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

Midwest Appraisal Associates, LLC is always ready to reply to any inquiries you might have about appraisals in Mason and Warren County. Don't hesitate to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
What are the reasons I would require your services?
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?
After completing the appraisal, what guarantee is there that the final number is legitimate?
How difficult is it to become certified?
Who do appraisers work for?
Where does Midwest Appraisal Associates, LLC get the data used to estimate values in Warren County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
How does an appraiser define "Market Value"?
Who has rights to the appraisal report?
I want to get more for my house. Where should I spend money renovating?



Define the term "Appraisal"   (List of questions)

The procedure of creating an appraisal report consists of an inspection which forms an opinion of value. The real estate appraiser must use a few "approaches," typically three, to come to the estimation of market value. The Cost Approach is one of the processes that real estate appraisers use to find the value of a property; it involves finding what the improvements would cost without physical deterioration, adding the land value. Another of the processes is the Sales Comparison Approach - which concerns finding a comparable analysis to other similar properties within a close proximity which have recently sold. The Sales Comparison Approach is normally the most definitive and best indicator of value for a house. One of the least common approaches in appraising homes is the Income Approach, which is mainly used to figure 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   (List of questions)

An appraiser provides a professional, unbiased opinion of market value, often in the context of a real estate sale. Appraisers exhibit their conclusions in appraisal reports.


What are the reasons I would require your services?   (List of questions)

There are a lot of reasons to obtain an appraisal with the most common reason being real estate and mortgage transactions. Some other reasons for getting an appraisal include:
  • To obtain a loan.
  • If you would like to reduce your property tax burden.
  • To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
  • To fight inflated property taxes.
  • If you need to settle an estate.
  • To provide you a negotiating tool when purchasing real estate.
  • To determine the most probable price when listing your home.
  • To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Because an official agency such as the IRS requires it.
  • If you are ever involved in a lawsuit.
If you need more information about the appraisal process, please click here.


How is an appraisal different than a home inspection?   (List of questions)

The appraiser is not a home inspector and does not do a complete home inspection. An inspection is a third-party investigation of the available structure and appliances of a home, from the roof to the bottom. Usually, a home inspection report will evaluate the amenities and the requirements of the house: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

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

Simply put, it's like comparing Shakespeare to reality TV. The CMA uses market trends to generate most of their business. An appraisal is based on comparable sales that can be verified by public record. In addition, the appraisal verifies other factors like condition, location and construction costs. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the largest differentiator is the person doing the report. Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, state licensed professional who bases a career on valuing real estate in and around Warren County creates the appraisal. Further, the appraiser is an unbiased party, with no conditional interest in the property's value, unlike the agent, who gets a commission based upon the value of the home.

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

Each report should demonstrate a believable value opinion and must clearly state the following:
  • The client and whose purposes the appraisal is to serve.
  • The intended use of the appraisal.
  • 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!)
  • Relevant property attributes, including: location, physical characteristics, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible items.
  • 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.
  • What was included in the activity of completing the job.
For a more comprehensive look at all that goes into an appraisal report click here: Sample Appraisal Report


After completing the appraisal, what guarantee is there that the final number is legitimate?   (List of questions)

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

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

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

  • The final appraisal report was easy to explain, sound and conclusive.
There are intense classroom and on the job experience requirements that must be met in order to get an appraisal license in Ohio. In addition, appraisers must stick to a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The rules for working up an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (List of questions) Licensing and certification is achieved through classroom study, tests and practical experience. Once an appraiser is licensed, he/she must then engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who do appraisers work for?   (List of questions)

Typically, appraisers are hired by lenders to render a value opinion on a home involved in a loan transaction - to make sure the subject is indeed adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Midwest Appraisal Associates, LLC get the data used to estimate values in Warren County or other areas?   (List of questions)

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

General data is received from a variety of sources. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. To double-check actual sales prices, we look at items in the assessor's office and other public documents that are usually online nowadays. Appraisers routinely need to report when a property lies 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 assimilates general data from his or her past experience in creating appraisals for other properties in the same market.


Why should I hire a licensed appraiser?   (List of questions)

If you're involved in any kind of financial decision and the value of your home matters, you'll want a full appraisal. For those selling a home, you'll want to determine the price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. When buying, you can avoid overpaying by getting 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 the right financial decisions.


What exactly is PMI and how can I get rid of it?   (List of questions)

PMI is an acronym for Private Mortgage Insurance. It protects the lender in case a borrower defaults on the loan and the market price 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.

The amount you keep from cancelling the PMI required when you got your mortgage pays for the appraisal in no time. Midwest Appraisal Associates, LLC stays current with real estate value trends in Mason and Warren County. Contact us today.

How do I get ready for the appraiser?   (List of questions)

The first step in most appraisals is the home inspection. 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. The best thing you can do to help is make sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any bushes 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 the inspection go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • A plot plan or survey of the house and land (if readily available).
  • A list of any personal property that will be left behind and sold with the home, such as a oven, or a washer and dryer, if applicable.
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
  • Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .

How does an appraiser define "Market Value"?   (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."



Who has rights to the appraisal report?   (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 report - it's usually bundled 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 define how the appraisal can be used; 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.


I want to get more for my house. Where should I spend money renovating?   (List of questions)

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

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%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.