Appraisal Preparation:

For homeowners, a real estate sale may be contingent based upon an appraisal. If the home will be financed an appraisal will be a requirement of the transaction and often times cash purchasers wish to have an independent appraisal completed to verify they are not overpaying for a home. The most common Real Estate transaction involves a buyer, seller, real estate agent and mortgage lender.

Hiring the appraiser:

What questions should be asked of a potential appraiser?
Are you certified, licensed or a trainee in the states you practice? How long have you been in practice in this specific area? What level of experience do you have with this property type - have you appraised a property of a similar type before? Like any job you are contracting out, it pays to compare the resumes of appraisers whom you are considering. There are 2 levels of residential licensing in the state of Virginia. Licensed Residential which allows the appraiser to appraiser any non-complex residential property valued at less than 1,000,000. Certified Residential allows the appraiser to appraiser any residential property and non–complex commercial properties limited in value. Appraiser trainees are individuals doing full time on the job training in hopes to complete the required number of trainee or supervised hours to allow themselves to become licensed by the state.

What appraisal approaches will you use in appraising my property?
The three most commonly accepted valuation approaches to value are the the sales comparison approach, the cost approach and the income approach. The sales comparison approach compares the property to others and adjusts for differences. The cost approach combines the value of the land and depreciated site improvements with the depreciated value of the building. The income approach takes market rents, subtracts a vacancy allowance and expenses, and takes the resulting net income and turns that into value using a factor. We are not required to provide all three approaches and it is rare that all three are done. Appraisal theory has discredited the relevance of the cost approach and income approach as being extremely reflective of residential market value, thus residential appraisers seldom provide it. The sales comparison approach is the primary valuation method used for residential properties. Often times several or all approaches may be utilized despite not being reflective of the market , however it is given little or no weight in deciding on the final value conclusion.

If I don't like the appraised value, what can I do about it?
That depends upon many things. The best place to start is to speak with the appraiser(s) who signed the report. It's possible that he/she may have overlooked one or more important factors which affect the value of your property; if you mention it in your conversation, you may find the appraiser willing to reconsider the value conclusion. Of course, if you are not their client (such as when your bank orders the appraisal), they are not required to speak about the appraisal and may be in violation of the licensing law or professional standards if they do so. It's important to remember that the appraiser is an unbiased third party. Our job is to find out the good and the bad about a property and report it, not to favor a direction. All appraisals are reviewed by staff and carefully scrutinized before they are released. If you are still dissatisfied, you can get a second opinion by hiring another appraiser or insist that a review appraisal be performed on the original report. If there is a large discrepancy in value or reporting of a feature, you or a third party may be able to remediate the problem.

Should I hire a lawyer for a tax appeal?
That's up to you, but commercial property owners almost always have an attorney or tax consultant. Lawyers are especially helpful in commercial tax court. Residentially speaking, a person typically represents themselves while providing a copy of a recent appraisal or with an appraiser standing by to attest to the appraised value. We cannot represent a property owner; we can only be an expert witness for your case.

How much do your appraisals cost?
Every appraisal is different, so we quote fees individually on a per job basis. Generally, prices depend on the number of properties and the complexity of the assignment, though appraisals used as evidence in court cases command a higher price. Our fees are calculated based on the number of hours it takes to do a report and the fee structure of the time involved.

Why do complex properties cost more?
Complex properties require us to research a wider radius, sometimes multiple counties for common features! Fees are based on time estimates, so the more time we have to invest in finding comparable properties, the higher the fee. Also, the market analysis section of the report many times requires a greater amount of research time to properly show or address the dynamics affecting the property type.

If you don't come up with the value I want, do I have to pay for the appraisal?
Appraisers must maintain a third party position to your transaction. No appraiser can accept an assignment where bias could be interpreted. USPAP has a phrase used verbatim by many appraisal firms on their letters of transmittals:

"Our assignment was not based on the reporting of a predetermined value, a direction in value that favors the cause of the client, the amount of the value opinion, the attainment of a stipulated result or the occurrence of a subsequent event directly related to the value opinion."
USPAP is very clear on this issue. Appraisers cannot be advocates for any client. Although it may seem unusual to some users to have to pay for a report that did not provide them a favorable outcome, appraisers governed by appraisal licensing laws must remain objective.

Why are the fees for commercial appraisals so much higher than residential appraisals?
There are many reasons why there is such a great discrepancy. The most important difference is the amount of time it takes to prepare each type of report. Most skilled residential appraisers can do a residential report in 5-8 hours whereas a skilled commercial appraiser needs at least a week. Residential reports are on a common form with a standardized property type whereas commercial appraisals are mainly free-form documents with information that varies with the property type, market and client needs. Special use commercial properties take longer and can have a multi-state data search radius, thus making it more time intensive and costly to perform than more common property types such as office and apartments.

Can I reuse your appraisal for another purpose?
Only if you receive our permission. Be aware that many financial institutions will not accept an appraisal performed for one of their competitors unless the first source provides a written release. Also, we are not required to testify in an assessment reduction case if the appraisal was done for something other than a tax appeal. When ordering, please provide a list of all users of the report. We cannot change a client's name in a cover letter.

I want to use your appraisal for financing, but don't have a source. Can you prepare your appraisal for any lender?
We can provide some guidance, but you should make sure your lender will accept our report before ordering. Lenders can have different internal guidelines, so knowing what is required helps prevent the additional time it takes to modify a report or do additional report analyses, increasing the time it takes to get a final product to the lender.

I paid my lender for the appraisal, therefore I should own it.
The appraisal is legally owned by the client, unless the lender "releases its interest" in the document, typically in writing to us. If the lender ordered it, they own it. If you just want a copy of the appraisal, under the Equal Credit Opportunity Act you can be given a copy of it upon written request of the lender.

If I didn't order the appraisal, can I find out the appraised value?
Only if you ask the person who originated the order and they provide permission in writing. However, the appraiser cannot give you this information because it would violate the ethical standards governing our appraisal practice.

It doesn't make sense to me to hire you if I don't know you'll come up with the value I need. Can you give me a guarantee?
It is a violation of state laws and the appraisal licensing laws of the Appraisal Institute to provide a value opinion without doing an appraisal. Although we cannot provide a guarantee, we can perform a restricted appraisal that will tell you what the property is worth. If the value opinion is acceptable, we can upgrade the report to a summary or self-contained format for a higher fee. We can quote both fees to you so you'll know the best and worst case costs. Surprisingly, the fees are not that different since all the valuation work is done regardless of what report format is prepared.

What type of report do I need?
The appraiser is in the best position to tell you what type of report you need. He/she is required by USPAP to determine the scope of the assignment, the function of the appraisal and use of the report. To do that, he/she will need to understand your needs, so the appraiser is in the best position to recommend one or more of the above choices and to counsel you on what choice(s) would be inappropriate.
The appraised value of the property depends upon whether the appraisal is conducted for the buyer, seller or lender.

The appraiser has no vested interest in the outcome of the appraisal and should render services with independence objectivity and impartiality - no matter for whom the appraisal is conducted. I paid for the appraisal. Why am I not entitled to get a copy?
The client is the person who engages the services of the appraiser, usually in the form of an engagement letter. Many times the lender is the one who issues and/or signs an engagement letter, making them the client. It does not matter who pays the bill. Only the client and those who he has specifically authorized are allowed to receive a copy of the report from the appraiser. If the person who pays the bill is not the client, verbal or written permission is required for the appraiser to release the appraisal to anyone else.

Preparing for the Appraisers arrival:
Before an Appraiser arrives, there are a few things you should know to help facilitate the appraisal process. It's beneficial to have these documents ready for the appraiser:
• A plot plan or survey of the house and land (if readily available)
• Written property agreements, such as a maintenance agreement for a shared driveway
• List of personal property to be sold with the home
• Title policy that describes encroachments or easements
• Most recent real estate tax bill and or legal description of the property
• Home inspection reports or other related recent reports.
• Brag sheet that lists major home improvements and upgrades, the date of their installation and their cost (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available)
• A copy of the Purchase Agreement if a sale is "pending" if available.
• "Homeowners Associations" or Condo information and fees.
• A list of "Proposed" improvements if being appraised "Per Completion”.

Upon Arrival of the Appraiser:
Once the appraiser has arrived, you do not need to accompany the appraiser along on the entire site inspection, but may. You should be available to answer questions about your property and be willing to point out any home improvements as the inspection is occurring. Here are some other suggestions:

Accessibility Make sure that all areas of the home are accessible, especially to the attic and crawl space
Housekeeping Appraisers see hundreds of homes a year and will look past most clutter, but they're human beings too! A good impression can translate into a higher home value
Maintenance Repair minor things like leaky faucets, missing door handles and trim
FHA/VA Inspection Items  


If your borrower is applying for an FHA/VA loan, be sure to ask your appraiser if there are specific things that should be done before they come. Some items they may recommend might be: Install smoke detectors on all levels (especially near bedrooms); install handrails on all stairways; remove peeling paint and repaint the effected area; provide inspection access to the attic and crawl space