Express Appraisals has answers to "Frequently Asked Questions"

Express Appraisals is more than happy to address any concerns you might have about appraisals or real estate in Tracy and San Joaquin County. Don't hesitate to contact us today.

What is an appraisal?
Describe what an appraiser does
What are the reasons someone would require a real estate appraisal?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
After completing the report, how can I have a guarantee that the value indicated is legitimate?
What goes into an appraiser's certification?
Who do appraisers work for?
Where does Express Appraisals get the information used to estimate values in San Joaquin County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
Do you need anything from me in advance?
How does an appraiser define "Market Value"?
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?



What is an appraisal?   (Back to top)

The method of writing an appraisal deals with an evaluation which leads to an opinion of value. This opinion or estimate is arrived at using a formal process that commonly uses three "common approaches to value". The Cost Approach is one of the methods that real estate appraisers use to find value; it involves concluding what the improvements would cost minus physical degradation, plus the land value. The most common approach in figuring the likely sales price of a home is the Sales Comparison Approach which deals with figuring a comparison to comparable houses close by. The Sales Comparison Approach is commonly the most accurate and clearest indicator of a liklely sales price for a residence. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it deals with estimating what an investor would pay based on the capital produced by the property.

Describe what an appraiser does   (Back to top)

An appraiser produces an unbiased and well supported opinion of market value, often in the context of a real estate exchange. Appraisers present their expert findings in appraisal reports.


What are the reasons someone would require a real estate appraisal?   (Back to top)

There are a lot of reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for purchasing an report include:
  • To receive a loan.
  • If you would like to reduce your property tax burden.
  • To show a homeowner has 30% equity and remove PMI.
  • To fight improperly assessed property taxes.
  • If you need to settle an estate.
  • To offer you a negotiating tool when purchasing a home.
  • To figure out an honest property value when selling your home.
  • 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 ever find yourself in a lawsuit.
For a more detailed explanation of the appraisal process click here.


Is an appraisal the same as 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 bottom to attic. Generally, a home inspection report will explain the amenities and the requirements of the house: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

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

Simply put, it's apples and oranges. The CMA utilizes market trends to conduct most of their business. The appraisal is reliant on similar definite comparable sales. Area and construction values are also precedent in an appraisal. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

The credentials of the person behind the report is actually the most significant difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, California licensed professional who has formed their livelihood on valuing properties in and around San Joaquin County is behind the appraisal. 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 point of an appraisal report 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.
  • The intended use of the appraisal.
  • The appraisal's purpose.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the value opinion.
  • Relevant property characteristics, including: location, physical attributes, legal attributes, economic factors, the real property interest 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 items.
  • All 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 used to complete the job.
For a more in depth look at what goes into an appraisal report click here: Sample Appraisal Report

After completing the report, how can I have a guarantee that the value indicated is legitimate?   (Back to top)

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

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

  • That appraisal services were delivered in a careful and conscientious manner.

  • The final appraisal report was easy to explain, legitimate and conclusive.
To become a state licensed appraiser, we must meet extensive education and experience requirements that train us to formulate an unbiased opinion. Plus, appraisers must stick to a strict industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Back to top) Licensing and certification is achieved through classroom study, tests and real world experience. Once licensed, he/she is required to complete continuing education courses so the license remains current. To see the specific requirements for any state click here.

Who do appraisers work for?   (Back to top)

Most of the time, appraisers are employed by lenders to render a value opinion on a house 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 Express Appraisals get the information used to estimate values in San Joaquin County or other areas?   (Back to top)

Compiling data is one of the primary tasks an appraiser performs. Data can be described as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is received from a many sources. To research recently sold homes to be used as "comps", an appraiser will often go to the local Multiple Listing Service. Tax records and other courthouse documents verify actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, 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 creating appraisals for other houses in the same market.

Why should I hire a licensed appraiser?   (Back to top)

If you're making any kind of financial decision and the value of your home is relevant, you'll want to hire a licensed appraiser. For those selling a home, you'll want to determine 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, 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. Don't make decisions in the dark with a professional appraisal.

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

PMI is the common abbreviation for for Private Mortgage Insurance. This additional policy protects the lender if a borrower defaults on the loan and the market price of the house is less than what is owed on the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.

The amount you keep from cancelling your PMI pays for the appraisal in no time. Express Appraisals stays current with value trends in Tracy and San Joaquin County. Contact us today.

Do you need anything from me in advance?   (Back to top)

We start 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 status of its features. Inside, make sure it is clutter free and that we can get to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of outside walls.

To help speed things along 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 available).
  • List of personal property to be sold with the building.
  • Most recent real estate tax bill and or legal description of the property.
  • 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).
  • Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .

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

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 certainly entitled to a copy of the appraisal - it's usually bundled 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 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 use the appraisal for any purpose.

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

It really depends on the market. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.

As a rule, the best ROI 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, yielding 85%. Adding bedrooms and baths can also help 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.