Jersey Capital Appraisal Service has answers to "Frequently Asked Questions"


	Jersey Capital Appraisal Service is ready to address any inquiries you might have about appraisals or real estate in Medford and Burlington County. Feel free to contact us today.

Define the term "Appraisal"
What does an appraiser do?
What would cause me to require services from Jersey Capital Appraisal Service?
What is the difference between an appraisal and a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What can I expect to see in my appraisal report?
Once the assignment has been delivered, how can I have confidence that the value indicated is legitimate?
What does it mean for an appraiser to be licensed?
Who employs appraisers?
Where does an appraiser get the data used to estimate values in Burlington County or other areas?
How can a licensed appraiser help me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal inspection
How does an appraiser define "Market Value"?
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?

Define the term "Appraisal" (See list of FAQ's)

The method of producing an appraisal report consists of an estimation which forms an opinion of value. The real estate appraiser will use a several "approaches," typically three, to come to the estimation of market value. One of the processes in use is the Cost Approach, which finds what it would cost to restore the improvements to the home, less the age and physical deterioration, adding the land value. Another of the processes is the Sales Comparison Approach - which concerns finding a comparison to other similar properties within a close vicinity which have recently sold. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a house. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it involves estimating what an investor would pay based on the income produced by the property.

What does an appraiser do? (See list of FAQ's)

An appraiser produces an objective and well supported assessment of market value, to be used in making real estate transactions. Appraisers exhibit their expert investigation in appraisal reports.

What would cause me to require services from Jersey Capital Appraisal Service? (See list of FAQ's)

There are many reasons to get an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal report include:

To obtain a loan.
If you would like to lower your property tax obligations.
To show a homeowner has 30% equity and remove PMI.
To challenge high property taxes.
If you need to take care of an estate.
To provide you a leg-up when purchasing real estate.
To figure out a likely sales price when putting your home on the market.
To ensure parties are provided just compensation in eminient domain cases.
Because an official agency such as the IRS requires it.
It's possible you could be involved in a lawsuit - an appraisal will help.

For a more extensive explanation of the appraisal process click here.

What is the difference between an appraisal and a home inspection? (See list of FAQ's)

The appraiser is not a home inspector and he or she does not do a complete home inspection. A third-party home inspector will evaluate the structure of the house, from the top to the bottom. For the most part, a home inspection report will evaluate the amenities and the requirements of the house: air conditioning (weather permitting), electrical services, 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.

My agent performed a CMA for me. Is that the same as an appraisal? (See list of FAQ's)

Simply put, it's like comparing broadband and dial-up. The CMA utilizes market trends to create most of their business. An appraisal utilizes comparable sales that can be proven by records. Also, the appraisal looks at other factors like condition, area and building costs. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the most significant factor is who's creating the report. 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 produce by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat sum for work they perform, regardless of their outcome.

What can I expect to see in my appraisal report? (See list of FAQ's)

Every report must reflect a believable value opinion and must document the following:

Who engaged the appraiser 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.
Relevant property characteristics, including: location, physical characteristics, legal attributes, economic factors, the property rights in question, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible considerations.
Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and other items of a similar nature.
Division of interest, such as fractional interest, physical segment and partial holding.
The scope of work considered to complete the assignment.

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

Once the assignment has been delivered, how can I have confidence that the value indicated is legitimate? (See list of FAQ's)

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

The appraisal used a suitable analysis of the data.

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

That appraisal services were provided in a careful and judicious manner.

The final appraisal report was transparent, legitimate and not easily discredited.

To become a state licensed appraiser, we must fulfill extensive education and experience requirements that train us to produce an unbiased opinion. Plus, 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 guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's) Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. However, licensing and certification is most often associated with many hours of coursework, tests and real world experience. Once an appraiser is licensed, he or she must then complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers? (See list of FAQ's)

Mortgage lenders are an appraiser's most likely customer, requiring their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does an appraiser get the data used to estimate values in Burlington County or other areas? (See list of FAQ's)

Collecting data is one of the primary roles of an appraiser. Data can be split into Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is collected from a variety of sources. To look up recently sold homes to be used as "comps", an appraiser will often use the local Multiple Listing Service. Tax records and other public documents reveal actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood servers.

And most importantly, the appraiser assembles general data from his or her collective knowledge gained from doing assignments for other properties in the same market.

How can a licensed appraiser help me? (See list of FAQ's)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. When selling your home, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. When buying, be sure you're not overpaying by commissioning an independent appraisal. For people settling an estate or divorce, an appraisal from Jersey Capital Appraisal Service is the best way to ensure assets are split up fairly. A house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

My mortgage statement has an item on it for PMI? Can I get rid of that? (See list of FAQ's)

PMI is the common abbreviation for for Private Mortgage Insurance. It protects the lender if a borrower is unable to pay on the loan and the value of the house is lower 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.


	Has your real estate appreciated since you first purchased? Call Jersey Capital Appraisal Service today at 609-268-1719 to see if you can save money by removing your Private Mortgage Insurance premium.

Should I do anything in advance of the appraisal inspection (See list of FAQ's)

We start with an inspection of the property. 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 amenities. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house . Trim any shrubs and relocate any items that would make it difficult to measure the structure. Indoors, make sure the appraiser can get to items like furnaces and water heaters.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:

A survey or plot map of the property and building (if readily available).
A list of any personal property that will be left behind and sold with the home, such as an oven, or a washer and dryer, if applicable.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
Find copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.
A list of "suggested" improvements when the property is being appraised "as complete".

How does an appraiser define "Market Value"? (See list of FAQ's)

In real estate appraising, Market Value (as opposed to Fair 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? (See list of FAQ's)

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 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.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. 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 stated otherwise, the home owner can do whatever they want with the appraisal.

Are some home improvements more worthwhile than others? (See list of FAQ's)

This really depends on where the home is. 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 are right up there with kitchens, yielding 85%. Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.