Conley Real Estate Appraisals, Inc. has answers to "Frequently Asked Questions"


	Conley Real Estate Appraisals, Inc. is always eager to talk to you about any concerns you might have about appraisals or real estate in Vigo County. Contact us today to talk about how we can help you with your valuation problems.

Describe an appraisal
What does an appraiser do?
Why would I require services from Conley Real Estate Appraisals, Inc.?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
After completing the report, how can I have confidence that the value conclusion is valid?
How are appraisers certified?
Who hires Conley Real Estate Appraisals, Inc.
Where does an appraiser get the information used to estimate values in Vigo County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
Do you need anything from the homeowner in advance?
What is "Market Value?"
Who has rights to the appraisal report?
Which home renovations add the most to the price?

Describe an appraisal (Return to top)

The appraisal process is an evaluation that generates an opinion of value. There are three "common approaches to value" which assists the appraiser come to this opinion or estimate. The Cost Approach is one of the processes that real estate appraisers use to find the worth of a house; it involves finding what the improvements would be worth less physical deterioration, plus the land value. Another of the processes is the Sales Comparison Approach - which deals with making a comparison to other similar properties within a close proximity which have recently sold. Being the most popular approach, the Sales Comparison Approach is generally the most precise and best indicator of value for a property. One of the least common approaches in appraising homes is the Income Approach, which is commonly used to find the value of a property based on what an investor would pay based on the income produced by the building.

What does an appraiser do? (Return to top)

An appraiser forumlates a professional, unbiased assessment of market value, to be used in making real estate transactions. Appraisers exhibit their professional analysis in appraisal reports.

Why would I require services from Conley Real Estate Appraisals, Inc.? (Return to top)

There are many reasons to get an appraisal from Conley Real Estate Appraisals, Inc. with the most common reason being real estate and mortgage transactions. Some other reasons for purchasing an appraisal include:

To obtain a loan.
To reduce your property taxes.
To build a case for a homeowner's equity and remove PMI.
To fight improperly assessed property taxes.
To settle an estate.
To offer you a leg-up when purchasing real estate.
To figure out a reasonable sales price when selling real estate.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS need an appraisal on every property.
It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.

Click here for a more detailed explanation of the process of getting an appraisal.

Is an appraisal the same as a home inspection? (Return to top)

Appraisers do not do perform house inspections and are not home inspectors. A third-party home inspector will inspect the structure of the property, from the top to the foundation. The stereotypical property inspector's report will include an evaluation of the condition of the property's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

Is an appraisal the same as a comparative market analysis(CMA)? (Return to top)

Frankly, they have nothing in common. The CMA uses market trends to generate most of their business. An appraisal utilizes comparable sales that can be validated by public record. Also, the appraisal looks at other factors like condition, location and replacement prices. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

The person creating the report is frankly the most significant difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Further, the appraiser is an unbiased voice, with no vested interest in the value conclusion, unlike the agent, who gets a commission based upon the price of the home.

What does the appraisal report contain? (Return to top)

The main objective of an appraisal document is to let the reader know the value of the real estate in question, 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 appraisal's purpose.
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!)
Pertinent property attributes, including: location, physical attributes, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible considerations.
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 appraisal.

For a more detailed view of the work that goes into an appraisal report click here: Sample Appraisal Report

After completing the report, how can I have confidence that the value conclusion is valid? (Return to top)

In communicating an appraisal report, each appraiser must ensure the following:

The appraisal contained an appropriate analysis of the data.

Whether individually or collectively, there were no significant 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, substantiated appraisal report was conferred.

There are rigorous education and experience requirements that must be satisfied in order to get an appraisal license in Indiana. Likewise, appraisers must obey a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for developing an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

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Licensing and certification is achieved through classroom study, tests and real world experience. Once licensed, he or she must then take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who hires Conley Real Estate Appraisals, Inc. (Return to top)

Typically, appraisers are hired by lenders to estimate the value of a home involved in a loan transaction - to make sure the real estate is truly adequate collateral for the loan. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does an appraiser get the information used to estimate values in Vigo County or other areas? (Return to top)

Compiling information is one of the main tasks an appraiser performs. Data can be divided into 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 number of places. To research recent sales to be used as "comps", we often use the local Multiple Listing Service. To double-check actual sales prices, we use tax records and other public documents that are usually online nowadays. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood system.

And last but not least, the appraiser assimilates general data from his or her past experience in creating appraisals for other houses in the same market.

Why do I need a professional appraisal? (Return to 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 home, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Conley Real Estate Appraisals, Inc. is the best way to ensure assets are split up properly. Simply put, a house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.

What exactly is PMI and how can I get rid of it? (Return to top)

PMI is the common abbreviation for for Private Mortgage Insurance. PMI takes care of the lender if a borrower doesn't pay on the loan and the value of the house is lower than the balance of the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.


	Has your home value appreciated since you first purchased? Contact Conley Real Estate Appraisals, Inc. today at (812) 235-4576. You may be able to cancel your Private Mortgage Insurance premium.

Do you need anything from the homeowner in advance? (Return to top)

We start with an inspection of the home. 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 get to appliances like furnaces and water heaters.

To help speed things along as well as ensure a more accurate report, attempt if possible to have the following items:

A survey or plot map of the property and building (if readily available).
Information on any written private easements, such as a shared driveway with a neighbor.
Most recent real estate tax bill and or legal description of the property.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

What is "Market Value?" (Return to top)

Market value or fair market value is the most probable price that a property should bring (will sell for) in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, 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: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised; (3) a reasonable time is allowed for exposure to the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) 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? (Return to top)

For mortgage transactions, the lender requests the appraisal, either directly or through a third party. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The buyer is certainly entitled to a copy of the report - it's usually bundled with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

This rule doesn't apply when a home owner hires an appraiser directly. In these scenarios, the appraiser may stipulate how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can do whatever they want with the appraisal.

Which home renovations add the most to the price? (Return to top)

The added value of a particular amenity truly depends on the local market. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.

No matter where you go, however, renovating a kitchen is almost always a safe move. 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, yielding 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size.