Advantage Appraisal has answers to "Frequently Asked Questions"

Advantage Appraisal is willing to reply to any concerns you might have about appraisals or real estate in St. Charles and Saint Charles County. Don't hesitate to contact us today.

Define the term "Appraisal"
What does an appraiser do?
Why would a person need a real estate appraisal?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
Upon completion of the appraisal, what assurance is there that the value conclusion is accurate?
What are the requirements to be a certified appraiser?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in Saint Charles County or other areas?
How can a licensed appraiser help me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
How do I get ready for the appraiser?
Define "Market Value"
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?



Define the term "Appraisal"   (List of questions)

The method of performing an appraisal deals with an evaluation which forms an opinion of value. The appraiser will typically use a number of "approaches," typically three, to come to the estimation of market value. One of the methods in use is the Cost Approach, which finds what it would cost to restore the improvements to the home, minus age and physical deterioration, adding the land value. The Sales Comparison Approach deals with finding comparable houses in close proximity and finding value based on making a comparison of those prior sales to the property being appraised. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a home. 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 money generated by the property.

What does an appraiser do?   (List of questions)

An appraiser provides an impartial and well supported opinion of market value, often in the context of a real estate purchase. Appraisers present their professional analysis in appraisal reports.


Why would a person need a real estate appraisal?   (List of questions)

There are many reasons to purchase an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for obtaining an report include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax burden.
  • To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
  • To fight inflated property taxes.
  • To handle an estate.
  • To offer you an edge when purchasing real estate.
  • To find a likely price when selling real estate.
  • To defend 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.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.
For a more extensive description of the appraisal process click here.


How is an appraiser different than a home inspector?   (List of questions)

Appraisers do not do provide house inspections and are not home inspectors. A third-party home inspector will inspect the structure of the house, from the top to the foundation. For the most part, a home inspection report will evaluate the amenities and the necessities 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, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

Is an appraisal the same as a comparative market analysis(CMA)?   (List of questions)

Simply, they have nothing in common. The CMA depends on indistinct trends in the market. Appraisals use comparable sales which are verifiable resources. Area and construction values are also precedent 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.

The person behind the report is actually the biggest difference between a CMA and an appraisal. Real estate agents produce CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, state licensed professional who has formed a career on valuing properties in and around Saint Charles County creates the appraisal. Further, the appraiser is an unbiased party, with no vested interest in the value conclusion, unlike the agent, who gets a commission based upon the price of the home.

What does the appraisal report contain?   (List of questions)

Each appraisal must indicate a believable value opinion and will identify the following:
  • Who engaged the appraiser and other intended users.
  • The intended use of the appraisal.
  • The appraisal's purpose.
  • The type of value reported and a definition of the value reported.
  • The effective date of the value opinion.(Sometimes this is in the past or maybe the future for new construction!)
  • Pertinent property attributes, including: location, physical characteristics, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the appraisal, such as personal property, trade fixtures 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 entailed in the process of completing the assignment.
For a more detailed look at what goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, what assurance is there that the value conclusion is accurate?   (List of questions)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • The appraisal contained a suitable analysis of the data.

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

  • That appraisal services were done in a careful and conscientious fashion.

  • The final appraisal report was easy to explain, sound and not easily discredited.
To become a state licensed appraiser, we must fulfill considerable education and experience requirements that prepare us to produce an unbiased opinion. Plus, appraisers must obey a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for working up an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (List of questions) Licensing and certification is achieved through coursework, tests and practical experience. Once licensed, he/she is required to take continuing education courses so the license remains up to date. To see the specific requirements for any state click here.

Who are an appraiser's customers?   (List of questions)

Mortgage lenders are an appraiser's most likely customer, requiring their services to ensure property involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does an appraiser get the information used to estimate values in Saint Charles County or other areas?   (List of questions)

Gathering information is one of the primary things an appraiser does. Data can be categorized as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specifics are gathered by the appraiser while on site.

General data is gathered from a many places. To research recent sales to be used as "comps", we typically use the local Multiple Listing Service. Tax records and other public documents verify 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 assembles general data from his or her past experience in doing assignments for other properties in the same market.

How can a licensed appraiser help me?   (List of questions)

An appraisal is a valuable tool anytime the value of your home is pertinent to a financial decision. When selling your home, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from Advantage Appraisal is the best way to ensure assets are divided evenly. Simply put, a house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.

My mortgage statement has an item on it for PMI? Can I get rid of that?   (List of questions)

PMI is the common abbreviation for for Private Mortgage Insurance. PMI protects the lender if a borrower defaults on the loan and the market price of the property is less than the balance of the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

Is PMI something increasing your monthly mortgage payment?Call Advantage Appraisal today at 314-565-2524 or send us an e-mail. A current appraisal could save you thousands.

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

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 amenities. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house . Trim any landscaping and move any items that would get in our way while we measure the structure. On the inside, make sure the appraiser can get to items like furnaces and water heaters.

To help expedite our work plus ensure a more accurate report, attempt if possible to have the following items:
  • Information on the latest purchase of the property in the last three years.
  • Written property agreements, such as a maintenance agreement for a shared driveway.
  • Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
  • A list of "proposed" improvements when the property is being appraised "as complete".

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."

Does the appraisal belong to the bank or the consumer?   (List of questions)

For mortgage transactions, the lender requests 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 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 situations, the appraiser may stipulate 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.

Are some home improvements more worthwhile than others?   (List of questions)

Like all things real estate, this is dependent on a home's location. 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 most value returned 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 were second, returning 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 atypical for your neighborhood in terms of size.