Precision Appraisal Services has answers to "Frequently Asked Questions"

Precision Appraisal Services is more than happy to handle any questions you might have about appraisals in Wood County. Feel free to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
Why would I need your services?
Is an appraisal the same as a home inspection?
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 value indicated is legitimate?
How are appraisers certified?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in Wood County or other areas?
How can a licensed appraiser help me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Do you need anything from the homeowner in advance?
Define "Market Value"
Once complete, who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?



Define the term "Appraisal"   (List of questions)

An appraisal is a thought process allowing the appraiser to come to an opinion of value. The real estate appraiser must use a few "approaches," typically three, to draw up the estimation of market value. One of them is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, then adding the land value. Easily the most common approach in figuring the likely sales price of a house is the Sales Comparison Approach which involves figuring a comparison to similar properties nearby. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a house. 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.

Describe what an appraiser does   (List of questions)

An appraiser forumlates an objective and well justified opinion of market value, often in the context of a real estate sale. Appraisers illustate their investigation in appraisal reports.


Why would I need your services?   (List of questions)

There are many reasons to obtain an appraisal from Precision Appraisal Services 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 lower your property tax burden.
  • To demonstrate a homeowner's acquired equity and remove insurance.
  • To contest inflated property taxes.
  • To handle an estate.
  • To give you a negotiating tool when purchasing a home.
  • To find a reasonable sales price when selling 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 have to deal with being in a lawsuit - an appraisal will help.
For a more detailed description of the appraisal process click here.


Is an appraisal the same as a home inspection?   (List of questions)

Appraisers do not do perform house inspections and are not home inspectors. An inspection is a third-party evaluation of the accessible structure and appliances of a property, from the top to the foundation. Commonly, a home inspection report will discuss the amenities and the requirements of the house: 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, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

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

Frankly, it's like comparing sugar and saccharin. The CMA depends on indistinct local market trends. An appraisal relies on comparable sales that can be validated by public record. Area and building prices are also important in an appraisal. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

The credentials of the person behind the report is hands down the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA's. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Further, the appraiser is an independent voice, with no conditional interest in the value conclusion, unlike the real estate agent, whose income is tied to the value of the home.

What are the contents of an appraisal report?   (List of questions)

The main point of an appraisal report 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 purpose of the assignment.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraiser's opinions and conclusions.(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 characteristics, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible factors.
  • 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 considered when completing the job.
For a more detailed look at the work that goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, what assurance is there that the value indicated is legitimate?   (List of questions)

In the documentation of an appraisal, each appraiser must ensure the following:
  • That the information analysis utilized in the appraisal was suitable.

  • Whether individually or collectively, there were no critical errors contained in the report, nor any material details left out.

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

  • That a believable, defensible appraisal report was communicated.
There are rigorous education and practical experience requirements that must be fulfilled in order to get an appraisal license in West Virginia. Likewise, appraisers must abide by a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The rules for developing an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (List of questions) Licensing and certification requires classroom study, tests and practical experience. Once an appraiser is 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 are an appraiser's customers?   (List of questions)

Mortgage lenders are an appraiser's most likely customer, requiring 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 an appraiser get the information used to estimate values in Wood County or other areas?   (List of questions)

Gathering data is one of the primary functions of an appraiser. Data can be described as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.

General data is collected from a variety of sources. Local Multiple Listing Services (MLS) provide information on recently sold homes that might be used as comparables. Tax records and other public 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 assembles general data from his or her past experience in doing assignments for other houses in the same market.

How can a licensed appraiser help me?   (List of questions)

An appraisal is a worthwhile whenever your home's value is relevant to a financial decision. For those selling a home, you'll want to figure out the price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. When buying, you can avoid overpaying by commissioning an independent appraisal. For those settling an estate or divorce, an appraisal from Precision Appraisal Services is the best way to ensure assets are split up properly. 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.

My mortgage statement has an item on it for PMI? Can I get rid of that?   (List of questions)

PMI is short for for Private Mortgage Insurance. PMI guards the lender in case a borrower is unable to pay on the loan and the value of the home is less than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

Has your real estate appreciated since you first purchased? Contact Precision Appraisal Services today at (304) 420-9064. You may be able to get rid of your Private Mortgage Insurance premium.

Do you need anything from the homeowner in advance?   (List of questions)

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 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. On the outside, trim any bushes so we can be free to get an accurate measurement of outside walls.

You can make things go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • A plot plan or survey of the house and land (if readily available).
  • List of personal property to be sold with the home.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
  • Brag sheet that lists major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.

Define "Market Value"   (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."

Once complete, who actually owns the appraisal report?   (List of questions)

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 certainly entitled to a copy of the appraisal - 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 engages an appraiser directly. In these situations, the appraiser may stipulate the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can do whatever they want with the appraisal.

I want to get more for my house. Where should I spend money renovating?   (List of questions)

This really depends on where the home is. For example, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!

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 weren't far behind, returning 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.