"Questions are the creative acts of intelligence."
- Dr. Frank Kingdon -

Who? There are over 80,000 licensed and certified appraisers in the United States. An appraiser is a licensed professional who provides appraisal services for a fee.

Congress mandated that the Appraisal Foundation, a nonprofit organization develop and oversee educational requirements and a code of ethics known as (USPAP) Uniform Standards of Professional Appraisal Practice. All states require that real estate appraisers who are licensed and/or certified comply with that set of standards. Appraisers also undergo an extensive training period, where they must pass a test, complete basic education requirements and adhere to continuing education guidelines. The majority of States also require that an appraiser "apprentice" under an experienced appraiser for a certain number of hours before performing appraisals on their own. Licensing and certification is done at the state level, but must be based on national standards.

What? In non-technical terms, an appraisal is an objective, supported opinion of the value of an adequately described parcel of property, made by a person who has sufficient knowledge and experience to accurately estimate its value. Appraisers use recent closed sales, rental information and current listing data, plus information about the property being appraised (the subject property), its neighborhood, community, and region, and the local and national economy, to support their value estimates. Each report may include comparable sales, cost approach or income formulas and the qualifications of the appraiser.

How? It will take about 20 minutes inside your home. There is a lot of research that goes into an appraisal report that is done both before and after the inspection. Some of the tasks might include a thorough research of public records in order obtain items such as a plat map, and flood data. Research of zoning is verified and a review of the most recent sales and listings of similar homes in your area.

When inspecting your home, the appraiser will measure the outside dimensions, walk the exterior and inside of your home, making notes of improvements and physical characteristics. After inspecting your home, the appraiser may take photos of comparable homes that have sold in your area. The details of those sales are then verified by contacting the Real Estate agents that participated in these transactions. Once the appraiser has collected and verified all of the information needed, the value of your home can be determined.

When? In most cases, the report is electronically sent to the lender 48 hours after inspecting the home. You are entitled to a copy of the report, and should receive it with your closing documents. Each report is tailored to address the individual characteristics that apply to a specific property; it also incorporates specific details that apply to your mortgage needs. The lender retains the right to use the report or any information contained in it. An appraisal lets the lender know the value of the property at the time of the inspection.

An appraisal is an estimate of what amount of money your home may sell for. It is very different from a home inspection which will warn you against anything in the new home that should be fixed. A home inspection must be conducted by a qualified home inspector.

Why? There are many reasons why you may need a real estate appraisal. The most common purpose for an appraisal is to obtain a mortgage on a home. Most lenders are required by federal and state laws, as well as current banking regulations, to obtain an appraisal in conjunction with most loans secured by real estate (mortgages) given by the lender. Other common reason for real estate appraisals include appraisals made for insurance purposes, estate valuations, property tax assessments, for buyers, sellers, and relocation companies. This list is not complete, but it gives you an idea of why over five million real estate appraisals are made each year! Financial Institutions Reform, Recovery and Enforcement Act of 1989 (FIRREA) requires that appraisals of property involved in federally related transactions be made by a licensed or certified appraiser. Some states require that all real estate appraisals be made by licensed or certified appraisers.


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