Cedar Canyon Appraisal Services, Inc has answers to "Frequently Asked Questions"


	Cedar Canyon Appraisal Services, Inc is always willing to answer any inquiries you might have about appraisals or real estate in Allen County. Contact Cedar Canyon Appraisal Services, Inc today to learn how we can help solve your valuation problems.

Define the term "Appraisal"
What does an appraiser do?
Why would a person request services from Cedar Canyon Appraisal Services, Inc?
What is the difference between an appraisal and a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What's in an appraisal report?
Once the report is done, how can I have a guarantee that the final number is veritable?
How are appraisers certified?
Who are an appraiser's customers?
Where does an appraiser get the data used to estimate values in Allen County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
Define "Market Value"
Once complete, who actually owns the appraisal report?
How can I get the most ROI out of home improvements?

Define the term "Appraisal" (Back to top)

An appraisal is an investigation that concludes with an opinion of value. The appraiser will typically use a number of "approaches," typically three, to conclude the estimation of market value. The Cost Approach is one of the methods that appraisers use to find value; it involves figuring what the improvements would cost minus physical deterioration, adding the land value. The Sales Comparison Approach involves searching for similar homes nearby and discerning value based on comparing those prior sales to the home being appraised. Being the most popular approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a property. The Income Approach is generally used for determining the market value of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in.

What does an appraiser do? (Back to top)

An appraiser provides an objective and well substantiated assessment of market value, to be used in making real estate transactions. Appraisers present their professional findings in appraisal reports.

Why would a person request services from Cedar Canyon Appraisal Services, Inc? (Back to top)

There are many reasons to obtain an appraisal from Cedar Canyon Appraisal Services, Inc with the most common reason being real estate and mortgage transactions. Some other reasons for obtaining an appraisal include:

To receive 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 contest improperly assessed property taxes.
If you need to settle an estate.
To provide you an edge when purchasing a home.
To determine an honest sales price 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 need an appraisal on every house.
If you ever find yourself in a lawsuit.

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

What is the difference between an appraisal and a home inspection? (Back 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 house, from the top to the bottom. The usual property inspector's report will contain 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? (Back to top)

To be blunt, it's like comparing broadband and dial-up. The CMA utilizes market trends to generate most of their business. Appraisals use comparable sales which are valid resources. The appraisal report will also include location and building prices. All a CMA does is generate a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

The credentials of the person behind the report is hands down the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA's. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Further, the appraiser is an independent voice, with no conditional interest in the value conclusion, unlike the real estate agent, who gets a commission based upon the value of the home.

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

The main objective of an appraisal document is to provide a value opinion, and depending on the scope of the report, you'll usually see the following:

Who engaged the appraiser and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The appraisal's purpose.
The type of value reported and a definition of that value.
The effective date of the appraisal.
Relevant property characteristics, including: location, physical characteristics, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible items.
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 job.

For a more comprehensive view of the work that goes into an appraisal report click here: Sample Appraisal Report

Once the report is done, how can I have a guarantee that the final number is veritable? (Back to top)

In communicating an appraisal report, each appraiser must ensure the following:

That the information analysis utilized in the appraisal was appropriate.

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

That appraisal services were not carried out in a careless or negligent manner.

The final appraisal report was clear, legitimate and conclusive.

To become a state licensed appraiser, we must fulfill considerable education and experience requirements that prepare us to formulate an unbiased opinion. In addition, appraisers must obey a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for working up an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Back to top) Licensing and certification takes 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 current. To see the specific requirements for any state click here.

Who are an appraiser's customers? (Back to top)

Most of the time, appraisers are called upon by lenders to estimate the value of real estate involved in a loan transaction. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does an appraiser get the data used to estimate values in Allen County or other areas? (Back to top)

One of the most important tasks an appraiser performs is to collect property data. Data can be described as either Specific or General. Specific data is collected 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 numerous sources. To find out about recently sold homes to be used as "comps", we often go to the local Multiple Listing Service. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood system.

And last but not least, the appraiser assimilates 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? (Back to top)

An appraisal is a worthwhile whenever your home's value is relevant to a financial decision. 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. When buying, be sure you're not overpaying by commissioning an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making informed financial decisions.

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

PMI stands for Private Mortgage Insurance. This additional policy protects the lender in the event a borrower defaults on the loan and the value of the house is lower than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	The savings from dropping your PMI will make up for the price of the appraisal in no time. Cedar Canyon Appraisal Services, Inc is a name you can trust when it comes to value trends in Fort Wayne and Allen County. Contact us today.

Should I do anything in advance of the appraisal inspection (Back to top)

We begin with an inspection of the home. 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 condition of its features. On the home's interior, pick up any clutter and make sure we can find our way to 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, try if possible to have the following items:

A plot plan or survey of the house and land (if readily available).
A list of any personal property that is part of the home and you intend to be sold with the home, such as a oven, or a washer and dryer, if applicable.
Most recent real estate tax bill and or legal description of the property.
Brag sheet that lists major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

Define "Market Value" (Back to top)

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."

Once complete, who actually owns the appraisal report? (Back to top)

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 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.

This rule doesn't apply when a home owner hires an appraiser directly. In these situations, 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.

How can I get the most ROI out of home improvements? (Back 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 were second, yielding 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.