M Davies Appraisal LLC has answers to "Frequently Asked Questions"


	M Davies Appraisal LLC is willing to talk to you about any inquiries you might have about appraisals or real estate in Fairfield County. Contact M Davies Appraisal LLC today to see how we can help solve your specific valuation problems.

What is an appraisal?
Describe what an appraiser does
What are the reasons a person would require services from M Davies Appraisal LLC?
Is an appraisal the same as a home inspection?
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 legitimate?
What goes into an appraiser's certification?
Who engages the services of appraisers?
Where does M Davies Appraisal LLC get the information used to estimate values in Fairfield County or other areas?
Why should I hire a licensed appraiser?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal appointment
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?

What is an appraisal? (Top)

The procedure of writing an appraisal report consists of an inspection which forms an opinion of value. This opinion or estimate is concluded using a formal process that usually utilizes the three main "common approaches to value". One of the methods in use is the Cost Approach, which finds what it would cost to replace the improvements to the house, less the age and physical deterioration, adding the land value. Another of the processes is the Sales Comparison Approach - which concerns making a comparison to other similar properties within a close vicinity which have recently sold. The Sales Comparison Approach is commonly the most definitive and clearest indicator of a liklely sales price for a house. 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 capital generated by the property.

Describe what an appraiser does (Top)

An appraiser generates a professional, unbiased opinion of market value, to be used in making real estate transactions. Appraisers show their expert findings in appraisal reports.

What are the reasons a person would require services from M Davies Appraisal LLC? (Top)

There are many reasons to obtain an appraisal from M Davies Appraisal LLC with the usual reason being real estate and mortgage transactions. A few other reasons for ordering an report include:

If you are applying for a loan.
If you would like to lower your property tax burden.
To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
To fight improperly assessed property taxes.
To deal with an estate.
To give you a leg-up when purchasing a home.
To determine a reasonable price when listing your home.
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 need an appraisal on every property.
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 dealing with getting an appraisal.

Is an appraisal the same as a home inspection? (Top)

Appraisers do not do complete home inspections and are not home inspectors. An inspection is a third-party investigation of the accessible structure and appliances of a house, from the top to the bottom. The archetypal home inspector's report will contain an evaluation of the integrity of the property's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

Is an appraisal the same as a comparative market analysis(CMA)? (Top)

Simply, they have nothing in common. The CMA depends on vague local market trends. The appraisal depends on specific valid comparable sales. Also, the appraisal verifies other factors like condition, location and building costs. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the biggest difference is the person doing the report. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Moreover, the appraiser is an independent voice, with no conditional interest in the property's value, unlike the agent, whose income is tied to the price of the home.

What does the appraisal report contain? (Top)

The main purpose 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.
The intended use of the appraisal.
The purpose of the assignment.
The type of value reported and a definition of that value.
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 description, 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 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 comprehensive look at the work that goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, what assurance is there that the value conclusion is legitimate? (Top)

In communicating an appraisal report, each appraiser must ensure the following:

The appraisal contained an apropos analysis of the information.

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

That appraisal services were delivered in a careful and cognizant fashion.

The final appraisal report was transparent, legitimate and defensible.

There are rigorous classroom and experience requirements that must be met in order to become a licensed appraiser in Connecticut. Plus, appraisers must follow a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for developing an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Top) Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. However, licensing and certification typically translates to many hours of coursework, tests and real world experience. Once licensed, he/she must then take continuing education courses so the license remains up to date. To see the specific requirements for any state click here.

Who engages the services of appraisers? (Top)

Commonly, appraisers are hired by lenders to render a value opinion on a house involved in a loan transaction - to make sure the real estate is indeed adequate collateral for the loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does M Davies Appraisal LLC get the information used to estimate values in Fairfield County or other areas? (Top)

One of the primary things an appraiser does is to compile data. Data can be categorized as either Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specific data 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 might be used as comparables. To double-check actual sales prices, we research tax records and other public documents that are usually online nowadays. 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 product.

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

Why should I hire a licensed appraiser? (Top)

An appraisal is a valuable tool whenever the value of your home is pertinent to some financial decision. For those selling a home, you'll want to figure out 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 commissioning an independent appraisal. For those settling an estate or divorce, an appraisal from M Davies Appraisal LLC is the best documentation to ensure assets are divided evenly. Simply put, a house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

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

PMI is an acronym for Private Mortgage Insurance. This supplementary policy takes care of the lender in case a borrower doesn't pay on the loan and the value of the home is less than the loan balance. 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 amount you keep from cancelling your PMI pays for the appraisal in a matter of months. M Davies Appraisal LLC is a name you can trust when it comes to value trends in Monroe and Fairfield County. Contact us today.

Should I do anything in advance of the appraisal appointment (Top)

The first step in most appraisals is the property inspection. 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. Inside, make sure it is clutter free and that we can access things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of exterior walls.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:

Any records on the purchase of the property for the last three years.
Information on any written private agreements, such as a shared driveway with a neighbor.
Title policy that describes encroachments or easements.
A list of any major home improvements and enhancements, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
A list of "suggested" improvements if the property is to be appraised "as complete".

What is "Market Value?" (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? (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 appraisal - 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.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these cases, the appraiser may stipulate how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can do whatever they want with the appraisal.

Are some home improvements more worthwhile than others? (Top)

It really depends on the market. 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. 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, yielding 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.