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Frequently Asked Questions about Home Appraisals

By Penny Cook

Tell us a little bit about your company and its foundation.

Rock Valley Appraisal Service, Inc. was founded in 1998 by Thomas Backe and Penny Cook. Tom had been an appraiser for approximately 10 years, working for several companies in the area that are now competitors, but wanted his own business. Penny had 16 years of combined legal, insurance, and title experience and was looking for a more satisfying career. Both had some accounting and business management experience, and had contacts in the lending business. The timing was right for both partners and the fledgling business was formed in September, 1998. Penny completed appraisal education and training while managing the business and Tom provided appraisals in the first 1-2 years. In 2001 Tom and his wife decided to move to the state of Washington, so Penny bought out his share and has been the sole stockholder since that time. Penny then trained additional appraisers, and over the years there have been as many as five appraisers working full time as well as 4-5 full and part time office staffers. However, after 2008, when the local and national economies took a downturn, the company downsized, and today there are two appraisers, one trainee, 1 full time office manager, a researcher, 2 part time office staff people, and an IT consultant. Rock Valley Appraisal provides residential appraisals in Rock, Green, Dane, Jefferson, and Walworth Counties. Clients include banks, credit unions, mortgage companies, appraisal management companies, lawyers, investors, relocation companies, real estate agents, and homeowners. Our repeat client list expanded from 2 in the first year to several hundred currently.

What are some common questions people ask you about home appraisals and their answers (list)?

We are asked a wide range of questions that vary with type of client. Lenders and AMCs (Appraisal Management Companies) want to know the cost, coverage area, and the turn time (how long to complete), as well as the qualifications of the appraisers. Homeowners, however, often want to know how the appraisal process works in addition to the questions above. Some common questions include:

  • How long will you be at my house?

    That depends on your property. Usually 30-45 minutes, but it could be much longer if your house is very large, you have outbuildings, or a very large parcel of land.

  • Do you have to see the inside of my house?
  • Yes, nearly always, unless a lender has specifically ordered an exterior only appraisal.

  • Do I have to clean my house and do my dishes before you come?
  • No, that is not necessary because we don't appraise your personal belongings and dirt or dust does not typically affect the value of a property. [In the case of an extremely dirty or neglected home with evidence of animal damage and/or urine, infestation, etc., the value may be affected.]

  • What kinds of questions will you ask me?
  • Appraisers want to know what recent improvements have been made to the property, including roof, siding, windows, etc.; mechanicals; kitchen & bath updates; flooring, paint, etc.; decks, porches, garages, outbuildings, etc; basement finish; and any other extra features that may not be obvious (security system, in-ground irrigation). You may also be ask if there has been any damage to your home [fire, flooding, wind damage], and we may check for mold, termites, dry rot, and other factors that may lessen the value of the property. Appraisers may also ask if there have been any recent sales of properties in the neighborhood that were sold by owners without the use of a Multiple Listing Service (MLS).

  • How do you know how large my property is?
  • Appraisers measure the exterior of all dwellings, garages, outbuildings, but not the lot because that information is typically available from public sources where the information is assumed to be more accurate, because appraisers are not usually land surveyors.

  • How do you come up with a value?
  • Appraisers can use 1 or all of 3 different approaches to value: Cost Approach; Income Approach; or Sales Comparison Approach, depending on what is appropriate for a particular property. Most often the Sales Comparison Approach is the only method used unless the property is new construction or an income producing property. This means we find sales and listings of similar properties in the area and compare them to your property on a grid. After making adjustments for differences, we reconcile the adjusted values to form an opinion about the value of your property.

  • Why do I need an appraisal? Isn't the assessed value of my property what it's worth?
  • No, not necessarily. An assessment is completed by a pubic entity for the purpose of taxation. Assessments are produced by a mass appraisal process and are done periodically - sometimes only once every five years. Because market values fluctuate, and because an appraisal is completed on a specific date, the assessed value and the appraised value may be very different. Even if an assessor provides a "Fair Market Value" on the tax bill, it may be different from the appraised value. Sometimes the values produced by assessments and appraisals are similar , but they may be very different. If you own farm land, it is typically assessed very low for tax purposes, but may be worth much more on the market if it were sold.

  • How much value does my pool add?
  • If you have an above-ground pool, generally that is considered to be personal property and has no contributory value in the appraisal process. If the pool is in-ground, that depends. Condition of the pool, what is common for the market or neighborhood, market data to substantiate value, are all factors that may affect whether the appraiser will make a positive or negative adjustment for the pool.

  • I want to sell my home. Can you tell me what to list it for?
  • Generally that is the job of a Realtor. However, an appraisal will give you a good idea what the property is currently worth. In other words, this is the amount a buyer might be willing to pay and a lender would be willing to loan on. List prices are typically slightly higher than sale prices by about 3%-5%, but may be less or more depending on the market.

  • How long before my appraisal is completed?
  • Depending on how busy appraisers are, the process can take several days after inspection to as long as 3-4 weeks.

  • Can you e-mail the appraisal to me?

Yes we provide up to 3 hard copies and will e-mail as well for no additional cost.

How are home appraisers paid? (e.g. standard/fixed fee, transportation costs, etc.)

Appraisers typically charge a specific fee for an appraisal based on the type, location, requests of the client, and anticipated complexity. Single-family appraisals generally cost from $300 ? $400 in the midwest, but may be higher in other parts of the country. If lenders request additional forms [single-family rent schedules, REO addendums (foreclosed properties)], the fees are higher. Multi-unit appraisals generally run from $450-$550, but may also vary. FHA, USDA, and VA appraisals are also more expensive because there is extra work involved. Some appraisers charge mileage, but most just calculate extra travel into the quoted fee. Commercial appraisals, court testimony, or appraisals done for condemnation work may be billed hourly with additional for mileage and other incidental costs.

How long does an appraisal take?

As indicated above, the time frame from date of order to delivery of report can vary significantly depending on appraiser work volume, complexity of report, and other factors. Typically 1-2 weeks for a basic residential appraisal, but this does change throughout the year.

What advice do you have for someone receiving a home appraisal?

Good advice to homeowners is to understand that the appraisal process is based on a snapshot in time. In other words, it will tell you what your property is worth on that particular date in time. Don't stress if it is more or less than you had estimated or hoped for. Like the stock market, real estate values fluctuate. Homeowners should also understand that appraisers are not home inspectors, and may not be aware of hidden defects in the property if they are no pointed out. To receive a fair valuation of your property, the appraiser should be aware of the negative aspects as well as the positive ones. I would suggest that a homeowner prepare a list of improvements within the past 5-10 years; list extra features of the home that may not be obvious, and make sure that all areas of your property are accessible to the appraiser prior to the date of inspection. If there are pets on the property, be sure they are friendly to strangers, or, if not, they are adequately restrained during the appraisers visit. Most appraisers are used to working around dogs, cats, children, toys, laundry, and other detractions, but we would prefer not to be attacked by a protective animal or trip and fall over clutter.

What is the best way for people to reach you and or your company?

The staff at Rock Valley Appraisal Service can be reached during normal business hours (9:00 a.m. tp 5:00 p.m. M-F) at (608) 755-1228. You can fax us anytime at (608) 755-1229 or e-mail us atoffice@rockvalleyappraisal.com.

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