R Cohen Appraisal has answers to "Frequently Asked Questions"

R Cohen Appraisal is ready to elaborate on any concerns you might have about appraisals or real estate in Kentfield and Marin County. Feel free to contact us today.

Define the term "Appraisal"
What does an appraiser do?
Why would I request your services?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
Once the assignment has been completed, how can I have certainty that the value conclusion is valid?
What does it mean for an appraiser to be licensed?
Who hires R Cohen Appraisal
Where does an appraiser get the data used to estimate values in Marin County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal appointment
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
Which home renovations add the most to the price?



Define the term "Appraisal"   (Go to list of  questions)

The procedure of performing an appraisal report deals with an inspection which forms an opinion of value. This opinion or estimate is found by a formal method that typically uses the three main "common approaches to value". One of the three is the Cost Approach - which is how much it would cost to replace the improvements, less physical deterioration and other factors, then adding the land value. The most common approach in figuring the likely sales price of a house is the Sales Comparison Approach which concerns concluding a comparison to similar homes close by. Usually, the Sales Comparison Approach is the most definite indicator of market value of a residential property. The Income Approach is generally used for finding the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.

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

An appraiser offers an objective and well supported determination of market value, to be used in making real estate transactions. Appraisers illustate their findings in appraisal reports.


Why would I request your services?   (Go to list of  questions)

There are a lot of reasons to order an appraisal with the most common reason being real estate and mortgage transactions. Some other reasons for ordering an appraisal report include:
  • To receive a loan.
  • To lower your tax burden.
  • To build a case for a homeowner's equity and remove insurance.
  • To fight high property taxes.
  • To deal with an estate.
  • To give you a leg-up when purchasing real estate.
  • To find a likely sales price when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS need an appraisal on every house.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will help.
Click here for a more extensive explanation of the process of getting an appraisal.


How is an appraisal different than a home inspection?   (Go to list of  questions)

Appraisers do not do complete house inspections and are not home inspectors. A third-party home inspector will investigate the structure of the 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 system, 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.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (Go to list of  questions)

Frankly, it's like comparing opera to country. What the CMA depends on are vague trends. The appraisal relies on specific verifiable comparable sales. Also, the appraisal looks at other factors like condition, neighborhood and construction costs. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the most significant factor is who's behind the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Moreover, the appraiser is an unbiased voice, with no vested interest in the value of a home, unlike the real estate agent, whose income is tied to the price of the home.

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

The main purpose of an appraisal report is to give a value opinion, and depending on the scope of the report, one will customarily see the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The purpose of the appraisal.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the value opinion.
  • Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the appraisal, 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 the like.
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • The scope of work used to complete the job.
For a more detailed view of what goes into an appraisal report click here: Sample Appraisal Report


Once the assignment has been completed, how can I have certainty that the value conclusion is valid?   (Go to list of  questions)

In communicating an appraisal report, each appraiser must make sure of the following:
  • The appraisal used an apropos analysis of the information.

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

  • That appraisal services were rendered in a careful and judicious fashion.

  • That a trustworthy, substantiated appraisal report was imparted.
To become a state licensed appraiser, there are strenuous education requirements as well as real world experience that must be logged. Plus, appraisers must abide by a meticulous industry code of ethics and observe 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).


   (Go to list of  questions) Regulations regarding licensing and certification are different from state to state. However, licensing and certification is most often associated with many hours of classroom study, tests and real world experience. Once licensed, he/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 hires R Cohen Appraisal   (Go to list of  questions)

Mortgage lenders are an appraiser's most likely customer, using their services to ensure a home involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does an appraiser get the data used to estimate values in Marin County or other areas?   (Go to list of  questions)

One of the primary activities of an appraiser is to compile data. Data can be described as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.

General data is gathered from a variety of places. To find out about recently sold homes to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. Tax records and other courthouse documents reveal actual sales prices in a market. Appraisers routinely 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 product.

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


How can a licensed appraiser help me?   (Go to list of  questions)

An appraisal is a worthwhile anytime the value of your home is relevant to some financial decision. If you're selling your house, an appraisal helps you set the most appropriate price. 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?   (Go to list of  questions)

PMI is an acronym for Private Mortgage Insurance. PMI guards the lender if a borrower is unable to pay on the loan and the value of the property is less 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 savings from getting rid of your PMI pays for the appraisal in no time. Nobody is more qualified than R Cohen Appraisal when it comes to analyzing real estate appreciation in Kentfield and Marin County. Contact us today.

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

The first step in most appraisals is the property inspection. 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. 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 bushes and relocate any items that would get in our way while we measure the structure. On the inside, make sure we can easily access appliances like furnaces and water heaters.

You can make things go faster and improve the quality of the appraisal report by having the following things on hand:
  • Information on the latest purchase of the property in the last three years.
  • Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
  • Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.

What is "Market Value?"   (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."



Does the appraisal belong to the bank or the consumer?   (Go to list of  questions)

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 allowed to use the report for any other purpose without permission from the lender.

This rule doesn't apply when a home owner engages 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 stated otherwise, the home owner can use the appraisal for any purpose.


Which home renovations add the most to the price?   (Go to list of  questions)

A home's location - what city it is in and even what part of that city - is key to this popular question. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

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 were second, returning 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.