All Pro Appraisals has answers to "Frequently Asked Questions"

All Pro Appraisals is more than happy to elaborate on any inquiries you might have about appraisals in Smithtown and Suffolk County. Feel free to contact us today.

Describe an appraisal
What does an appraiser do?
Why would I require a real estate appraisal?
Is an appraisal the same as a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
After completing the appraisal, what assurance is there that the final number is valid?
What are the requirements to be a certified appraiser?
Who hires an appraiser?
Where does an appraiser get the information used to estimate values in Suffolk County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?



Describe an appraisal   (Return to top)

An appraiser provides an estimation that produces an opinion of value. This opinion or estimate is discerned by using a formal process that usually utilizes three "common approaches to value". The Cost Approach is one of the processes that appraisers use to find the value of a property; it involves finding what the improvements would cost without physical deterioration, plus the land value. Another of the processes is the Sales Comparison Approach - which concerns making a comparable analysis to other similar properties within a close vicinity which have recently sold. The Sales Comparison Approach is normally the most accurate and best indicator of a liklely sales price for a residential property. The Income Approach is primarily used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of income a property would bring in.

What does an appraiser do?   (Return to top)

An appraiser offers a fair and credible assessment of market value, in the support of real estate transactions. Appraisers demonstrate their expert investigation in appraisal reports.


Why would I require a real estate appraisal?   (Return to top)

There are a lot of reasons to get an appraisal from All Pro Appraisals with the most common reason being real estate and mortgage transactions. Other reasons for ordering an report 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 Primary Mortgage Insurance.
  • To fight inflated property taxes.
  • If you need to take care of an estate.
  • To offer you a leg-up when purchasing a home.
  • To figure out a likely property value when putting your home on the market.
  • To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Government agencies such as the IRS need an appraisal on every house.
  • 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 involved in getting an appraisal.


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

Home inspectors do not estimate an opinion of value and are not appraisers. The point of a home inspection is to evaluate the structure of the home from basement to rooftop. Generally, a home inspection report will evaluate the amenities and the necessities of the property: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

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

Simply put, it's like comparing broadband and dial-up. The CMA relies on indefinite local market trends. An appraisal utilizes comparable sales that can be verified by public record. The appraisal report will also contain neighborhood and construction costs. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the largest differentiator is the person creating the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. A certified, state licensed professional who has formed a career on valuing real estate in and around Suffolk County creates the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat sum for assignments, regardless of their outcome.

What can I expect to see in my appraisal report?   (Return to top)

Each report must reflect a credible estimate of value and should identify the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • The intended use of the appraisal.
  • The reason for the assignment.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraisal.(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 attributes, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible factors.
  • 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 entailed in the activity of completing the job.
For a more in depth look at the work that goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, what assurance is there that the final number is valid?   (Return to top)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
  • The appraisal used an appropriate analysis of the data.

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

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

  • The final appraisal report was transparent, legitimate and not easily discredited.
To become a state licensed appraiser, we must satisfy intense education and experience requirements that give us the background to produce an unbiased opinion. In addition, appraisers must abide by a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for developing an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Return to top) Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. However, licensing and certification is commonly associated with many hours of classroom study, tests and practical experience. Once licensed, he/she is required to take continuing education courses so the license remains up to date. To see the specific requirements for any state click here.

Who hires an appraiser?   (Return to top)

Typically, appraisers are hired by mortgage lenders to render a value opinion on real estate involved in a loan transaction - to make sure the subject is truly adequate collateral for the loan. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

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

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

General data is received from a number of sources. To look up recent sales to be used as "comps", we often go to the local Multiple Listing Service. Tax records and other public documents verify actual sales prices in a market. Appraisers routinely have to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And last but not least, the appraiser gathers general data from his or her collective knowledge gained from doing assignments for other houses in the same market.

Why do I need a professional appraisal?   (Return to top)

If you're involved in some sort of financial decision and the value of your home is relevant, you'll want a full appraisal. If you're selling your home, 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. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making informed financial decisions.

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. This additional policy takes care of the lender in the event a borrower doesn't pay 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.

Did you secure your mortgage with less than 20% down? Contact All Pro Appraisals today at (631) 514-8065 to see if you can cancel your Private Mortgage Insurance premium.

How do I get ready for the appraiser?   (Return to top)

The first step in most appraisals is the home inspection. 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 amenities. 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 relocate any items that would make it difficult to measure the structure. On the inside, make sure the appraiser can easily access appliances like furnaces and water heaters.

You can make our visit 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 available).
  • List of personal property to be sold with the home.
  • Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
  • Brag sheet that lists major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

What does "Market Value" mean?   (Return to 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."

Does the appraisal belong to the bank or the consumer?   (Return to top)

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 entitled to a copy of the report - it's usually included with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these cases, the appraiser may state 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 use the appraisal for any purpose.

Are some home improvements more worthwhile than others?   (Return to top)

Like all things real estate, this is dependent on a home's location. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

As a rule, the best ROI from renovating a home comes in the kitchen. 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 were second, yielding 85%. On the contrary, work that may not add value would be painting just for the sake of redecorating.