Bosheaba Inc. has answers to "Frequently Asked Questions"


	Bosheaba Inc. is happy to talk to you about any questions you might have about appraisals in Saline County. Contact Bosheaba Inc. today to learn how we can help you with your specific valuation problems.

What is an appraisal?
Describe what an appraiser does
What would cause me to request a real estate appraisal?
How is an appraiser different than a home inspector?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What does the appraisal report contain?
Once the report has been completed, what guarantee is there that the value indicated is veritable?
How are appraisers certified?
Who do appraisers work for?
Where does Bosheaba Inc. get the data used to estimate values in Saline County or other areas?
Why should I hire a licensed appraiser?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Do you need anything from me in advance?
What does "Market Value" mean?
Who actually owns the appraisal report?
Are some home improvements more worthwhile than others?

What is an appraisal? (Go to list of questions)

The process of writing an appraisal consists of an evaluation which forms an opinion of value. This opinion or estimate is concluded by using a formal method that usually utilizes three "common approaches to value". One of the three is the Cost Approach - which is how much it would cost to replace the improvements, minus physical deterioration and other factors, then adding the land value. The Sales Comparison Approach involves searching for similar properties in close proximity and figuring out the value based on making a comparison of those properties to the house being appraised. The Sales Comparison Approach is commonly the most definitive and clearest indicator of value for a house. One of the least common approaches in appraising houses is the Income Approach, which is mainly used to figure the market value of a property based on what an investor would pay based on the income produced by the building.

Describe what an appraiser does (Go to list of questions)

An appraiser generates an impartial and well supported opinion of market value, to be used in making real estate transactions. Appraisers exhibit their professional investigation in appraisal reports.

What would cause me to request a real estate appraisal? (Go to list of questions)

There are a lot of reasons to get an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for getting an appraisal report include:

To receive a loan.
To lower your property taxes.
To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
To contest high property taxes.
If you need to settle an estate.
To give you a leg-up when purchasing a home.
To determine the most probable sales price when selling real estate.
To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
Because a government agency such as the IRS requires it.
If you ever find yourself in a civil case.

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

How is an appraiser different than a home inspector? (Go to list of questions)

The appraiser is not a home inspector nor does he/she do a full home inspection. An inspection is a third-party investigation of the livable structure and appliances of a home, from the top to the foundation. The stereotypical property inspector's report will contain an evaluation of the condition of the house'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.

What is the difference between an appraisal and a comparative market analysis (CMA)? (Go to list of questions)

To be blunt, it's apples and oranges. The CMA utilizes market trends to create most of their business. Appraisals use comparable sales which are valid resources. Also, the appraisal verifies other factors like condition, area and construction costs. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

Who's creating the report is frankly the most significant difference between a CMA and an appraisal. Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. 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 accept a flat sum for work they perform, regardless of their value conclusion.

What does the appraisal report contain? (Go to list of questions)

The main point of an appraisal document is to provide a value opinion, and depending on the scope of the report, one will customarily see the following:

Who engaged the appraiser and other intended users.
How the appraisal is supposed to be used.
The purpose of the assignment.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraisal.
Pertinent property characteristics, including: location, physical characteristics, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible items.
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 included in the activity of completing the job.

For a more comprehensive look at what goes into an appraisal report click here: Sample Appraisal Report

Once the report has been completed, what guarantee is there that the value indicated is veritable? (Go to list of questions)

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

The appraisal contained a suitable analysis of the data.

That crucial errors of omission or commission were not committed individually or collectively.

That appraisal services were delivered in a careful and cognizant fashion.

That a credible, supportable appraisal report was communicated.

To become a state licensed appraiser, we must meet intense education and experience requirements that prepare us to formulate an unbiased opinion. Likewise, appraisers must follow a strict industry code of ethics and observe national standards of practice for real estate appraisal. The rules for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Go to list of questions) Licensing and certification takes coursework, tests and real world experience. Once an appraiser is licensed, he or she must then complete continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who do appraisers work for? (Go to list of questions)

Mortgage lenders are an appraiser's typical client, requiring their services to ensure property involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Bosheaba Inc. get the data used to estimate values in Saline County or other areas? (Go to list of questions)

One of the main activities of an appraiser is to collect property data. Data can be classified as either Specific or General. Specific data is 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 variety of sources. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers often need to report when a property is in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And most importantly, the appraiser gathers general data from his or her past experience in doing assignments for other properties in the same market.

Why should I hire a licensed appraiser? (Go to list of questions)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. For those selling a home, you'll want to figure out a price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. When buying, you can avoid overpaying by commissioning an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making the right financial decisions.

My mortgage statement has an item on it for PMI? Can I get rid of that? (Go to list of questions)

PMI stands for Private Mortgage Insurance. This supplementary plan takes care of the lender in case a borrower is unable to pay on the loan and the value of the home is less than what is owed on 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.


	Does your monthly loan payment include a fee for PMI?Call Bosheaba Inc. today at 618-926-4621 or send us an e-mail. A current appraisal could save you thousands.

Do you need anything from me in advance? (Go to list of questions)

The first step in most appraisals is the property 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 the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any bushes and move any items that would get in our way while we measure the structure. Indoors, make sure we can get to items like furnaces and water heaters.

To help expedite our work as well as ensure a more accurate report, try if possible to have the following items:

Any information on the purchase of the property for the last three years.
Written property agreements, such as a maintenance easement for a shared driveway.
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.
Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .

What does "Market Value" mean? (Go to list of questions)

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 actually owns the appraisal report? (Go to list of questions)

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 entitled to use the report for any other purpose without permission from the lender.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these scenarios, the appraiser may state how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.

Are some home improvements more worthwhile than others? (Go to list of questions)

Like all things real estate, this is dependent on a home's location. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

No matter where you go, however, renovating a kitchen is almost always a safe move. 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 weren't far behind, returning 85%. Adding bedrooms and baths can also help the value of your home (when done well) as long as your home doesn't then become overbuilt for your neighborhood in terms of size.