True Value Appraisal, Inc has answers to "Frequently Asked Questions"

True Value Appraisal, Inc is eager to elaborate on any questions you might have about appraisals or real estate in Saint Louis and Saint Louis City County. Contact us today to see how we can help solve your specific valuation problems.

What is an appraisal?
What does an appraiser do?
Why would someone need a real estate appraisal?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What can I expect to see in my appraisal report?
Once the appraisal is done, how can I have assurance that the value indicated is veritable?
How difficult is it to become certified?
Who do appraisers work for?
Where does True Value Appraisal, Inc get the data used to estimate values in Saint Louis City County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
What does "Market Value" mean?
Who actually owns the appraisal report?
How can I get the most ROI out of home improvements?



What is an appraisal?   (Go to list of  questions)

The procedure of writing an appraisal deals with an inspection which leads to an opinion of value. This opinion or estimate is concluded by using a formal method that commonly utilizes three "common approaches to value". One of the methods in use is the Cost Approach, which evaluates 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 involves discovering a comparable analysis to other similar properties within a close proximity which have recently sold. Being the most popular approach, the Sales Comparison Approach is generally the most accurate and best indicator of market value for a property. The Income Approach is mainly used for finding the market value of income-producing properties based on what an investor would pay based on the amount of income a property produce.

What does an appraiser do?   (Go to list of  questions)

An appraiser generates an unprejudiced and well supported opinion of market value, often in the context of a real estate purchase. Appraisers reveal the details of their expert investigation in appraisal reports.


Why would someone need a real estate appraisal?   (Go to list of  questions)

There are many reasons to purchase an appraisal from True Value Appraisal, Inc with the usual reason being real estate and mortgage transactions. Some other reasons for getting an appraisal report include:
  • If you are applying for a loan.
  • If you would like to lower your property tax burden.
  • To build a case for a homeowner's equity and remove insurance.
  • To fight improperly assessed property taxes.
  • To settle an estate.
  • To provide you a leg-up when purchasing a home.
  • To determine a likely 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 an official agency such as the IRS requires it.
  • If you are ever involved in a civil case.
Click here for a more extensive explanation of the process of getting an appraisal.


How is an appraiser different than a home inspector?   (Go to list of  questions)

Home inspectors do not provide an opinion of value and are not appraisers. An inspection is a third-party investigation of the available structure and appliances of a house, from the roof to the foundation. The usual 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 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?   (Go to list of  questions)

Simply put, it's like comparing Shakespeare to reality TV. What the CMA relies upon are superficial trends. The appraisal is based on similar proven comparable sales. Area and construction prices are also a priority in an appraisal. All a CMA does is generate a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the largest differentiator is the person doing the report. Real estate agents produce CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, state licensed professional who bases a career on valuing real estate in and around Saint Louis City 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 accept a previously agreed upon fee for work they perform, regardless of their value conclusion.

What can I expect to see in my appraisal report?   (Go to list of  questions)

The main objective of an appraisal report is to give a value opinion, and depending on the scope of the report, you'll usually see the following:
  • The client and other intended users.
  • The intended use of the report.
  • The purpose of the appraisal.
  • The type of value contained and a definition of that value.
  • The effective date of the value opinion.
  • Pertinent property characteristics, including: location, physical description, legal attributes, economic factors, the property rights in question, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible factors.
  • 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 included in the activity of completing the assignment.
For a more comprehensive view of all that goes into an appraisal report click here: Sample Appraisal Report


Once the appraisal is done, how can I have assurance that the value indicated is veritable?   (Go to list of  questions)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
  • The appraisal contained a suitable analysis of the information.

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

  • That appraisal services were provided in a careful and judicious manner.

  • That a solid, defensible appraisal report was communicated.
There are intense classroom and real world experience requirements that must be fulfilled in order to achieve the title of "licensed appraiser" in Missouri. Likewise, appraisers must obey a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for developing an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Go to list of  questions) Regulations regarding licensing and certification are different from state to state. In general, licensing and certification is most often associated with many hours of coursework, tests and practical experience. Once licensed, he or she is required to engage in continuing education courses so the license remains current. To see the specific requirements for any state click here.

Who do appraisers work for?   (Go to list of  questions)

Commonly, appraisers are employed by lenders to render a value opinion on a house involved in a loan transaction - to make sure the house is indeed adequate collateral for the loan. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does True Value Appraisal, Inc get the data used to estimate values in Saint Louis City County or other areas?   (Go to list of  questions)

One of the main tasks an appraiser must accomplish is to compile property data. Data can be described as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is gathered from a many places. To research recently sold homes to be used as "comps", an appraiser will often go to the local Multiple Listing Service. To double-check actual sales prices, we research items in the assessor's office and other public documents. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood servers.

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


Why should I hire a licensed appraiser?   (Go to list of  questions)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. For those selling a home, you'll want to figure out the price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. When buying, be sure you're not overpaying by commissioning an independent appraisal. 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. Don't make decisions in the dark with a professional appraisal.


What exactly is PMI and how can I get rid of it?   (Go to list of  questions)

PMI is the common abbreviation for for Private Mortgage Insurance. This supplemental plan takes care of the lender if a borrower doesn't pay on the loan and the market price of the property is lower than what the borrower still owes 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 getting rid of the PMI required when you got your mortgage pays for the appraisal in no time. Nobody is more qualified than True Value Appraisal, Inc when it comes to analyzing real estate appreciation in Saint Louis and Saint Louis City County. Contact us today.

Should I do anything in advance of the appraisal inspection   (Go to list of  questions)

We begin with an inspection of the property. 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 condition of its amenities. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and move any items that would make it difficult to measure the structure. On the inside, make sure the appraiser can easily access items like furnaces and water heaters.

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.
  • List of personal property to be sold with the home.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
  • Find copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.

What does "Market Value" mean?   (Go to list of  questions)

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."



Who actually owns the appraisal report?   (Go to list of  questions)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is entitled to a copy of the appraisal - 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.

The exception to this rule is when a home owner hires an appraiser directly. In these situations, the appraiser may define 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.


How can I get the most ROI out of home improvements?   (Go to list of  questions)

This really depends on where the home is. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

No matter where you go, however, renovating a kitchen is almost always a safe move. 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%. Adding bedrooms and baths can also increase the value of your home (when done well) as long as your home doesn't then become overbuilt for your neighborhood in terms of size.