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Herman/Harriet Appraisal Group, LLC. has answers to "Frequently Asked Questions"

Herman/Harriet Appraisal Group, LLC. is always willing to answer any concerns you might have about appraisals in Bridgewater and Somerset County. Feel free to contact us today.

What is an appraisal?
What does an appraiser do?
What would cause me to need services from Herman/Harriet Appraisal Group, LLC.?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
Once the report has been delivered, what assurance is there that the value indicated is veritable?
How are appraisers certified?
Who are an appraiser's customers?
Where does Herman/Harriet Appraisal Group, LLC. get the data used to estimate values in Somerset County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Do you need anything from the homeowner in advance?
What does "Market Value" mean?
Who actually owns the appraisal report?
Which home renovations add the most to the price?



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

The process of performing an appraisal consists of an investigation which leads to an opinion of value. The real estate appraiser will use a few "approaches," typically three, to come to the estimation of market value. One of the methods in use is the Cost Approach, which finds what it would cost to replace the improvements to the house, minus depreciation and physical deterioration, plus the land value. Another of the approaches is the Sales Comparison Approach - which deals with making a comparable analysis to other similar properties within a close proximity which have recently sold. Being the most commonly used approach, the Sales Comparison Approach is generally the most precise and best indicator of market value for a residential property. One of the least common approaches in appraising residential properties is the Income Approach, which is commonly used to find the value of a property based on what an investor would pay based on the income produced by the building.

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

An appraiser produces a professional, unbiased opinion of market value, in the support of real property transactions. Appraisers illustate their professional conclusions in appraisal reports.


What would cause me to need services from Herman/Harriet Appraisal Group, LLC.?   (Go to list of  questions)

There are many reasons to get an appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for purchasing an appraisal report include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
  • To contest inflated property taxes.
  • If you need to take care of an estate.
  • To provide you a leg-up when purchasing a home.
  • To find the most probable 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 require an appraisal on every home.
  • If you ever find yourself in a lawsuit.
Click here for a more detailed explanation of the process about getting an appraisal.


What is the difference between an appraisal and a home inspection?   (Go to list of  questions)

Appraisers do not do provide home inspections and are not home inspectors. An inspection is a third-party evaluation of the accessible structure and appliances of a house, from the roof to the bottom. For the most part, a home inspection report will explain the amenities and the requirements of the property: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

Is an appraisal the same as a comparative market analysis(CMA)?   (Go to list of  questions)

Simply put, it's like comparing broadband and dial-up. What the CMA depends on are vague trends. An appraisal is based on comparable sales that can be verified by records. Area and building costs are also precedent 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, who may not have a complete understanding of valuation methods or the entire market, write CMA's. A certified, state licensed professional who has formed their livelihood on valuing real estate in and around Somerset County creates the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon fee for work they perform, regardless of their outcome.

What does the appraisal report contain?   (Go to list of  questions)

The main objective of an appraisal document is to provide a value opinion, and depending on the scope of the report, one will customarily see the following:
  • Who engaged the appraiser and other intended users.
  • How the appraisal is supposed to be used.
  • The appraisal's purpose.
  • The type of value contained and a definition of that value.
  • The effective date of the appraiser's opinions and conclusions.
  • Relevant property characteristics, including: location, physical attributes, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible considerations.
  • 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.
  • What was entailed in the process of completing the job.
For a more detailed look at all that goes into an appraisal report click here: Sample Appraisal Report


Once the report has been delivered, what assurance is there that the value indicated is veritable?   (Go to list of  questions)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • That the information analysis contained in the appraisal was proper.

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

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

  • The final appraisal report was understandable, credible and not easily discredited.
To become a state licensed appraiser, there are education requirements as well as on the jobexperience that must be attained - all with the objective of gaining the skills required to provide unbiased value opinions. Likewise, appraisers must abide by a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for developing an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Go to list of  questions) Licensing and certification takes classroom study, tests and real world experience. 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 are an appraiser's customers?   (Go to list of  questions)

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. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does Herman/Harriet Appraisal Group, LLC. get the data used to estimate values in Somerset County or other areas?   (Go to list of  questions)

Compiling data is one of the primary occupations of an appraiser. Data can be divided into Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specifics are gathered by the appraiser while on site.

General data is collected from a number of places. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers often 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 service.

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


What can a full appraisal do for me?   (Go to list of  questions)

If you're involved in any kind of financial decision and the value of your home is relevant, you'll want a full 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 parties settling an estate or divorce, an appraisal from Herman/Harriet Appraisal Group, LLC. is the best documentation to ensure assets are split up evenly. Simply put, a house 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 stands for Private Mortgage Insurance. This supplemental policy protects the lender if a borrower defaults 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.

Has your real estate appreciated since you first purchased? Contact Herman/Harriet Appraisal Group, LLC. today at 732-915-1099 to see if you can save money by removing your Private Mortgage Insurance payment.

Do you need anything from the homeowner in advance?   (Go to list of  questions)

The first step in most appraisals is the home inspection. During this process, we 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. 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.

To help expedite our work plus ensure a more accurate report, try if possible to have the following items:
  • Records on the latest purchase of the property in the last three years.
  • Title policy that lists encroachments or easements.
  • Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
  • Find copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
  • Most recent real estate tax bill from Somerset and or legal description of the property.

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

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."



Who actually owns the appraisal report?   (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 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.

This rule doesn't apply when a home owner hires an appraiser directly. In these scenarios, the appraiser may state the purpose of the appraisal; 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.


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

It really depends on the market. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 weren't far behind, returning 85%. On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.