Elite Appraisals (215) 431-6123 has answers to "Frequently Asked Questions"

Elite Appraisals (215) 431-6123 is always more than happy to address any concerns you might have about appraisals or real estate in Sellersville and Philadelphia County. Feel free to contact us today.

What is an appraisal?
What does an appraiser do?
What are the reasons someone would require services from Elite Appraisals (215) 431-6123?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What does the appraisal report contain?
Once the report has been completed, how can I have assurance that the final number is trustworthy?
What are the requirements to be a certified appraiser?
Who engages the services of appraisers?
Where does Elite Appraisals (215) 431-6123 get the information used to estimate values in Philadelphia County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
Define "Market Value"
Who has rights to the appraisal report?
I want to get more for my house. Where should I spend money renovating?



What is an appraisal?   (Top)

The process of writing an appraisal report consists of an inspection which leads to an opinion of value. There are three "common approaches to value" which helps the real estate appraiser conclude this opinion or valuation. One of the methods in use is the Cost Approach, which is what it would cost to restore the improvements to the house, minus age and physical dilapidation, adding the land value. The Sales Comparison Approach involves searching for comparable homes in the vicinity and figuring out the value based on comparing those prior sales to the house being investigated. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a residential property. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it deals with estimating what an investor would pay based on the income produced by the property.

What does an appraiser do?   (Top)

An appraiser produces a professional, unbiased opinion of market value, in the support of real estate transactions. Appraisers present their investigation in appraisal reports.


What are the reasons someone would require services from Elite Appraisals (215) 431-6123?   (Top)

There are a lot of reasons to obtain an appraisal from Elite Appraisals (215) 431-6123 with the usual reason being real estate and mortgage transactions. Some other reasons for getting an report include:
  • To get a loan.
  • If you would like to reduce your property tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove Primary Mortgage Insurance.
  • To contest inflated property taxes.
  • If you need to take care of an estate.
  • To give you a leg-up when purchasing a home.
  • To figure out a reasonable 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.
  • Because an official agency such as the IRS requires it.
  • If you are ever involved in a lawsuit.
If you need more information regarding the appraisal process, please click here.


How is an appraiser different than a home inspector?   (Top)

Home inspectors do not come to an opinion of value and are not appraisers. The point of a home inspection is to evaluate the structure of the house from bottom to top. The usual home inspector's report will include an evaluation of the integrity of the home's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible 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?   (Top)

To be blunt, it's night and day. The CMA relies on vague trends in the market. Appraisals use comparable sales which are valid resources. The appraisal report will also contain location and construction prices. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the biggest difference is who's creating the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. A certified, Pennsylvania licensed professional who made their livelihood on valuing properties in and around Philadelphia County is behind 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 flat sum for work they perform, regardless of their value conclusion.

What does the appraisal report contain?   (Top)

The main point of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:
  • Who engaged the appraiser and other intended users.
  • How the appraisal is supposed to be used.
  • The purpose of the assignment.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraiser's opinions and conclusions.(Sometimes this is in the past or maybe the future for new construction!)
  • Relevant property attributes, including: location, physical characteristics, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible items.
  • All 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 entailed in the activity of completing the job.
For a more in depth view of all that goes into an appraisal report click here: Sample Appraisal Report

Once the report has been completed, how can I have assurance that the final number is trustworthy?   (Top)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • The appraisal used an apropos analysis of the information.

  • That crucial errors of omission or commission were not committed individually or collectively.

  • That appraisal services were done in a careful and cognizant manner.

  • The final appraisal report was understandable, credible and not easily discredited.
To become a state licensed appraiser, we must fulfill extensive education and experience requirements that enable us to produce an unbiased opinion. In addition, appraisers must abide by a strict industry code of ethics and respect national standards of practice for real estate appraisal. The rules for carrying out an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Top) Regulations regarding licensing and certification vary from state to state. However, licensing and certification typically translates to many hours of classroom study, tests and practical experience. Once licensed, he or 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 engages the services of appraisers?   (Top)

Most of the time, appraisers are employed by mortgage lenders to estimate the value of real estate involved in a loan transaction - to make sure the real estate is truly adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Elite Appraisals (215) 431-6123 get the information used to estimate values in Philadelphia County or other areas?   (Top)

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

General data is gathered from a variety of places. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers often need to report when a property lies in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And most importantly, the appraiser gathers general data from his or her past experience in creating appraisals for other houses in the same market.

Why should I hire a licensed appraiser?   (Top)

If you're involved in any kind of financial decision and the value of your home is relevant, you'll want a full appraisal. 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, be sure you're not overpaying by commissioning an independent appraisal. For those settling an estate or divorce, an appraisal from Elite Appraisals (215) 431-6123 is the best way to ensure assets are split up evenly. A home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making the right financial decisions.

What exactly is PMI and how can I get rid of it?   (Top)

PMI is the common abbreviation for for Private Mortgage Insurance. This additional policy covers the lender if a borrower defaults on the loan and the value of the home is lower than the balance of 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 savings from getting rid of your PMI will make up for the price of the appraisal in a matter of months. Elite Appraisals (215) 431-6123 is in the business of tracking value trends in Sellersville and Philadelphia County. Contact us today.

How do I get ready for the appraiser?   (Top)

The first step in most appraisals is the property 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. On the home's interior, pick up any clutter and make sure we can access things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of outside walls.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
  • A plot plan or survey of the house and land (if available).
  • Written property agreements, such as a maintenance easement for a shared driveway.
  • Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
  • A list of any major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
  • Information on "Homeowners Associations" or condominium covenants and fees.

Define "Market Value"   (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?   (Top)

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 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.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these situations, the appraiser may stipulate the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can use the appraisal for any purpose.

I want to get more for my house. Where should I spend money renovating?   (Top)

Like all things real estate, this is dependent on a home's location. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

As a rule, the most value returned from renovating a home comes in the kitchen. 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 weren't far behind, yielding 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.