Judy Kay Burr has answers to "Frequently Asked Questions"

Judy Kay Burr is happy to address any concerns you might have about appraisals in Bremer County. Contact us today to see how we can help you with your specific valuation problems.

What is an appraisal?
Describe what an appraiser does
What would cause me to need your services?
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?
Once the report has been completed, what guarantee is there that the value indicated is veritable?
How hard is it to become certified?
Who are an appraiser's customers?
Where does an appraiser get the data used to estimate values in Bremer County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
How does an appraiser define "Market Value"?
Who has rights to the appraisal report?
I want to get more for my house. Where should I spend money renovating?



What is an appraisal?   (Top)

An appraisal is a thought process that concludes with an opinion of value. This opinion or estimate is found through the use of a formal process that typically uses three "common approaches to value". One of the processes in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the home, less the depreciation and physical dilapidation, adding the land value. The most common approach in figuring the value of a home is the Sales Comparison Approach which involves figuring a comparison to comparable houses nearby. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a home. One of the least common approaches in appraising residential properties is the Income Approach, which is mainly used to determine the value of a property based on what an investor would pay based on the income produced by the property.

Describe what an appraiser does   (Top)

An appraiser forumlates a fair and credible assessment of market value, to be used in making real estate transactions. Appraisers show their professional conclusions in appraisal reports.


What would cause me to need your services?   (Top)

There are a lot of reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for purchasing an appraisal include:
  • To receive a loan.
  • To lower your tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
  • To challenge improperly assessed property taxes.
  • To settle an estate.
  • To provide you a leg-up when purchasing real estate.
  • To find a likely property value when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS require an appraisal on every property.
  • It's possible you could be involved in a lawsuit - an appraisal will definitely help.
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 perform house inspections and are not home inspectors. A third-party home inspector will evaluate the structure of the house, from the roof to the bottom. Generally, a home inspection report will evaluate the amenities and the necessities of the house: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

Is an appraisal the same as a comparative market analysis(CMA)?   (Top)

To be blunt, it's like comparing broadband and dial-up. The CMA utilizes market trends to generate most of their business. An appraisal relies on comparable sales that can be validated by public record. In addition, the appraisal looks at other factors like condition, area and replacement prices. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

The credentials of the person behind the report is frankly the biggest difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Further, the appraiser is an independent voice, with no conditional interest in the property's value, unlike the agent, who gets a commission based upon the price of the home.

What does the appraisal report contain?   (Top)

Every appraisal should indicate a credible value opinion and should clearly state the following:
  • Who engaged the appraiser and other intended users.
  • The intended use of the appraisal.
  • The appraisal's purpose.
  • Precisely what "value" attribute is being reported and what that value means.
  • 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 attributes, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible items.
  • 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.
  • What was entailed in the process of completing the job.
For a more in depth view of all that 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?   (Top)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • That the information analysis utilized in the appraisal was proper.

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

  • That appraisal services were done in a careful and conscientious manner.

  • That a believable, defensible appraisal report was conferred.
To become a state licensed appraiser, we must meet considerable education and experience requirements that train us to formulate an unbiased opinion. Plus, appraisers must obey a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for working up an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Top) Regulations regarding licensing and certification vary from state to state. However, licensing and certification is commonly associated with many hours of coursework, tests and experience working under a supervisory appraiser. Once an appraiser is licensed, he/she must then take continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who are an appraiser's customers?   (Top)

Mortgage lenders are an appraiser's most likely client, requiring their services to ensure property involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does an appraiser get the data used to estimate values in Bremer County or other areas?   (Top)

Compiling information is one of the main things an appraiser does. Data can be split into Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.

General data is received from a numerous places. To research recently sold homes to be used as "comps", we typically go to the local Multiple Listing Service. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers often have to report when a property is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

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


How can a licensed appraiser help me?   (Top)

An appraisal is a worthwhile whenever your home's value is relevant to some financial decision. When selling your house, an appraisal helps you set a price that maximizes profit and reduces time on the market. When buying, you can avoid overpaying by getting an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. Simply put, 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?   (Top)

PMI is an acronym for Private Mortgage Insurance. PMI takes care of the lender in case a borrower doesn't pay on the loan and the value of the property 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.

The money you keep from getting rid of the PMI required when you got your mortgage pays for the appraisal in no time. Nobody is more qualified than Judy Kay Burr when it comes to analyzing real estate appreciation in Denver and Bremer County. Contact us today.

Should I do anything in advance of the appraisal inspection   (Top)

The first step in most appraisals is the property inspection. 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 landscaping so we can be free to get an accurate measurement of exterior walls.

You can make things go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • Information on any written private agreements, such as a shared driveway with a neighbor.
  • Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
  • Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .
  • Locate copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
  • Most recent real estate tax bill from Bremer and or legal description of the property.

How does an appraiser define "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 requests 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 appraisal - 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.

This rule doesn't apply when a home owner hires an appraiser directly. In these cases, the appraiser may stipulate how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can use the appraisal for any purpose.


I want to get more for my house. Where should I spend money renovating?   (Top)

The added value of a particular amenity truly depends on the local market. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

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 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 atypical for your neighborhood in terms of size.