BenchMark Appraisals LLC has answers to "Frequently Asked Questions"

BenchMark Appraisals LLC is always willing to address any inquiries you might have about appraisals or real estate in Wood County. Feel free to contact us today.

Define the term "Appraisal"
What does an appraiser do?
What are the reasons a person would need services from BenchMark Appraisals LLC?
Is an appraisal the same as 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 report, what guarantee is there that the value conclusion is trustworthy?
How difficult is it to become certified?
Who engages the services of appraisers?
Where does BenchMark Appraisals LLC get the information used to estimate values in Wood 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?
What does "Market Value" mean?
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?



Define the term "Appraisal"   (Top)

An appraisal is a thought process allowing the appraiser to come to an opinion of value. There are three "common approaches to value" which assists the real estate appraiser arrive at this opinion or valuation. One of the three is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, then adding the land value. Another of the processes is the Sales Comparison Approach - which deals with making a comparable analysis to other similar properties within a close proximity which have recently sold. The Sales Comparison Approach is normally the most accurate and best indicator of value for a residence. One of the least common approaches in appraising homes is the Income Approach, which is generally used to determine the market value of a property based on what an investor would pay based on the capital produced by the property.

What does an appraiser do?   (Top)

An appraiser offers a fair and credible determination of market value, to be used in making real estate transactions. Appraisers illustate their conclusions in appraisal reports.


What are the reasons a person would need services from BenchMark Appraisals LLC?   (Top)

There are a lot of reasons to get an appraisal from BenchMark Appraisals LLC with the most common reason being real estate and mortgage transactions. Some other reasons for ordering an appraisal report include:
  • To obtain a loan.
  • To lower your property taxes.
  • To show a homeowner has 30% equity and remove PMI.
  • To challenge improperly assessed property taxes.
  • To handle an estate.
  • To give you a negotiating tool when purchasing a home.
  • To determine the most probable sales price when listing your home.
  • 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 house.
  • It's possible you could be involved in a lawsuit - an appraisal will definitely help.
If you need more information regarding the appraisal process, please click here.


Is an appraisal the same as a home inspection?   (Top)

The appraiser is not a home inspector nor does he/she do a comprehensive home inspection. An inspection is a third-party evaluation of the livable structure and systems of a property, from the roof to the bottom. The archetypal house 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 visible 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)

Frankly, it's like comparing opera to country. What the CMA depends on are ill-defined trends. The appraisal depends on similar proven comparable sales. Location and building values are also important in an appraisal. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

Who's behind the report is actually the biggest difference between a CMA and an appraisal. 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. Moreover, the appraiser is an unbiased voice, with no conditional interest in the property's value, unlike the agent, whose income is tied to the value of the home.

What does the appraisal report contain?   (Top)

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 other intended users.
  • The intended use of the report.
  • The appraisal's purpose.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraisal.
  • Relevant property attributes, including: location, physical description, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the appraisal, 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.
  • The scope of work considered when completing the assignment.
For a more in depth view of all that goes into an appraisal report click here: Sample Appraisal Report


Upon completion of the report, what guarantee is there that the value conclusion is trustworthy?   (Top)

In communicating an appraisal report, each appraiser must make sure of the following:
  • The appraisal used an appropriate analysis of the information.
  • That substantial errors of omission or commission were not committed individually or collectively.
  • That appraisal services were not carried out in a careless or negligent manner.
  • That a believable, supportable appraisal report was communicated.
To become a state licensed appraiser, there are education requirements as well as experience that must be attained - all with the objective of gaining the skills required to render unbiased value opinions. Plus, appraisers must obey a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for developing an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Top)

Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. In general, licensing and certification is most often associated with many hours of classroom study, tests and practical experience. Once licensed, he or she is required to engage in continuing education courses in order to keep the license up to date. To see the specific requirements for any state
click here.

Who engages the services of appraisers?   (Top)

Mortgage lenders are an appraiser's typical client, needing their services to ensure property involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does BenchMark Appraisals LLC get the information used to estimate values in Wood County or other areas?   (Top)

One of the main tasks an appraiser must accomplish is to collect property data. Data can be described as either Specific or General. Specific data is taken 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 many sources. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. Tax records and other public documents reveal actual sales prices in a market. Appraisers often need to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And last but not least, the appraiser assembles general data from his or her past experience in doing assignments for other properties in the same market.


How can a licensed appraiser help me?   (Top)

If you're involved in some sort of financial decision and the value of your home is relevant, you'll want to hire a licensed appraiser. If you're selling your home, an appraisal will help you determine the most appropriate price. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from BenchMark Appraisals LLC is the best documentation to ensure assets are split up evenly. Simply put, 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?   (Top)

PMI stands for Private Mortgage Insurance. It protects the lender if a borrower defaults on the loan and the value of the home is less than what is owed on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

Did you secure your mortgage with less than 20% down? Call BenchMark Appraisals LLC today at 304-485-5832 to see if you can save money by removing your Private Mortgage Insurance payment.

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

We begin with an inspection of the home. 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 amenities. Inside, make sure it is clutter free and that we can get to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of outside walls.

To help expedite our work plus ensure a more accurate report, attempt if possible to have the following items:
  • A plot plan or survey of the house and land (if readily available).
  • Information on any written private agreements, such as a shared driveway with a neighbor.
  • Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

What does "Market Value" mean?   (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 has rights to the appraisal report?   (Top)

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 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.

This rule doesn't apply when a home owner hires an appraiser directly. In these situations, the appraiser may stipulate how the appraisal can be used; 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 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.

As a rule, the most value returned 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 are right up there with kitchens, 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 overbuilt for your neighborhood in terms of size.