Wolf Appraisal Service, PLLC has answers to "Frequently Asked Questions"

Wolf Appraisal Service, PLLC is ready to handle any concerns you might have about appraisals or real estate in Maricopa County. Contact us today to learn how we can help you with your specific valuation problems.

Define the term "Appraisal"
What does an appraiser do?
Why would I require 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 are the contents of an appraisal report?
After completing the report, how can I have assurance that the value conclusion is veritable?
What does it mean for an appraiser to be licensed?
Who employs appraisers?
Where does Wolf Appraisal Service, PLLC get the data used to estimate values in Maricopa County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Does the appraiser need anything from the homeowner in advance?
What does "Market Value" mean?
Who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?



Define the term "Appraisal"   (Top)

An appraiser performs an evaluation that leads to an opinion of value. This opinion or estimate is figured through the use of a formal process that typically utilizes three "common approaches to value". One of the methods is the Cost Approach - which is what it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. Another of the methods is the Sales Comparison Approach - which deals with making a comparison to other similar nearby properties which have recently sold. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a home. The third approach is the Income Approach, which is the best method in appraising income producing properties - it involves estimating what an investor would pay based on the income generated by the property.

What does an appraiser do?   (Top)

An appraiser forumlates an objective and well justified opinion of market value, to be used in making real estate transactions. Appraisers illustate their conclusions in appraisal reports.


Why would I require your services?   (Top)

There are many reasons to get an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for purchasing an report include:
  • To get a loan.
  • If you would like to reduce your property tax burden.
  • To demonstrate a homeowner's acquired equity and remove insurance.
  • To challenge improperly assessed property taxes.
  • To deal with an estate.
  • To provide you a leg-up when purchasing a home.
  • To figure out a likely price when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because an official agency such as the IRS requires it.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.
If you need more information about the appraisal process, please click here.


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

Home inspectors do not figure out an opinion of value and do not do appraisal reports. A third-party home inspector will inspect the structure of the property, from the top to the foundation. Generally, a home inspection report will evaluate the amenities and the necessities of the property: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

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

Frankly, they share nothing in common. What the CMA relies upon are ill-defined trends. The appraisal is reliant on specific valid comparable sales. Location and architectural prices are also important in an appraisal. All a CMA does is generate a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the biggest difference is the person doing the report. Real estate agents produce CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, state licensed professional who has formed a career on valuing properties in and around Maricopa County is behind the appraisal. Moreover, the appraiser is an independent voice, with no vested interest in the property's value, unlike the agent, whose income is tied to the value of the home.

What are the contents of an appraisal report?   (Top)

The main objective 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:
  • The client and whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The appraisal's purpose.
  • The type of value contained and a definition of that value.
  • The effective date of the appraisal.
  • Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic factors, the real property interest 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 considerations.
  • Any 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 while working up the appraisal.
For a more in depth look at what goes into an appraisal report click here: Sample Appraisal Report

After completing the report, how can I have assurance that the value conclusion is veritable?   (Top)

In the documentation of an appraisal, each appraiser must ensure the following:
  • That the information analysis implemented in the appraisal was proper.

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

  • That appraisal services were not executed in a careless or negligent manner.

  • The final appraisal report was easy to explain, legitimate and conclusive.
There are intense education and practical experience requirements that must be met in order to get an appraisal license in Arizona. In addition, appraisers must follow a strict industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for carrying out an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Top) Regulations regarding licensing and certification are different from state to state. In general, licensing and certification is most often associated with many hours of coursework, tests and experience working under a supervisory appraiser. Once licensed, he or she is required to complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers?   (Top)

Mortgage lenders are an appraiser's most likely customer, requiring their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does Wolf Appraisal Service, PLLC get the data used to estimate values in Maricopa County or other areas?   (Top)

Compiling information is one of the primary roles of an appraiser. Data can be classified as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is received from a variety of places. Local Multiple Listing Services (MLS) provide data on recently sold homes that might be used as comparables. To double-check actual sales prices, we research items in the assessor's office and other public documents. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood product.

And most importantly, the appraiser assimilates general data from his or her past experience in creating appraisals for other houses in the same market.

What can a full appraisal do for me?   (Top)

An appraisal is a worthwhile anytime the value of your home is pertinent to some financial decision. 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. 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?   (Top)

PMI is the common abbreviation for for Private Mortgage Insurance. This added policy takes care of the lender in the event a borrower defaults on the loan and the market price of the house 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.

The amount you keep from dropping your PMI pays for the appraisal in no time. Nobody is more qualified than Wolf Appraisal Service, PLLC when it comes to analyzing real estate appreciation in Scottsdale and Maricopa County. Contact us today.

Does the appraiser need anything from the homeowner in advance?   (Top)

We begin with an inspection of the property. 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 we have easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and move any items that would get in our way while we measure the structure. Indoors, make sure the appraiser can get to items like furnaces and water heaters.

You can make things go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • Records on the latest purchase of the property in the last three years.
  • List of personal property to be sold with the home.
  • Any documents, 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, your septic system and your well.
  • Information on "Homeowners Associations" or condominium covenants and fees.

What does "Market Value" mean?   (Top)

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 actually owns the appraisal report?   (Top)

In most real estate transactions, the appraisal is ordered by the lender. 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 appraisal - it's usually bundled 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 situations, the appraiser may stipulate 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 use the appraisal for any purpose.

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

A home's location - what city it is in and even what part of that city - is key to this popular question. 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 were second, yielding 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.