TJ appraisals has answers to "Frequently Asked Questions"

TJ appraisals is willing to elaborate on any concerns you might have about appraisals in Beaver, Allegheny, Lawrence & Mercer County. Contact us today to learn how we can help solve your valuation problems.

What is an appraisal?
What does an appraiser do?
Why would someone request services from TJ appraisals?
Is an appraisal the same as a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
Upon completion of the report, what guarantee is there that the value conclusion is trustworthy?
How hard is it to become certified?
Who employs appraisers?
Where does TJ appraisals get the data used to estimate values in Beaver County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What is "Market Value?"
Who has rights to the appraisal report?
Which home renovations add the most to the price?



What is an appraisal?   (Top)

An appraisal is an investigation that concludes with an opinion of value. The appraiser will typically use a number of "approaches," typically three, to arrive at the estimation of market value. The Cost Approach is one of the methods that appraisers use to find value; it involves discerning what the improvements would cost minus physical degradation, adding the land value. Easily the most common approach in finding the value of a home is the Sales Comparison Approach which deals with concluding a comparison to similar houses close by. Generally speaking, the Sales Comparison Approach is the most accurate indicator of market value of a residential property. The Income Approach is mainly used for finding the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.

What does an appraiser do?   (Top)

An appraiser produces an objective and well justified determination of market value, often in the context of a real estate purchase. Appraisers reveal the details of their conclusions in appraisal reports.


Why would someone request services from TJ appraisals?   (Top)

There are many reasons to order an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for getting an appraisal report include:
  • To obtain 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 contest inflated property taxes.
  • To deal with an estate.
  • To provide you a negotiating tool when purchasing real estate.
  • To determine a reasonable price when listing your home.
  • To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Because an official agency such as the IRS requires it.
  • If you ever find yourself in a civil case.
For a more extensive description of the appraisal process click here.


Is an appraisal the same as a home inspection?   (Top)

Appraisers do not do complete house inspections and are not home inspectors. An inspection is a third-party evaluation of the livable structure and electrical and mechanical systems of a property, from the roof to the bottom. Usually, a home inspection report will discuss the amenities and the necessities of the house: air conditioning (weather permitting), electrical systems, 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.

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

Honestly, they have nothing in common. The CMA relies on vague local market trends. An appraisal relies on comparable sales that can be validated by public record. The appraisal report will also include neighborhood and construction values. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the biggest difference is who's creating the report. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to accept a flat fee for assignments, regardless of their outcome.

What are the contents of an appraisal report?   (Top)

The main objective 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 appraisal.
  • The type of value contained and a definition of that value.
  • The effective date of the value opinion.(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 real property interest in question, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible considerations.
  • 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 activity of completing the appraisal.
For a more comprehensive look at what goes into an appraisal report click here: Sample Appraisal Report


Upon completion of the report, what guarantee is there that the value conclusion is trustworthy?   (Top)

In communicating an appraisal report, each appraiser must make sure of the following:
  • That the information analysis implemented in the appraisal was appropriate.

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

  • That appraisal services were not carried out in a careless or negligent fashion.

  • The final appraisal report was understandable, credible and conclusive.
To become a state licensed appraiser, we must satisfy extensive education and experience requirements that enable us to formulate an unbiased opinion. Plus, appraisers must obey a strict industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Top) Licensing and certification is achieved through classroom study, tests and experience working under a supervisor. Once licensed, he or she is required to take continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who employs appraisers?   (Top)

Typically, appraisers are hired by lenders to render a value opinion on property involved in a loan transaction. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does TJ appraisals get the data used to estimate values in Beaver County or other areas?   (Top)

One of the main things an appraiser does is to collect data. Data can be split into Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specific data are documented by the appraiser while on site.

General data is collected from a variety of sources. To find out about recent sales to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. Tax records and other courthouse documents reveal 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 last but not least, the appraiser assimilates general data from his or her past experience in creating appraisals for other properties in the same market.


Why should I hire a licensed appraiser?   (Top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. If you're 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 TJ appraisals is the best documentation to ensure assets are divided evenly. A home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.


What exactly is PMI and how can I get rid of it?   (Top)

PMI stands for Private Mortgage Insurance. PMI takes care of the lender in the event a borrower defaults on the loan and the value of the property is lower than the balance of 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 TJ appraisals today at 7246014564. You may be able to get rid of your Private Mortgage Insurance payment.

How do I get ready for the appraiser?   (Top)

We begin with an inspection of the property. 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, pick up any clutter and make sure 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 exterior walls.

You can make things go faster and improve the quality of the appraisal report by having the following things on hand:
  • A plot plan or survey of the house and land (if available).
  • Written property agreements, such as a maintenance agreement for a shared driveway.
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.
  • A list of any major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
  • A list of "suggested" improvements when the property is being appraised "as complete".

What is "Market Value?"   (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 has rights to the appraisal report?   (Top)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. 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 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.

The exception to this rule is when a home owner hires an appraiser directly. In these cases, the appraiser may state 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.


Which home renovations add the most to the price?   (Top)

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!

As a rule, the best ROI from renovating a home comes in the kitchen. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms are right up there with kitchens, returning 85%. Adding bedrooms and baths can also help the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.