Frequently Asked Questions

This is where we will answer some of the most common questions asked by Lender, Realtors and Homeowners.

Q: [What is an appraisal]
A: An appraisal is simply a thought process leading to a value conclusion. An appraisal report is the conveyance to another of an appraisal. Hopefully the individual appraiser, who expresses this value conclusion, is a person licensed or qualified in the field of appraising, with the basic education, knowledge, experience and professional judgment needed to develop his/her opinion of value, through the application of certain recognized appraisal practices and procedures.

Q: [Why do I need an appraisal]
A: The most common need for a residential appraisal is for the purchase, sale, or refinance of a specific piece of real estate. Your Bank, Credit Union, Mortgage Company, or other type of Lender will typically lend as much as 75% to 100% of the appraised (market value) of the subject property. There are numerous other needs for an appraisal including; divorce, estate, foreclosure, insurance, pre-sale, tax appeals, PMI removal, and various other reasons..

Q: [How is a residential appraisal made]

A: Most appraisals follow the same valuation process.

- define the problem

- data collection & preliminary analysis

- highest and best use analysis

- land value estimate

- apply the three approaches to value

- reconcile the three approaches to value

- report the final opinion of value

Q: [How long will the appraiser take]
A: The actual inspection of the subject property is only a small part of the appraisal process. The appraiser will normally contact the owner, builder and/or Realtor prior to inspecting the subject property to obtain as much background information as possible. The appraiser typically checks the tax and assessment records prior to doing the inspection, and reviews recent sales in the neighborhood or subdivision. During the inspection process, the appraiser will normally walk through the interior of the subject property making notes on custom features and upgrades, as well as, any obvious defects or deficiencies. The appraiser will typically make an interior sketch, measure the exterior of the dwelling, and note any obvious exterior deficiencies that may adversely affect market value or marketability. The actual length of time needed for an onsite inspection can vary greatly, depending on the style, age, and condition of the property, and the experience level of the appraiser performing the inspection.

Q: [The inspection was completed last week, why haven't I heard something]
A: As stated above, the inspection of the subject is only a small part of the appraisal process. Once the appraiser completes the inspection, he/she must search the market area for "comparable" sales. If your property is unique or different from other properties in your neighborhood (Geodesic Dome, In-Ground Pool, In-Law Apartment, Waterfront, etc.), then the appraiser may have to expand his search area for a "comparable" sale. Expanding the search area takes time. Trying to find "comparable" sales that contain amenities similar to your property may take additional search time and analysis. It is also possible that your report was completed by the appraiser and sent to the Lender, and the Lender is undergoing a review process (known as Underwriting), where the Lender makes sure that the appraiser has complied with all USPAP and/or Fannie Mae guidelines. This process can take additional time if the Lender's Underwriter needs additional "comparable" sales, or a more thorough explanation of the "comparable" sales that were used in your report. If you think there is a problem, you must call your Lender, because the appraiser is not permitted (by regulation) to discuss the appraisal report with any one other than the Client.

Q: [Who determines the appraisal fee]
A: Each appraiser determines his/her own appraisal fee for each assignment. Fees are typically based on the complexity of the assignment, the time needed to complete and report the assignment in a professional manner..

Q: [What if I disagree with the appraisal]

A: If you ordered the appraisal, you can contact the appraiser directly with your concerns. However, if someone else ordered the appraisal (a bank, credit union or mortgage company), then you should contact that organization with your concerns.

Note to Homeowners; even though you may have paid for the appraisal, the appraiser has a confidential relationship with the lender (Client) and, therefore, is not permitted to discuss the appraisal with anyone (including the owner of the property) without the permission of the lender (Client).

Q: [If I paid for the appraisal, why can't I get a copy of the report]
A:

You are entitled to a copy of the report. If you hired the appraiser directly, then you should contact the appraiser for a copy of the report. However, if the appraisal went through a bank, credit union, or other mortgage lending institution, then you must contact that organization for your copy of the report. See Title 15 - Commerce and Trade

Note to Homeowners; even though you may have paid for the appraisal, the appraiser has a confidential relationship with the lender (Client) and, therefore, is not permitted to provide copies of the report or discuss the appraisal with anyone (including the owner of the property) without the permission of the lender (Client). You must contact the Lender for a copy of the report. If the Lender cannot or will not provide you a copy of the report, you may request a copy of the appraisal from the appraiser, if you obtain written permission from the Lender, and the appraiser may charge a fee for each copy.

Q: [Can I question the appraisal]
A: Yes, you can question the value, especially if you feel the appraiser failed to take certain facts or information into consideration, like recent sales in the subject neighborhood. However, simply disagreeing with the value opinion is not a sufficient reason to question the value. If the appraisal was performed by a licensed, qualified, and professional appraiser, and he or she completed the report according to certain recognized practices and procedures, then you should be prepared to provide whatever additional information you feel was not considered and would have an impact on the opinion of value, and ask the lender to have the appraiser address those issues or concerns.

Q: [Why do I need another appraisal when I just had one done 3 months or 6 months ago?]
A:

The simple answer is, values change over time. Your lender will typically consider the "old" appraisal and determine if they will or will not accept it. Lenders may have underwriting guidelines that may require a new appraisal if;

1) the "old" appraisal is more than a few months old

2) the "old" appraisal was performed by an "unlicensed" appraiser

3) the "old" appraisal was performed by an appraiser not on the lender's list of approved appraisers

Q: [I paid for the appraisal several weeks ago; why hasn't the appraiser called me?]
A:

There are generally two major reasons for this type of delay;

1) the lender has a large volume of cases, your request was misplaced, and the case was never assigned to an appraiser, or

2) the lender did assign the appraisal, the appraiser has a large volume of cases, and the appraiser has not made an attempt to contact you.

In either instance you should contact the lender immediately and insist that your case be handled in a prompt and professional manner.

In today's competitive market, it is customary for an appraiser to contact the owner within 24 - 48 hours of receiving the appraisal assignment. You can speed up the process by checking with your lender to make sure he assigned the case to an appraiser, that the lender/appraiser have the correct contact numbers for you (phone and/or pager numbers), by returning the appraiser's phone call ASAP, and by granting access to the property as expeditiously as possible. If the lender has misplaced your request or the appraiser has not tried to reach you within a reasonable period of time after he/she was assigned the case, you may want to consider taking your business elsewhere.

Q: [Why doesn't the appraiser count my basement room?]
A: An appraisal is simply a thought process leading to a value conclusion. An appraisal report is the conveyance to another of an appraisal. Hopefully the individual appraiser, who expresses this value conclusion, is a person licensed or qualified in the field of appraising, with the basic education, knowledge, experience and professional judgment needed to develop his/her opinion of value, through the application of certain recognized appraisal practices and procedures.

Q: [Why can't I transfer or reassign the appraisal report to a different lender?]
A:

SUBJECT: Readdressing (Transferring) a Report to Another Party

APPLICATION: Real Property, Personal Property, and Intangible Property

THE ISSUE:

After an assignment has been completed and the report has been delivered, an appraiser may be asked to "readdress" (transfer) the report to another party. Does USPAP allow an appraiser to "readdress" (transfer) a report by altering it to indicate a new recipient as the client or additional intended user when the original report was completed for another party?

No. Once a report has been prepared for a named client(s) and any other identified intended users and for an identified intended use, the appraiser cannot "readdress" (transfer) the report to another party.

What is the solution? The original appraiser may accept a New appraisal assignment from the new Client as long as he/she does not divulge or disclose any privileged information from the first report. This may require a new inspection of the subject property and a new value (if market value has changed), even if the appraiser just inspected the property a week or a month ago. This new assignment will provide a new "effective" date, new analysis of the neighborhood and market area, new comparable sales (if available), and possibly a new value (if values have changed).

Q: [Can I update the appraisal?]
A:

Can I get an Update of an appraisal completed (1) week or (1) month ago? The answer is, Yes! However, you must be the original Client (the Lender who ordered the original report), and the Update is considered a new assignment if you want a "current" market value. That is, if you want to know the value of the property today.

Many Lenders ask for a "Recertification of Value", and ask the appraiser to simply state that the property "has not declined in value" since the date of the original appraisal. This is NOT a Recertification of Value, this is an Update appraisal. And this "Update" must be ordered by the original client. A New Client (different Lender) cannot order an "Update" or Recertification, it violates USPAP. If a new Lender gets a copy of the original report, and asks for an "Update or Recertification, this is (in reality) a request for a new assignment. See comment above.

Q: [Who owns the appraisal?]
A: The Client owns the appraisal. The Client is the person or company identified in the appraisal report as the Client. The Client is usually identified at the time the appraisal is ordered, along with the scope of the assignment, the intended use, and the purpose of the appraisal assignment. The Client cannot be changed, once the appraisal report has been delivered to the Client.

Q: [Can I get a "Free" comp search?]
A: A licensed appraiser cannot do "comp checks or comp searches" and promise that the "appraised value" will fall within the range of values found by the "comp check or comp search" This request is considered an ethical violation by the person making the request and the appraiser (if he/she promises a value).An appraisal is simply a thought process leading to a value conclusion.

Q: [Why can't the appraiser do a comp search before I order the appraisal?]
A:

you really want the appraiser to do is promise a value before he/she even sees the property. This is a clear violation of ethics and would jeopardize the appraiser's license.

Solution; You can go to any number of "Free" services that offer free estimates of value over the internet. (1) www.zillow.com; (2) www.homesdatabase.com

Q: [Can I get a "Free" comp search?]
A: An appraisal is simply a thought process leading to a value conclusion. An appraisal report is the conveyance to another of an appraisal. Hopefully the individual appraiser, who expresses this value conclusion, is a person licensed or qualified in the field of appraising, with the basic education, knowledge, experience and professional judgment needed to develop his/her opinion of value, through the application of certain recognized appraisal practices and procedures.

Q: [What can I do to speed up the appraisal report?]
A: An appraisal is simply a thought process leading to a value conclusion. An appraisal report is the conveyance to another of an appraisal. Hopefully the individual appraiser, who expresses this value conclusion, is a person licensed or qualified in the field of appraising, with the basic education, knowledge, experience and professional judgment needed to develop his/her opinion of value, through the application of certain recognized appraisal practices and procedures.

Q: [Why does the appraiser need a copy of the contract?]
A: An appraisal is simply a thought process leading to a value conclusion. An appraisal report is the conveyance to another of an appraisal. Hopefully the individual appraiser, who expresses this value conclusion, is a person licensed or qualified in the field of appraising, with the basic education, knowledge, experience and professional judgment needed to develop his/her opinion of value, through the application of certain recognized appraisal practices and procedures.

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