Home Sweet Home Appraisals, LLC has answers to "Frequently Asked Questions"

Home Sweet Home Appraisals, LLC is always prepared to address any inquiries you might have about appraisals in Pueblo West and Pueblo County. Don't hesitate to contact us today.

What is an appraisal?
What does an appraiser do?
What are the reasons someone would require your services?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
Once the appraisal has been delivered, how can I have a guarantee that the value conclusion is trustworthy?
How difficult is it to become certified?
Who do appraisers work for?
Where does Home Sweet Home Appraisals, LLC get the information used to estimate values in Pueblo County or other areas?
Why do I need a professional appraisal?
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?
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?



What is an appraisal?   (Back to top)

An appraisal report is an investigation leading to an opinion of value. The real estate appraiser will use a number of "approaches," typically three, to come to the estimation of market value. The Cost Approach is one of the methods that appraisers use to find the value of a house; it involves discerning what the improvements would cost without physical degradation, plus the land value. Another of the methods is the Sales Comparison Approach - which concerns discovering a comparable analysis to other similar properties within a close vicinity which have recently sold. The Sales Comparison Approach is normally the most definitive and clearest indicator of value for a residential property. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it involves estimating what an investor would pay based on the money generated by the property.

What does an appraiser do?   (Back to top)

An appraiser generates an unprejudiced and well supported determination of market value, in the support of real estate exchanges. Appraisers document their expert findings in appraisal reports.


What are the reasons someone would require your services?   (Back to top)

There are many reasons to order an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for purchasing an appraisal report include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax obligations.
  • To demonstrate a homeowner's acquired equity and remove insurance.
  • To fight improperly assessed property taxes.
  • If you need to take care of an estate.
  • To provide you an edge when purchasing a home.
  • To find the most probable price when selling real estate.
  • 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 ever find yourself in a civil case.
If you need a more detailed explanation of the appraisal process, please click here.


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

Appraisers do not do complete house inspections and are not home inspectors. The point of a home inspection is to investigate the structure of the property from bottom to attic. Usually, a home inspection report will evaluate the amenities and the necessities of the home: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

Is an appraisal the same as a comparative market analysis(CMA)?   (Back to top)

To be honest, they share nothing in common. The CMA depends on vague local market trends. Appraisals use comparable sales which are valid resources. The appraisal report will also contain location and construction prices. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the most significant factor is who's creating the report. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Further, the appraiser is an independent party, with no vested interest in the property's value, unlike the real estate agent, whose income is tied to the price of the home.

What's in an appraisal report?   (Back to top)

Every appraisal should reflect a believable value opinion and will identify the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • The intended use of the appraisal.
  • The purpose of the assignment.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraisal.
  • Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic attributes, the real property interest in question, 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 other items of a similar nature.
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • The scope of work used while working up the appraisal.
For a more comprehensive view of all that goes into an appraisal report click here: Sample Appraisal Report


Once the appraisal has been delivered, how can I have a guarantee that the value conclusion is trustworthy?   (Back to top)

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

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

  • That appraisal services were delivered in a careful and conscientious manner.

  • That a solid, supportable appraisal report was conferred.
To become a state licensed appraiser, there are strenuous education requirements as well as practical experience that must be attained. Likewise, appraisers must obey a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for working up an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Back to top) Regulations regarding licensing and certification vary from state to state. In general, licensing and certification is commonly associated with many hours of classroom study, tests and experience working under a supervisory appraiser. Once licensed, he/she is required to engage in 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 most likely customer, needing their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Home Sweet Home Appraisals, LLC get the information used to estimate values in Pueblo County or other areas?   (Back to top)

One of the most important things an appraiser does is to collect data. Data can be classified as either Specific or General. Specific data is 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 places. To research recent sales to be used as "comps", we typically use the local Multiple Listing Service. To verify actual sales prices, we research tax records and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood system.

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 do I need a professional appraisal?   (Back to top)

An appraisal is a valuable tool anytime your home's value is relevant to a financial decision. For those selling a home, you'll want to figure out a 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. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from Home Sweet Home Appraisals, LLC is the best way to ensure assets are split up fairly. Simply put, a home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making the right financial decisions.


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

PMI is short for for Private Mortgage Insurance. This supplementary plan takes care of the lender in case a borrower doesn't pay on the loan and the value of the house is lower than what the borrower still owes on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

The money you keep from cancelling your PMI will make up for the price of the appraisal in no time. Home Sweet Home Appraisals, LLC is a name you can trust when it comes to real estate value trends in Pueblo West and Pueblo County. Contact us today.

Should I do anything in advance of the appraisal inspection   (Back to top)

We start with an inspection of the home. 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. On the home's interior, make sure it is clutter free and that we can access things like furnaces and water heaters. On the outside, trim any bushes 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:
  • Written property agreements, such as a maintenance easement for a shared driveway.
  • List of personal property to be sold with the home.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
  • A list of any major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
  • A list of "proposed" improvements if the property is to be appraised "as complete".

What does "Market Value" mean?   (Back to top)

In real estate appraising, 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?   (Back to top)

For mortgage transactions, the lender requests the appraisal, either directly or through a third party. 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 bundled 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 hires an appraiser directly. In these situations, the appraiser may state 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 use the appraisal for any purpose.


How can I get the most ROI out of home improvements?   (Back to top)

Like all things real estate, this is dependent on a home's location. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.

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, yielding 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.