a state licensed appraiser, there are intense education requirements as well as practical experience that must be attained - all with the end goal of gaining the skills required to render unbiased value opinions. Plus, appraisers must stick to a strict industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for working up an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Back to top) Regulations regarding licensing and certification are different from state to state. In general, licensing and certification is most often associated with many hours of coursework, tests and experience working under a supervisor. Once an appraiser is licensed, he or she is required to take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers? (Back to top)

Typically, appraisers are hired by lenders to estimate the value of a home involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does PureValuation get the information used to estimate values in Lancaster County or other areas? (Back to top)

Gathering data is one of the primary activities of an appraiser. Data can be split into Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.

General data is received from a variety of places. Local Multiple Listing Services (MLS) have information on recently sold homes that could be used as comparables. To verify actual sales prices, we research tax records and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood product.

And most importantly, the appraiser gathers 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? (Back 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. If you're selling your home, an appraisal helps you set a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. Simply put, a home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making the right financial decisions.

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

PMI is short for for Private Mortgage Insurance. It covers the lender in case a borrower doesn't pay on the loan and the value of the home is less than what is owed on the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.


	The savings from cancelling your PMI will make up for the price of the appraisal in a matter of months. Nobody is more qualified than PureValuation when it comes to analyzing real estate appreciation in Leola and Lancaster County. Contact us today.

How do I get ready for the appraiser? (Back to top)

We start with an inspection of the property. During this process, the appraiser 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 the appraiser has easy access to the exterior of the house . Trim any shrubs and relocate any items that would make it difficult to measure the structure. Indoors, make sure we can easily access appliances like furnaces and water heaters.

To help expedite our work as well as ensure a more accurate report, try if possible to have the following items:

A plot plan or survey of the house and land (if readily available).
List of personal property to be sold with the home.
Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .
A list of any 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).
A bill for your most recent real estate taxes which should also contain a legal description of the property.

What does "Market Value" mean? (Back 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 has rights to the appraisal report? (Back to top)

For mortgage transactions, the lender orders 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 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.

The exception to this rule is when a home owner hires an appraiser directly. 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 stated otherwise, the home owner can use the appraisal for any purpose.

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

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're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

As a rule, the best ROI from renovating a home comes in the kitchen. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms weren't far behind, yielding 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 atypical for your neighborhood in terms of size.