Michael E. Keller & Associates, Inc. has answers to "Frequently Asked Questions"


	Michael E. Keller & Associates, Inc. is more than happy to reply to any concerns you might have about appraisals or real estate in Clovis and Fresno County. Don't hesitate to contact us today.

Describe an appraisal
Describe what an appraiser does
Why would a person request services from Michael E. Keller & Associates, Inc.?
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?
After completing the report, what assurance is there that the value indicated is veritable?
What goes into an appraiser's certification?
Who do appraisers work for?
Where does Michael E. Keller & Associates, Inc. get the data used to estimate values in Fresno County or other areas?
What can a full appraisal do for 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"?
Does the appraisal belong to the bank or the consumer?
I want to get more for my house. Where should I spend money renovating?

Describe an appraisal (Return to top)

An appraisal report is an inspection leading to an opinion of value. The appraiser must use a few "approaches," typically three, to conclude the estimation of market value. One of the processes in use is the Cost Approach, which is what it would cost to restore the improvements to the house, less the depreciation and physical deterioration, plus the land value. Easily the most common approach in finding the likely sales price of a house is the Sales Comparison Approach which deals with figuring a comparison to similar houses nearby. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a house. The Income Approach is mainly used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.

Describe what an appraiser does (Return to top)

An appraiser provides a professional, unbiased opinion of market value, in the support of real property transactions. Appraisers exhibit their findings in appraisal reports.

Why would a person request services from Michael E. Keller & Associates, Inc.? (Return to top)

There are a lot of reasons to purchase an appraisal with the most common reason being real estate and mortgage transactions. Some other reasons for getting an appraisal report include:

If you are applying for a loan.
To lower your property taxes.
To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
To fight improperly assessed property taxes.
To handle an estate.
To provide you a leg-up when purchasing real estate.
To figure out an honest sales price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Because a government agency such as the IRS requires it.
It's possible you could have to deal with being in a lawsuit - an appraisal will help.

For a more detailed description of the appraisal process click here.

What is the difference between an appraisal and a home inspection? (Return to top)

Home inspectors do not produce an opinion of value and are not appraisers. An inspection is a third-party investigation of the available structure and systems of a house, from the top to the bottom. The standard home inspector's report will include an evaluation of the integrity of the house'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.

My agent performed a CMA for me. Is that the same as an appraisal? (Return to top)

To be honest, they have nothing in common. The CMA relies on vague trends in the market. The appraisal is reliant on similar verifiable comparable sales. The appraisal report will also contain area and construction prices. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the biggest difference is the person doing 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. A certified, California licensed professional who made a career on valuing homes in and around Fresno County is behind the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to accept a previously agreed upon fee for work they perform, regardless of their value conclusion.

What can I expect to see in my appraisal report? (Return to top)

The main purpose of an appraisal document is to give a value opinion, 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.
The intended use of the appraisal.
The purpose of the appraisal.
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!)
Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic factors, the property rights valued, and non-real estate items included in the appraisal, such as personal property, trade fixtures 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.
What was included in the process of completing the appraisal.

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

After completing the report, what assurance is there that the value indicated is veritable? (Return to top)

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

That the information analysis contained in the appraisal was appropriate.

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

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

That a believable, substantiated appraisal report was communicated.

To become a state licensed appraiser, we must satisfy intense education and experience requirements that train us to produce an unbiased opinion. Plus, appraisers must abide by a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for working up an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Return to top) Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. In general, licensing and certification is commonly associated with many hours of coursework, tests and practical experience. Once licensed, he/she is required to engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who do appraisers work for? (Return to top)

Typically, appraisers are employed by lenders to estimate the value of real estate involved in a loan transaction. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does Michael E. Keller & Associates, Inc. get the data used to estimate values in Fresno County or other areas? (Return to top)

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

General data is received from a variety of places. To find out about recently sold homes to be used as "comps", we typically use the local Multiple Listing Service. To double-check actual sales prices, we look at tax records and other public documents that are usually online nowadays. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood service.

And last but not least, the appraiser assimilates general data from his or her collective knowledge gained from doing assignments for other houses in the same market.

What can a full appraisal do for me? (Return to top)

An appraisal is a worthwhile whenever the value of your home is relevant to some financial decision. For those selling a home, you'll want to determine the price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. When buying, be sure you're not overpaying by getting an independent appraisal. For those settling an estate or divorce, an appraisal from Michael E. Keller & Associates, Inc. is the best way to ensure assets are divided evenly. Simply put, a home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

What exactly is PMI and how can I get rid of it? (Return to top)

PMI is short for for Private Mortgage Insurance. PMI guards the lender in case a borrower doesn't pay on the loan and the market price of the property is less than the loan balance. 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 home value appreciated since you first purchased? Contact Michael E. Keller & Associates, Inc. today at (559) 226-3097. You may be able to get rid of your Private Mortgage Insurance payment.

How do I get ready for the appraiser? (Return to top)

The first step in most appraisals is the home inspection. During this process, the appraiser will come to your home and measure it, determine the layout of the rooms inside, confirm all aspects of the home's general condition, and take several photos of your house for inclusion in the report. Inside, make sure it is clutter free and that we can get to things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of outside walls.

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).
List of personal property to be sold with the home.
Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
A list of any major home improvements and enhancements, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
A list of "suggested" improvements when the property is being appraised "as complete".

How does an appraiser define "Market Value"? (Return to top)

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."

Does the appraisal belong to the bank or the consumer? (Return to top)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is certainly 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 state how the appraisal can be used; 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.

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

It really depends on the market. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

No matter where you go, however, renovating a kitchen is almost always a safe move. 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%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.