American Dream Home Appraisal & Inspection Service has answers to "Frequently Asked Questions"


	American Dream Home Appraisal & Inspection Service is eager to handle any questions you might have about appraisals or real estate in Vienna and Trumbull County. Feel free to contact us today.

What is an appraisal?
Describe what an appraiser does
Why would a person need a real estate appraisal?
What is the difference between an appraisal and a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What's in an appraisal report?
Once the report has been delivered, what assurance is there that the value conclusion is legitimate?
What goes into an appraiser's certification?
Who employs appraisers?
Where does an appraiser get the data used to estimate values in Trumbull County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal appointment
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? (Return to top)

The appraisal process is an evaluation that produces an opinion of value. This opinion or estimate is discerned by a formal process that generally utilizes three "common approaches to value". One of the processes in use is the Cost Approach, which is what it would cost to replace the improvements to the home, less the depreciation and physical deterioration, plus the land value. The Sales Comparison Approach deals with searching for comparable homes in close proximity and figuring out the value based on making a comparison of those prior sales to the home being investigated. Being the most popular approach, the Sales Comparison Approach is considered the most precise and best indicator of market value for a house. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it involves estimating what an investor would pay based on the money generated by the property.

Describe what an appraiser does (Return to top)

An appraiser generates an objective and well supported opinion of market value, in the support of real property transactions. Appraisers document their professional findings in appraisal reports.

Why would a person need a real estate appraisal? (Return to top)

There are a lot of reasons to obtain an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for getting an appraisal include:

If you are applying for a loan.
If you would like to reduce your property tax obligations.
To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
To challenge improperly assessed property taxes.
To settle an estate.
To provide you a negotiating tool when purchasing real estate.
To find a reasonable price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS require an appraisal on every home.
It's possible you could be involved in a lawsuit - an appraisal will definitely help.

For a more extensive description of the appraisal process click here.

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

Home inspectors do not estimate an opinion of value and do not do appraisal reports. The point of a home inspection is to investigate the structure of the home from bottom to top. The archetypal house inspector's report will contain an evaluation of the condition of the home'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.

What is the difference between an appraisal and a comparative market analysis (CMA)? (Return to top)

Simply put, it's like comparing opera to country. What the CMA depends on are ill-defined trends. An appraisal utilizes comparable sales that can be validated by public record. The appraisal report will also include neighborhood and construction prices. All a CMA does is generate a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

The credentials of the person creating the report is actually the most significant difference between a CMA and an appraisal. Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, Ohio licensed professional who bases a career on valuing real estate in and around Trumbull County creates the appraisal. Moreover, the appraiser is an independent voice, with no vested interest in the value of a home, unlike the agent, who gets a commission based upon the price of the home.

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

Every appraisal must reflect a supported estimate of value and must clearly state the following:

The client and other intended users.
How the appraisal is supposed to be used.
The reason for the appraisal.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the value opinion.
Relevant property characteristics, including: location, physical attributes, legal attributes, economic factors, the property rights valued, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible items.
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 involved in the process of completing the job.

For a more detailed look at what goes into an appraisal report click here: Sample Appraisal Report

Once the report has been delivered, what assurance is there that the value conclusion is legitimate? (Return to top)

In the documentation of an appraisal, each appraiser must ensure the following:

The appraisal contained an apropos analysis of the data.

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

That appraisal services were provided in a careful and conscientious manner.

That a solid, supportable appraisal report was imparted.

To become a state licensed appraiser, there are intense education requirements as well as experience that must be logged - all with the objective of gaining the skills required to provide unbiased value opinions. In addition, appraisers must abide by a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Return to top) Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. However, licensing and certification typically translates to many hours of classroom study, tests and practical experience. Once licensed, he or she must then engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers? (Return to top)

Mortgage lenders are an appraiser's most likely customer, using their services to ensure property 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 an appraiser get the data used to estimate values in Trumbull County or other areas? (Return to top)

Gathering data is one of the main tasks an appraiser does. 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 while on site.

General data is collected from a many places. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood servers.

And last but not least, the appraiser gathers general data from his or her collective knowledge gained from doing assignments for other properties in the same market.

Why do I need a professional appraisal? (Return to top)

If you're involved in any kind of financial decision and the value of your home is relevant, you'll want a full appraisal. For those selling a home, you'll want to determine 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. When buying, be sure you're not overpaying by getting an independent appraisal. For people settling an estate or divorce, an appraisal from American Dream Home Appraisal & Inspection Service is the best documentation to ensure assets are split up properly. A house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making smart financial decisions.

My mortgage statement has an item on it for PMI? Can I get rid of that? (Return to top)

PMI is short for for Private Mortgage Insurance. This supplemental plan covers the lender in case a borrower defaults on the loan and the market price of the property is less than the balance of the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Has your home value appreciated since you first purchased? Call American Dream Home Appraisal & Inspection Service today at 330-539-4372 to see if you can save money by removing your Private Mortgage Insurance payment.

Should I do anything in advance of the appraisal appointment (Return to top)

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. The best thing you can do to help is make sure we have 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 we can easily access appliances 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:

A plot plan or survey of the house and land (if available).
List of personal property to be sold with the building.
Title policy that describes encroachments or easements.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
A list of "suggested" improvements when the property is being appraised "as complete".

What does "Market Value" mean? (Return 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."

Who actually owns the appraisal report? (Return to top)

In most real estate transactions, the appraisal is ordered by the lender. 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 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.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. 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.

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

Like all things real estate, this is dependent on a home's location. For example, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!

As a rule, the most value returned from renovating a home comes in the kitchen. 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%. Adding bedrooms and baths can also help the value of your home (when done well) as long as your home doesn't then become atypical for your neighborhood in terms of size.