Appraisal Specialists of Iowa, LLC has answers to "Frequently Asked Questions"

Appraisal Specialists of Iowa, LLC is always willing to answer any concerns you might have about appraisals in Urbandale and Polk County. Feel free to contact us today.

What is an appraisal?
What does an appraiser do?
What would cause me to request a real estate appraisal?
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 has been delivered, what guarantee is there that the final number is valid?
How difficult is it to become certified?
Who employs appraisers?
Where does Appraisal Specialists of Iowa, LLC get the information used to estimate values in Polk County or other areas?
What can a full appraisal do for me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Do you need anything from the homeowner in advance?
What is "Market Value?"
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?



What is an appraisal?   (Back to top)

The procedure of performing an appraisal deals with an estimation which leads to an opinion of value. There are three "common approaches to value" which helps the appraiser arrive at this opinion or estimate. One of the processes is the Cost Approach - which is what it would cost to replace the improvements, less physical deterioration and other factors, then adding the land value. The Sales Comparison Approach deals with finding similar homes in the vicinity and discerning value based on comparing those prior sales to the property being appraised. The Sales Comparison Approach is commonly the most definitive and clearest indicator of value for a residential property. The Income Approach is primarily used for figuring out 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 offers a professional, unbiased determination of market value, to be used in making real estate transactions. Appraisers reveal the details of their professional investigation in appraisal reports.


What would cause me to request a real estate appraisal?   (Back to top)

There are many reasons to get an appraisal from Appraisal Specialists of Iowa, LLC with the most common reason being real estate and mortgage transactions. Other reasons for ordering an appraisal report include:
  • If you are applying for a loan.
  • If you would like to lower your property tax obligations.
  • To build a case for a homeowner's equity and remove PMI.
  • To contest high property taxes.
  • To handle an estate.
  • To give you a negotiating tool when purchasing a home.
  • To find a reasonable property value when putting your home on the market.
  • 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 require an appraisal on every house.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will help.
Click here for a more detailed explanation of the process of getting an appraisal.


What is the difference between an appraisal and a home inspection?   (Back to top)

Appraisers do not do perform home inspections and are not home inspectors. A third-party home inspector will evaluate the structure of the property, from the top to the bottom. Generally, a home inspection report will evaluate the amenities and the necessities of the house: air conditioning (weather permitting), electrical systems, 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 other visible structures.

My agent performed a CMA for me. Is that the same as an appraisal?   (Back to top)

Honestly, they have nothing in common. The CMA uses market trends to conduct most of their business. An appraisal utilizes comparable sales that can be validated by public record. The appraisal report will also contain neighborhood and construction costs. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

The credentials of the person behind the report is actually 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, create CMA's. A certified, Iowa licensed professional who bases their livelihood on valuing properties in and around Polk County creates the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a previously agreed upon sum for work they perform, regardless of their value conclusion.

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

Every report must reflect a credible value opinion and should document the following:
  • The client 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 appraisal.(Sometimes this is in the past or maybe the future for new construction!)
  • Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic factors, the property rights valued, 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.
  • The scope of work considered while working up the job.
For a more comprehensive view of the work that goes into an appraisal report click here: Sample Appraisal Report

Once the report has been delivered, what guarantee is there that the final number is valid?   (Back to top)

In the documentation of an appraisal, 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 critical errors contained in the report, nor any material details left out.

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

  • That a believable, defensible appraisal report was conferred.
To become a state licensed appraiser, there are intense education requirements as well as on the jobexperience that must be attained. Plus, appraisers must obey a strict industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for developing an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Back to top) Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. In general, licensing and certification is most often associated with many hours of coursework, tests and experience working under a supervisor. Once an appraiser is licensed, he/she is required to engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers?   (Back to top)

Commonly, appraisers are called upon by lenders to estimate the value of a home involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does Appraisal Specialists of Iowa, LLC get the information used to estimate values in Polk County or other areas?   (Back to top)

Compiling information is one of the primary functions of an appraiser. Data can be split into Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.

General data is received from a numerous places. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. To verify actual sales prices, we research tax records and other public documents that are usually online nowadays. Appraisers routinely need to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And last but not least, the appraiser assimilates general data from his or her past experience in doing assignments for other houses in the same market.

What can a full appraisal do for me?   (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 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. For parties settling an estate or divorce, an appraisal from Appraisal Specialists of Iowa, LLC is the best documentation to ensure assets are split up evenly. Simply put, a home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making informed financial decisions.

My mortgage statement has an item on it for PMI? Can I get rid of that?   (Back to top)

PMI is the common abbreviation for for Private Mortgage Insurance. This supplemental policy covers the lender in the event a borrower is unable to pay on the loan and the market price of the property is lower 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.

Is PMI a lineitem in your monthly house payment?Call Appraisal Specialists of Iowa, LLC today at 5153719413 or send us an e-mail. Documentation of your home's present value could save you thousands.

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

The first step in most appraisals is the home inspection. During this process, we 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. Inside, pick up any clutter and make sure 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, attempt if possible to have the following items:
  • A plot plan or survey of the house and land (if available).
  • Information on any written private agreements, such as a shared driveway with a neighbor.
  • Title policy that describes encroachments or easements.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

What is "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 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.

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

How can I get the most ROI out of home improvements?   (Back to top)

It really depends on the market. For example, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!

No matter where you go, however, renovating a kitchen is almost always a safe investment. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms are right up there with kitchens, yielding 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.