C. Patrick McAllister Associates, Inc. has answers to "Frequently Asked Questions"


	C. Patrick McAllister Associates, Inc. is eager to address any concerns you might have about appraisals or real estate in Ross County. Contact us today to see how we can help you with your valuation problems.

Describe an appraisal
What does an appraiser do?
Why would a person request services from C. Patrick McAllister Associates, Inc.?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What's in an appraisal report?
Once the assignment has been delivered, what assurance is there that the value indicated is trustworthy?
What are the requirements to be a certified appraiser?
Who hires C. Patrick McAllister Associates, Inc.
Where does C. Patrick McAllister Associates, Inc. get the data used to estimate values in Ross County or other areas?
Why should I hire a licensed appraiser?
My mortgage statement has an item on it for PMI? Can I get rid of that?
How do I get ready for the appraiser?
What is "Market Value?"
Who has rights to the appraisal report?
Which home renovations add the most to the price?

Describe an appraisal (Return to top)

The appraisal process is an evaluation that generates an opinion of value. There are three "common approaches to value" which assists the real estate appraiser arrive at this opinion or estimate. One of the methods in use is the Cost Approach, which is what it would cost to replace the improvements to the property, minus depreciation and physical dilapidation, adding the land value. Easily the most common approach in figuring the likely sales price of a home is the Sales Comparison Approach which deals with concluding a comparison to comparable properties nearby. Usually, the Sales Comparison Approach is the most definite indicator of market value of a house. One of the least common approaches in appraising residential properties is the Income Approach, which is mainly used to determine the value of a property based on what an investor would pay based on the capital produced by the property.

What does an appraiser do? (Return to top)

An appraiser offers an unprejudiced and well substantiated assessment of market value, in the support of real property transactions. Appraisers show their findings in appraisal reports.

Why would a person request services from C. Patrick McAllister Associates, Inc.? (Return to top)

There are a lot of reasons to order an appraisal from C. Patrick McAllister Associates, Inc. with the most common reason being real estate and mortgage transactions. A few other reasons for ordering an appraisal include:

To get a loan.
To reduce your property taxes.
To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
To challenge improperly assessed property taxes.
If you need to settle an estate.
To give you an edge when purchasing a home.
To determine a likely 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.
Because a government agency such as the IRS requires it.
It's possible you could be involved in a lawsuit - an appraisal will help.

Click here for a more detailed explanation of the process involved in getting an appraisal.

How is an appraisal different than a home inspection? (Return to top)

Home inspectors do not come to an opinion of value and do not use the same forms as appraisers. A third-party home inspector will evaluate the structure of the house, from the roof to the foundation. The archetypal house inspector's report will contain an evaluation of the integrity of the property'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)? (Return to top)

Simply put, it's like comparing opera to country. What the CMA relies upon are superficial trends. Appraisals use similar sales which are verifiable resources. The appraisal report will also contain location and building prices. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

The person creating 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 be trained in technical valuation concepts or even have a handle on market trends. A certified, Ohio licensed professional who made their livelihood on valuing homes in and around Ross County creates the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a flat sum for work they perform, regardless of their outcome.

What's in an appraisal report? (Return to top)

Every appraisal must indicate a supported value opinion and will identify the following:

Who engaged the appraiser and other intended users.
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 appraiser's opinions and conclusions.
Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic factors, the property rights in question, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible factors.
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.
The scope of work used to complete the assignment.

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

Once the assignment has been delivered, what assurance is there that the value indicated is trustworthy? (Return to top)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:

That the information analysis utilized in the appraisal was proper.

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

That appraisal services were rendered in a careful and judicious fashion.

That a credible, supportable appraisal report was imparted.

There are intense classroom and real world experience requirements that must be satisfied in order to achieve the designation of "licensed appraiser" in Ohio. Likewise, appraisers must stick to a strict industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Return to top) Licensing and certification is achieved through classroom study, tests and real world experience. Once an appraiser is licensed, he/she is required to complete continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who hires C. Patrick McAllister Associates, Inc. (Return to top)

Mortgage lenders are an appraiser's typical client, using their services to ensure property involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does C. Patrick McAllister Associates, Inc. get the data used to estimate values in Ross County or other areas? (Return to top)

One of the most important things an appraiser does is to collect property data. Data can be described as either Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is gathered from a numerous sources. Local Multiple Listing Services (MLS) provide information 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 available from FEMA data outlets, such as a la mode's InterFlood service.

And most importantly, 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? (Return to top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. For those selling a home, you'll want to figure out 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. 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. A house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.

My mortgage statement has an item on it for PMI? Can I get rid of that? (Return to top)

PMI is short for for Private Mortgage Insurance. PMI protects the lender in case a borrower is unable to pay on the loan and the value of the home is less than what is owed on the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.


	Does your monthly mortgage payment include a fee for PMI?Call C. Patrick McAllister Associates, Inc. today at 740 773-3938 or send us an e-mail. Documentation of your home's current value could save you thousands.

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

We begin with an inspection of the property. 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. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any bushes and move any items that would get in our way while we measure the structure. On the inside, make sure the appraiser can easily access appliances like furnaces and water heaters.

To help speed things along as well as ensure a more accurate report, try if possible to have the following items:

A survey or plot map of the property and building (if available).
Title policy that lists encroachments or easements.
Information on "Homeowners Associations" or condominium covenants and fees.
A list of any 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 list of "suggested" improvements when the property is being appraised "as complete".

What is "Market Value?" (Return to 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 has rights to the appraisal report? (Return to 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 entitled to a copy of the report - it's usually included with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner engages an appraiser directly. In these cases, 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 use the appraisal for any purpose.

Which home renovations add the most to the price? (Return to top)

The answer to this is different depending upon the location of the home. 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.

No matter where you go, however, renovating a kitchen is almost always a safe investment. One recent study revealed that putting $20,000 into a kitchen remodel would add about $17,500 to the value of the home - or about an 88% return on investment. Bathrooms weren't far behind, 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.