Blake Appraisal Corp. has answers to "Frequently Asked Questions"


	Blake Appraisal Corp. is eager to address any questions you might have about appraisals or real estate in Berkley and Oakland County. Feel free to contact us today.

Define the term "Appraisal"
What does an appraiser do?
What would cause me to need your services?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Once the appraisal has been completed, what assurance is there that the value indicated is legitimate?
How difficult is it to become certified?
Who engages the services of appraisers?
Where does Blake Appraisal Corp. get the data used to estimate values in Oakland 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 appointment
What does "Market Value" mean?
Who has rights to the appraisal report?
Which home renovations add the most to the price?

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

An appraisal is a thought process leading to an opinion of value. This opinion or estimate is concluded by a formal process that typically uses 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, plus the land value. The Sales Comparison Approach involves finding similar properties nearby and discerning value based on comparing those houses to the home in question. Usually, the Sales Comparison Approach is the most definite indicator of market value of a home. The third approach is the Income Approach, which is of most importance 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 a professional, unbiased opinion of market value, to be used in making real estate transactions. Appraisers demonstrate their expert conclusions in appraisal reports.

What would cause me to need your services? (See list of FAQ's)

There are many reasons to get an appraisal with the most common reason being real estate and mortgage transactions. Some other reasons for ordering an report include:

If you are applying for a loan.
If you would like to lower your property tax burden.
To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
To fight improperly assessed property taxes.
To deal with an estate.
To give you an edge when purchasing a home.
To find a reasonable price when listing your home.
To protect 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 property.
If you ever find yourself in a civil case.

If you need a more detailed explanation of the appraisal process, please click here.

How is an appraiser different than a home inspector? (See list of FAQ's)

Appraisers do not do provide residential property inspections and are not home inspectors. The point of a home inspection is to evaluate the structure of the house from foundation to rooftop. The archetypal house inspector's report will include an evaluation of the integrity of the home'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.

Is an appraisal the same as a comparative market analysis(CMA)? (See list of FAQ's)

Frankly, it's like comparing sugar and saccharin. The CMA uses market trends to conduct most of their business. The appraisal is based on specific valid comparable sales. Location and architectural costs are also precedent in an appraisal. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the biggest difference is who's behind the report. A CMA is written by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Further, the appraiser is an independent party, with no conditional interest in the value of a home, unlike the agent, whose income is tied to the value of the home.

What are the contents of an appraisal report? (See list of FAQ's)

The main point of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, you'll usually see the following:

Who engaged the appraiser and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The reason for the assignment.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraisal.
Relevant property characteristics, including: location, physical characteristics, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible items.
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 while working up the assignment.

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

Once the appraisal has been completed, what assurance is there that the value indicated is legitimate? (See list of FAQ's)

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

The appraisal contained a suitable analysis of the data.

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

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

That a solid, supportable appraisal report was conferred.

To become a state licensed appraiser, there are education requirements as well as on the jobexperience that must be attained - all with the end goal of being able to provide unbiased value opinions. In addition, appraisers must obey a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for developing an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's)

Licensing and certification takes classroom study, tests and real world experience. 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 engages the services of appraisers? (See list of FAQ's)

Mortgage lenders are an appraiser's typical customer, requiring their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does Blake Appraisal Corp. get the data used to estimate values in Oakland County or other areas? (See list of FAQ's)

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

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

And last but not least, the appraiser gathers general data from his or her collective knowledge gained from creating appraisals for other houses 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. For those selling a home, you'll want to figure out a price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. If you're buying, it makes sure you don't overpay. 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. Don't make decisions in the dark with a professional appraisal.

What exactly is PMI and how can I get rid of it? (See list of FAQ's)

PMI is an acronym for Private Mortgage Insurance. It guards the lender in case a borrower defaults on the loan and the market price of the home is less than what is owed on 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.


	Has your real estate appreciated since you first purchased? Contact Blake Appraisal Corp. today at 248-336-9093. You may be able to cancel your Private Mortgage Insurance premium.

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

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 landscaping and relocate any items that would get in our way while we measure the structure. On the inside, make sure we can easily access items like furnaces and water heaters.

To help speed things along plus ensure a more accurate report, attempt if possible to have the following items:

Information on the latest purchase of the property in the last three years.
Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
A list of "proposed" improvements when the property is being appraised "as complete".

What does "Market Value" mean? (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."

Who has rights to the appraisal report? (See list of FAQ's)

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

The exception to this rule is when a home owner hires an appraiser directly. 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 do whatever they want with the appraisal.

Which home renovations add the most to the price? (See list of FAQ's)

This really depends on where the home is. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

As a rule, the most value returned from renovating a home comes in the kitchen. 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 were second, 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 atypical for your neighborhood in terms of size.