profile picture

Judi King Appraisals has answers to "Frequently Asked Questions"

Judi King Appraisals is willing to answer any concerns you might have about appraisals or real estate in San Diego and San Diego County. Contact us today to see how we can help solve your valuation problems.

Define the term "Appraisal"
What does an appraiser do?
What are the reasons a person would request services from Judi King Appraisals?
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 can I expect to see in my appraisal report?
Upon completion of the report, what assurance is there that the final number is accurate?
How are appraisers certified?
Who hires an appraiser?
Where does Judi King Appraisals get the information used to estimate values in San Diego County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Does the appraiser need anything from me in advance?
How does an 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"   (Return to top)

The procedure of writing an appraisal deals with an inspection which leads to an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or valuation. One of the processes in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the home, less the age and physical deterioration, adding the land value. Another of the processes is the Sales Comparison Approach - which deals with making a comparable analysis to other similar properties within a close proximity which have recently sold. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a home. One of the least common approaches in appraising residential properties is the Income Approach, which is mainly used to determine the market value of a property based on what an investor would pay based on the capital produced by the property.

What does an appraiser do?   (Return to top)

An appraiser forumlates a fair and credible determination of market value, to be used in making real estate transactions. Appraisers illustate their findings in appraisal reports.

What are the reasons a person would request services from Judi King Appraisals?   (Return to top)

There are a lot of reasons to order an appraisal from Judi King Appraisals with the usual reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal include:
  • To get a loan.
  • If you would like to reduce your property tax obligations.
  • To build a case for a homeowner's equity and remove PMI.
  • To fight high property taxes.
  • To settle an estate.
  • To give you an edge when purchasing a home.
  • To find the most probable 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.
  • Because a government agency such as the IRS requires it.
  • If you are ever involved in a lawsuit.
If you need more information about the appraisal process, please click here.

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

The appraiser is not a home inspector and he or she does not do a complete home inspection. An inspection is a third-party investigation of the accessible structure and appliances of a home, from the top to the bottom. The standard house inspector's report will include an evaluation of the condition 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?   (Return to top)

Simply, they have nothing in common. The CMA relies on indistinct trends in the market. The appraisal depends on similar proven comparable sales. Also, the appraisal looks at other factors like condition, area and building prices. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented 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, write CMA's. A certified, California licensed professional who made their livelihood on valuing real estate in and around San Diego County is behind the appraisal. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat fee for assignments, regardless of their value conclusion.

What can I expect to see in my appraisal report?   (Return to top)

Each report must reflect a credible value opinion and should clearly state the following:
  • The client and whose purposes the appraisal is to serve.
  • The intended use of the appraisal.
  • The purpose of the appraisal.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the value opinion.
  • Pertinent property attributes, including: location, physical description, legal attributes, economic factors, the property rights valued, and non-real estate items included in the valuation, such as personal property, permanent equipment installations 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.
  • What was involved in the activity of completing the assignment.
For a more comprehensive look at what goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the report, what assurance is there that the final number is accurate?   (Return to top)

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

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

  • That appraisal services were not rendered in a careless or negligent fashion.

  • The final appraisal report was understandable, sound and conclusive.
There are rigorous classroom and experience requirements that must be adhered to in order to achieve the designation of "licensed appraiser" in California. Plus, appraisers must obey a stringent 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).

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

Who hires an appraiser?   (Return to top)

Typically, appraisers are hired by lenders to render a value opinion on a house involved in a loan transaction. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Judi King Appraisals get the information used to estimate values in San Diego County or other areas?   (Return to top)

One of the main things an appraiser does is to compile property data. Data can be split into Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.

General data is collected from a many sources. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers routinely have 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 last but not least, the appraiser assembles general data from his or her past experience in creating appraisals for other houses in the same market.

What can a full appraisal do for me?   (Return to top)

If you're making any kind of financial decision and the value of your home matters, you'll want a full appraisal. When selling your house, an appraisal will help you determine a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A home is often the single, largest financial asset anybody owns. Knowing its true value means you can make informed financial decisions.

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

PMI is short for for Private Mortgage Insurance. This additional policy covers the lender if a borrower doesn't pay on the loan and the market price of the home is less than what is owed on the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.

The money you keep from dropping your PMI pays for the appraisal in a matter of months. Nobody is more qualified than Judi King Appraisals when it comes to analyzing real estate appreciation in San Diego and San Diego County. Contact us today.

Does the appraiser need anything from me in advance?   (Return to top)

We begin with an inspection of the home. During this process, the appraiser 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. The best thing you can do to help is make sure we have easy access to the exterior of the house . Trim any landscaping and move any items that would make it difficult to measure the structure. Indoors, make sure the appraiser can get to appliances like furnaces and water heaters.

To help speed things along plus ensure a more accurate report, try if possible to have the following items:
  • Records on the latest purchase of the property in the last three years.
  • Information on any written private agreements, such as a shared driveway with a neighbor.
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.
  • Any 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".

How does an appraiser define "Market Value"?   (Return to top)

In real estate appraising, Market Value (as opposed to Fair 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?   (Return 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 included 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 engaging the appraiser for things outside securing a mortgage. 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 use the appraisal for any purpose.

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

A home's location - what city it is in and even what part of that city - is key to this popular question. 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 best ROI 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 are right up there with kitchens, returning 85%. On the contrary, work that may not add value would be painting just for the sake of redecorating.