J DeMars Real Estate Appraisal has answers to "Frequently Asked Questions"


	J DeMars Real Estate Appraisal is always prepared to answer any inquiries you might have about appraisals or real estate in Essex County. Feel free to contact us today.

What is an appraisal?
Describe what an appraiser does
Why would someone require a real estate appraisal?
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?
Upon completion of the appraisal, how can I have assurance that the value conclusion is legitimate?
What goes into an appraiser's certification?
Who are an appraiser's customers?
Where does J DeMars Real Estate Appraisal get the data used to estimate values in Essex County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
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? (Go to list of questions)

The appraisal process is an estimation that generates an opinion of value. This opinion or estimate is discerned by using a formal process that usually utilizes the three main "common approaches to value". One of the methods in use is the Cost Approach, which is what it would cost to restore the improvements to the home, minus age 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 making a comparison to comparable homes close by. Being the most commonly used approach, the Sales Comparison Approach is generally the most accurate and best indicator of market value for a property. One of the least common approaches in appraising homes is the Income Approach, which is generally used to find 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 produces a professional, unbiased assessment of market value, in the support of real property transactions. Appraisers summarize their analysis in appraisal reports.

Why would someone require a real estate appraisal? (Go to list of questions)

There are a lot of reasons to obtain an appraisal from J DeMars Real Estate Appraisal with the usual reason being real estate and mortgage transactions. Other reasons for ordering an report include:

To obtain a loan.
If you would like to reduce your property tax burden.
To build a case for a homeowner's equity and remove PMI.
To fight inflated property taxes.
To settle an estate.
To provide you a negotiating tool when purchasing real estate.
To determine the most probable property value when selling real estate.
To defend 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 home.
It's possible you could have to deal with being in a lawsuit - an appraisal will help.

If you need more information about the appraisal process, please click here.

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

Appraisers do not do provide house inspections and are not home inspectors. A third-party home inspector will evaluate the structure of the property, from the top to the foundation. For the most part, a home inspection report will discuss the amenities and the requirements of the property: 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 visible structures.

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 proven by public record. Also, the appraisal checks other factors like condition, neighborhood and replacement costs. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the most significant factor is the person doing the report. 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 produce by a licensed, certified professional who makes a living 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 accept a flat fee for work they perform, regardless of their value conclusion.

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

The main objective 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:

The client and other intended users.
The intended use of the appraisal.
The appraisal's purpose.
The type of value reported and a definition of the value reported.
The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
Pertinent property characteristics, including: location, physical description, 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 factors.
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 involved 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

Upon completion of the appraisal, how can I have assurance that the value conclusion is legitimate? (Go to list of questions)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:

The appraisal contained an apropos analysis of the data.

Whether individually or collectively, there were no substantial errors contained in the report, nor any relevant details left out.

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

That a believable, substantiated appraisal report was conferred.

There are intense classroom and practical experience requirements that must be adhered to in order to get an appraisal license in New Jersey. Likewise, appraisers must obey a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for developing an appraisal and documenting 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 typically translates to many hours of coursework, tests and experience working under a supervisory appraiser. Once an appraiser is licensed, he or she is required to 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 lenders to render a value opinion on a house involved in a loan transaction. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does J DeMars Real Estate Appraisal get the data used to estimate values in Essex County or other areas? (Go to list of questions)

One of the most important activities of an appraiser is to collect property data. Data can be described as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is received from a numerous sources. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. To verify actual sales prices, we look at items in the assessor's office and other public documents. Appraisers often have to report when a property lies in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And most importantly, the appraiser assimilates 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? (Go to list of questions)

An appraisal is a valuable tool anytime the value of your home is relevant to a financial decision. When selling your home, an appraisal assists you in setting the most appropriate price. 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. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making smart financial decisions.

What exactly is PMI and how can I get rid of it? (Go to list of questions)

PMI is an acronym for Private Mortgage Insurance. PMI protects the lender in case a borrower defaults on the loan and the market price of the house is lower than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	The amount you keep from cancelling your PMI pays for the appraisal in no time. Nobody is more qualified than J DeMars Real Estate Appraisal when it comes to analyzing real estate appreciation in Verona and Essex County. Contact us today.

How do I get ready for the appraiser? (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 landscaping and relocate any items that would get in our way while we measure the structure. Indoors, make sure we can get to appliances 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:

Written property agreements, such as a maintenance easement for a shared driveway.
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 .
A list of any major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
A list of "suggested" improvements if the property is to be appraised "as complete".

How does an appraiser 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."

Who has rights to 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 appraisal - 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 situations, the appraiser may define the purpose of the appraisal; 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.

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

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 are right up there with kitchens, returning 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.