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How Your Home Is Appraised: An Interview with Tony Darga of A&B Tax Service

By Tony Darga

Tell us a little bit about your company and the services you offer.

A&B Tax Service was originally established in 1999 specializing in personal income tax preparation; thus, the name A&B Tax Service. However, starting in late 2002, it expanded into form-filling services for a local real estate appraiser, which morphed into including the full appraisal process for residential properties by early 2004. While we still prepare income tax returns for individuals, the bulk of our business is residential real estate appraisals.

In most cases, who typically orders a home appraisal?

Most appraisals are ordered by financial institutions because one of their customers applied for a loan for purchase of a home or refinance of an existing loan. Attorneys may order an appraisal in order to settle an estate due to death of the owner; or to divide assets in a divorce.

What types of appraisals would a homeowner order?

Homeowners typically order appraisals to either challenge a property tax assessment or create a starting point for negotiations in a private party transfer of the property (when no licensed real estate agent is involved).

Can you outline the major steps in the appraisal process from start to finish?

1) Receive the order (assignment). 2) Conduct preliminary investigation to determine whether to accept the assignment and estimate appropriate fee based on anticipated scope of work. 3) Accept or decline assignment. After accepting assignment: 1) Collect information about the property to be appraised from MLS and local government sources including the local government websites and assessor's. 2) Schedule inspection of the property. 3) Search MLS and/or local government databases for comparable sales. 4) Inspect the property to be appraised, taking as many photographs as needed to document the condition of the property and at least drive by the comparable properties to photograph them from the road. 5) Collect data necessary to discern market trends and analyze factors that impact the trends. 6) Determine highest and best use of the property. 7) Determine value of site based on highest and best use. 8) Estimate cost to rebuild structures. 9) Compare the property being appraised to the comparable sales and analyze the differences. 10) If property used to produce income, determine value based on rent multipliers. 11) Reconcile each of the approaches to value separately and to each other. 12) Report your findings.

When you're appraising a house, what are some of the main things you're looking at?

Location (city, country, main arterial, side street, culdesac, lakefront, etc.), view (other homes, busy street, wetlands, lake, industrial, etc.), site size and configuration (square, rectangle, etc.), quality of construction (granite countertops, tile flooring, structural ornamentation), condition (new, like new, visible wear and tear), bathroom counts and locations (any private suites?), size and style of structure (square feet and ranch, cape cod, colonial, etc.), layout (open concept vs. lots of walls and hallways), garage (attached, detached, built-in, and size), outbuildings (garden shed, extra garage/workshop, barn), and other amenities (fireplaces, porch, patio, deck, gazebo, balcony, pool, fence). All contribute to or impact value.

What does an appraisal report include and when it is usually available?

The report typically includes data about the property being appraised, summary of the findings including the approaches to value used, reconciliation of values within and between the approaches to value, photographs, maps, and any other exhibits the appraiser feels is needed to support the findings, such as sketches and calculations, market charts, zoning descriptions, etc.; and is available upon completion of the report. Some reports are completed within 24 hours of the inspection; and others take longer. When for mortgage financing, the report may be reviewed by the lender before being made available to the borrower; which may take a few days; but the lender is typically required to supply a copy of the report to the borrower upon request.

Is there anything that most homeowners or homebuyers don't understand about the appraisal process?

The amount of time the appraiser needs to spend on the assignment after viewing the property.

What's the best way for people to contact you and your company?

Email requests for appraisals to afdarga@afdarga.com; or call me at 262-930-9157

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About The Author

Tony is part of A&B Tax Service that specializes in the more difficult residential...

Phone: 262-930-9157

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