TRA-Times Realty Appraisals, Inc. has answers to "Frequently Asked Questions"

TRA-Times Realty Appraisals, Inc. is prepared to reply to any inquiries you might have about appraisals or real estate in Delaware County. Contact TRA-Times Realty Appraisals, Inc. today to talk about how we can help you with your specific valuation problems.

Define the term "Appraisal"
What does an appraiser do?
What are the reasons I would need your services?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
Once the report is done, how can I have confidence that the final number is accurate?
What are the requirements to be a certified appraiser?
Who hires TRA-Times Realty Appraisals, Inc.
Where does TRA-Times Realty Appraisals, Inc. get the data used to estimate values in Delaware County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
Define "Market Value"
Who actually owns the appraisal report?
Are some home improvements more worthwhile than others?



Define the term "Appraisal"   (Top)

The procedure of producing an appraisal consists of an estimation which leads to an opinion of value. This opinion or estimate is arrived at by using a formal process that commonly uses the three main "common approaches to value". The Cost Approach is one of the processes that appraisers use to find the value of a house; it involves figuring what the improvements would cost without physical deterioration, adding the land value. The Sales Comparison Approach involves finding similar houses in close proximity and discerning value based on making a comparison of those homes to the house being appraised. Being the most common approach, the Sales Comparison Approach tends to be the most precise and best indicator of market value for a home. The Income Approach is mainly used for determining the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.

What does an appraiser do?   (Top)

An appraiser generates a fair and credible assessment of market value, in the support of real estate exchanges. Appraisers show their conclusions in appraisal reports.


What are the reasons I would need your services?   (Top)

There are a lot of reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for purchasing an appraisal report include:
  • If you are applying for a loan.
  • To lower your property taxes.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove insurance.
  • To challenge inflated property taxes.
  • To handle an estate.
  • To offer you a leg-up when purchasing real estate.
  • To figure out an honest sales price when putting your home on the market.
  • 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 home.
  • It's possible you could be involved in a lawsuit - an appraisal will help.
If you need a more detailed explanation of the appraisal process, please click here.


How is an appraisal different than a home inspection?   (Top)

The appraiser is not a home inspector nor does he/she do a full home inspection. An inspection is a third-party investigation of the accessible structure and appliances of a property, from the roof to the foundation. The stereotypical home inspector's report will contain an evaluation of the condition 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.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (Top)

To be blunt, it's apples and oranges. The CMA uses market trends to generate most of their business. The appraisal is reliant on specific verifiable comparable sales. In addition, the appraisal verifies other factors like condition, neighborhood and construction costs. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

The credentials of the person behind the report is frankly the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. A certified, Pennsylvania licensed professional who made their livelihood on valuing properties in and around Delaware County is behind the appraisal. Further, the appraiser is an unbiased voice, with no vested interest in the property's value, unlike the real estate agent, who gets a commission based upon the value of the home.

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

The main point of an appraisal report is to provide a value opinion, and depending on the scope of the report, one will customarily see the following:
  • The client and whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The purpose of the assignment.
  • The type of value reported and a definition of the value reported.
  • The effective date of the appraisal.
  • Pertinent property characteristics, including: location, physical characteristics, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, trade fixtures 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 included in the activity of completing the assignment.
For a more in depth look at all that goes into an appraisal report click here: Sample Appraisal Report

Once the report is done, how can I have confidence that the final number is accurate?   (Top)

In the documentation of an appraisal, each appraiser must make sure of the following:
  • The appraisal contained analysis of the data.

  • Whether individually or collectively, there were no critical errors contained in the appraisal, nor any material details left out.

  • That appraisal services were delivered in a careful and judicious fashion.

  • The final appraisal report was easy to explain, legitimate and conclusive.
To become a state licensed appraiser, we must satisfy intense education and experience requirements that enable us to produce an unbiased opinion. Likewise, appraisers must stick to a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for working up an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Top) Licensing and certification takes coursework, tests and experience working under a supervisor. Once licensed, he/she must then engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who hires TRA-Times Realty Appraisals, Inc.   (Top)

Commonly, appraisers are called upon by mortgage lenders to render a value opinion on real estate involved in a loan transaction - to make sure the house is truly adequate collateral for the loan. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does TRA-Times Realty Appraisals, Inc. get the data used to estimate values in Delaware County or other areas?   (Top)

Gathering data is one of the primary things an appraiser performs. Data can be split into Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.

General data is received from a many sources. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. Tax records and other courthouse 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 doing assignments for other properties in the same market.

Why should I hire a licensed appraiser?   (Top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. If you're selling your home, an appraisal will help you determine the most appropriate price. When buying, you can avoid overpaying by getting an independent appraisal. For parties settling an estate or divorce, an appraisal from TRA-Times Realty Appraisals, Inc. is the best documentation to ensure assets are split up properly. A home 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?   (Top)

PMI is an acronym for Private Mortgage Insurance. PMI protects the lender if a borrower defaults on the loan and the value of the property is less than the balance of 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.

The amount you keep from cancelling the PMI required when you got your mortgage pays for the appraisal in a matter of months. Nobody is more qualified than TRA-Times Realty Appraisals, Inc. when it comes to analyzing real estate appreciation in Villanova and Delaware County. Contact us today.

How do I get ready for the appraiser?   (Top)

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 status of its amenities. On the home's interior, pick up any clutter and make sure we can access things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of outside walls.

You can make the inspection go faster and improve the quality of the appraisal report by having the following things on hand:
  • Records on the latest purchase of the property in the last three years.
  • Written property agreements, such as a maintenance easement for a shared driveway.
  • Title policy that lists encroachments or easements.
  • A list of any major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
  • Locate copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.

Define "Market Value"   (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."

Who actually owns the appraisal report?   (Top)

For mortgage transactions, the lender requests the appraisal, either directly or through a third party. 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 certainly 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.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these situations, the appraiser may state the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.

Are some home improvements more worthwhile than others?   (Top)

The answer to this is different depending upon the location of the home. 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 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 weren't far behind, yielding 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.