DLJ Appraisal Service, LLC has answers to "Frequently Asked Questions"


	DLJ Appraisal Service, LLC is happy to answer any inquiries you might have about appraisals or real estate in Greenbrier and Faulkner County. Feel free to contact us today.

Define the term "Appraisal"
What does an appraiser do?
Why would a person need services from DLJ Appraisal Service, LLC?
What is the difference between an appraisal and a home inspection?
What is the difference between an appraisal and 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 veritable?
How are appraisers certified?
Who are an appraiser's customers?
Where does DLJ Appraisal Service, LLC get the information used to estimate values in Faulkner County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
Define "Market Value"
Once complete, who actually owns the appraisal report?
How can I get the most ROI out of home improvements?

Define the term "Appraisal" (Go to list of questions)

An appraisal is an inspection leading to an opinion of value. This opinion or estimate is concluded through a formal process that generally utilizes the three main "common approaches to value". The Cost Approach is one of the approaches that appraisers use to find the value of a home; it involves finding what the improvements would cost without physical depreciation, plus the land value. Easily the most common approach in figuring the value of a house is the Sales Comparison Approach which concerns figuring a comparison to similar houses nearby. The Sales Comparison Approach is commonly the most accurate and best indicator of a liklely sales price for a residential property. One of the least common approaches in appraising residential properties is the Income Approach, which is commonly used to find the market value of a property based on what an investor would pay based on the income produced by the building.

What does an appraiser do? (Go to list of questions)

An appraiser produces a professional, unbiased determination of market value, in the support of real property transactions. Appraisers reveal the details of their findings in appraisal reports.

Why would a person need services from DLJ Appraisal Service, LLC? (Go to list of questions)

There are many reasons to purchase an appraisal from DLJ Appraisal Service, LLC with the usual reason being real estate and mortgage transactions. Some other reasons for obtaining an report include:

If you are applying for 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 contest high property taxes.
If you need to settle an estate.
To offer you a negotiating tool when purchasing a home.
To find a reasonable sales price when listing your home.
To protect 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 lawsuit.

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

What is the difference between an appraisal and a home inspection? (Go to list of questions)

Home inspectors do not figure out an opinion of value and do not do appraisal reports. The point of a home inspection is to evaluate the structure of the property from bottom to attic. The usual home inspector's report will include an evaluation of the integrity of the home's heating system, 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)

Simply put, it's night and day. The CMA uses market trends to generate most of their business. An appraisal utilizes comparable sales that can be validated by public record. The appraisal report will also contain area and construction values. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented 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, generate CMA's. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Moreover, the appraiser is an unbiased voice, with no conditional interest in the value conclusion, unlike the real estate agent, whose income is tied to the price of the home.

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

The main purpose of an appraisal report 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:

Who engaged the appraiser and other intended users.
The intended use of the appraisal.
The purpose of the appraisal.
The type of value reported 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!)
Relevant property characteristics, including: location, physical attributes, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the appraisal, 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 involved in the process of completing the job.

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

After completing the report, how can I have confidence that the value conclusion is veritable? (Go to list of questions)

In the documentation of an appraisal, each appraiser must ensure the following:

That the information analysis utilized in the appraisal was appropriate.

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

That appraisal services were not executed in a careless or negligent manner.

The final appraisal report was easy to explain, legitimate and conclusive.

To become a state licensed appraiser, there are strenuous education requirements as well as on the jobexperience that must be logged - all with the objective of being able to provide unbiased value opinions. In addition, appraisers must abide by 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 guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Go to list of questions) 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 supervisor. 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 are an appraiser's customers? (Go to list of questions)

Commonly, appraisers are employed by mortgage lenders to render a value opinion on a house involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does DLJ Appraisal Service, LLC get the information used to estimate values in Faulkner County or other areas? (Go to list of questions)

One of the most important things an appraiser does is to gather data. Data can be categorized as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is collected from a numerous sources. To find out about recent sales to be used as "comps", an appraiser will often go to the local Multiple Listing Service. To double-check actual sales prices, we use items in the assessor's office and other public documents that are usually online nowadays. Appraisers routinely have 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 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? (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 the 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 getting an independent appraisal. For parties settling an estate or divorce, an appraisal from DLJ Appraisal Service, LLC is the best documentation to ensure assets are divided fairly. 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? (Go to list of questions)

PMI is the common abbreviation for for Private Mortgage Insurance. PMI covers the lender if a borrower is unable to 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.


	The savings from dropping your PMI will make up for the price of the appraisal in no time. DLJ Appraisal Service, LLC is in the business of tracking value trends in Greenbrier and Faulkner County. Contact us today.

Should I do anything in advance of the appraisal inspection (Go to list of questions)

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 condition of its features. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house . Trim any shrubs and move any items that would make it difficult to measure the structure. On the inside, make sure we can get to items like furnaces and water heaters.

You can make our visit go faster and improve the quality of the appraisal report by having the following things on hand:

Any records on the purchase of the property for the last three years.
List of personal property to be sold with the building.
Most recent real estate tax bill from Faulkner and or legal description of the property.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .

Define "Market Value" (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."

Once complete, who actually owns the appraisal report? (Go to list of questions)

In most real estate transactions, the appraisal is ordered by the lender. 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 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 engaging the appraiser for things outside securing a mortgage. In these situations, the appraiser may state the purpose of the appraisal; 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.

How can I get the most ROI out of home improvements? (Go to list of questions)

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.

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 weren't far behind, returning 85%. Adding bedrooms and baths can also boost the value of your home (when done well) as long as your home doesn't then become an oddball for your neighborhood in terms of size.