Sweeney Appraisals has answers to "Frequently Asked Questions"

Sweeney Appraisals is always more than happy to handle any questions you might have about appraisals in Washington and Mason County. Don't hesitate to contact us today.

Describe an appraisal
What does an appraiser do?
What are the reasons I would need a real estate appraisal?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Upon completion of the appraisal, what assurance is there that the final number is valid?
What does it mean for an appraiser to be licensed?
Who do appraisers work for?
Where does Sweeney Appraisals get the data used to estimate values in Mason 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?
How do I get ready for the appraiser?
Define "Market Value"
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?



Describe an appraisal   (Back to top)

The appraisal process is an evaluation that generates an opinion of value. This opinion or estimate is arrived at by using a formal method that usually uses the three main "common approaches to value". The Cost Approach is one of the approaches that appraisers use to find the value of a house; it involves concluding what the improvements would cost without physical depreciation, adding the land value. Easily the most common approach in figuring the likely sales price of a home is the Sales Comparison Approach which concerns making a comparison to comparable properties close by. The Sales Comparison Approach is normally the most accurate and best indicator of value for a house. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it deals with estimating what an investor would pay based on the capital generated by the property.

What does an appraiser do?   (Back to top)

An appraiser provides an unbiased and well supported opinion of market value, often in the context of a real estate purchase. Appraisers present their expert investigation in appraisal reports.


What are the reasons I would need a real estate appraisal?   (Back to top)

There are many reasons to purchase an appraisal from Sweeney Appraisals with the usual reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal report include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax burden.
  • To demonstrate a homeowner's acquired equity and remove PMI.
  • To challenge inflated property taxes.
  • If you need to take care of an estate.
  • To give you a negotiating tool when purchasing a home.
  • To find the most probable price when selling your home.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because an official agency such as the IRS requires it.
  • If you ever find yourself in a lawsuit.
For a more detailed explanation of the appraisal process click here.


How is an appraiser different than a home inspector?   (Back to top)

Home inspectors do not produce an opinion of value and do not use the same forms as appraisers. A third-party home inspector will judge the structure of the house, from the top to the foundation. 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)?   (Back to top)

To be honest, they share nothing in common. The CMA utilizes market trends to conduct most of their business. An appraisal utilizes comparable sales that can be verified by public record. Also, the appraisal checks other factors like condition, location and replacement prices. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

The person behind the report is actually the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, create CMA's. A certified, state licensed professional who has formed a career on valuing homes in and around Mason County creates the appraisal. Moreover, the appraiser is an independent voice, with no vested interest in the value conclusion, unlike the agent, who gets a commission based upon the price of the home.

What are the contents of an appraisal report?   (Back to top)

The main point of an appraisal document is to give a value opinion, and depending on the scope of the report, one will customarily see the following:
  • The client and other intended users.
  • How the appraisal is supposed to be used.
  • The appraisal's purpose.
  • The type of value reported and a definition of the value reported.
  • The effective date of the value opinion.(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 real property interest in question, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible considerations.
  • 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 process of completing the assignment.
For a more detailed look at what goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, what assurance 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 utilized in the appraisal was suitable.

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

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

  • The final appraisal report was understandable, legitimate and not easily discredited.
To become a state licensed appraiser, we must meet considerable education and experience requirements that prepare us to formulate an unbiased opinion. Likewise, appraisers must abide by a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for carrying out an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Back to top) Licensing and certification takes coursework, tests and experience working under a supervisor. Once an appraiser is licensed, he or she is required to complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who do appraisers work for?   (Back to top)

Mortgage lenders are an appraiser's typical client, needing their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Sweeney Appraisals get the data used to estimate values in Mason County or other areas?   (Back to top)

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

General data is gathered from a numerous sources. Local Multiple Listing Services (MLS) provide information on recently sold homes that might be used as comparables. To verify actual sales prices, we use tax records and other public documents that are usually online nowadays. Flood zone data is gathered from FEMA data outlets, 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 properties in the same market.

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

If you're involved in any kind of financial decision and the value of your home is relevant, you'll want an appraisal. When selling your house, an appraisal helps you set a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Sweeney Appraisals is the best way to ensure assets are split up fairly. 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?   (Back to top)

PMI stands for Private Mortgage Insurance. PMI takes care of the lender in the event a borrower is unable to pay on the loan and the value of the property is less than what is owed on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

The amount you keep from cancelling the PMI required when you got your mortgage pays for the appraisal in a matter of months. Sweeney Appraisals is in the business of tracking value trends in Washington and Mason County. Contact us today.

How do I get ready for the appraiser?   (Back to top)

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 status of its features. Inside, make sure it is clutter free and that we can find our way 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.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
  • Any information on the purchase of the property for the last three years.
  • A list of any personal property that will be left behind and sold with the home, such as an oven, or a washer and dryer, if applicable.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
  • Locate copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.
  • A list of "proposed" improvements when the property is being appraised "as complete".

Define "Market Value"   (Back 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."

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 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.

The exception to this rule is when a home owner hires an appraiser directly. In these situations, the appraiser may state the purpose of the appraisal; 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.

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

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. 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 are right up there with kitchens, returning 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.