Lenco Appraisals has answers to "Frequently Asked Questions"


	Lenco Appraisals is willing to handle any inquiries you might have about appraisals in Westerville and Delaware County. Contact Lenco Appraisals today to talk about how we can help you with your valuation problems.

What is an appraisal?
What does an appraiser do?
What would cause me to request your services?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
Once the assignment is done, 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 Lenco Appraisals get the information used to estimate values in Delaware 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?
How does an appraiser define "Market Value"?
Who actually owns the appraisal report?
Which home renovations add the most to the price?

What is an appraisal? (See list of FAQ's)

An appraisal report is an investigation allowing the appraiser to come to an opinion of value. This opinion or estimate is figured through a formal process that generally utilizes the three main "common approaches to value". The Cost Approach is one of the approaches that real estate appraisers use to find value; it involves concluding what the improvements would cost less physical deterioration, adding the land value. The Sales Comparison Approach involves searching for similar homes nearby and discovering the value based on comparing those homes to the house in question. Usually, the Sales Comparison Approach is the most accurate indicator of market value of 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 income a property produce.

What does an appraiser do? (See list of FAQ's)

An appraiser produces a fair and credible opinion of market value, often in the context of a real estate sale. Appraisers summarize their expert investigation in appraisal reports.

What would cause me to request your services? (See list of FAQ's)

There are many reasons to obtain an appraisal from Lenco Appraisals with the usual reason being real estate and mortgage transactions. Other reasons for getting an appraisal report include:

To get a loan.
If you would like to reduce your property tax burden.
To help a homeowner realize if they owe less than 80% of their home's value and remove insurance.
To challenge high property taxes.
If you need to settle an estate.
To give you a negotiating tool when purchasing real estate.
To figure out a reasonable sales 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 be involved in a lawsuit - an appraisal will help.

If you need more information regarding the appraisal process, please click here.

How is an appraiser different than a home inspector? (See list of FAQ's)

Home inspectors do not generate an opinion of value and do not use the same forms as appraisers. The point of a home inspection is to investigate the structure of the property from foundation to top. For the most part, a home inspection report will discuss the amenities and the necessities of the property: air conditioning (weather permitting), electrical systems, 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.

Is an appraisal the same as a comparative market analysis(CMA)? (See list of FAQ's)

Simply, they share nothing in common. The CMA uses market trends to create most of their business. The appraisal depends on specific verifiable comparable sales. The appraisal report will also include neighborhood and building costs. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

The credentials of the person behind the report is hands down the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to accept a flat fee for assignments, regardless of their value conclusion.

What does the appraisal report contain? (See list of FAQ's)

The main point of an appraisal document is to provide a value opinion, and depending on the scope of the report, you'll usually see the following:

Who engaged the appraiser and other intended users.
How the appraisal is supposed to be used.
The reason for the appraisal.
The type of value contained and a definition of the value reported.
The effective date of the appraiser's opinions and conclusions.(Sometimes this is in the past or maybe the future for new construction!)
Relevant property attributes, including: location, physical characteristics, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible considerations.
All 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 job.

For a more in depth look at what goes into an appraisal report click here: Sample Appraisal Report

Once the assignment is done, how can I have assurance that the value conclusion is veritable? (See list of FAQ's)

In communicating an appraisal report, each appraiser must make sure of the following:

The appraisal contained analysis of the information.

Whether individually or collectively, there were no crucial errors contained in the appraisal, nor any relevant details left out.

That appraisal services were not carried out in a careless or negligent manner.

The final appraisal report was transparent, credible and conclusive.

There are rigorous classroom and real world experience requirements that must be adhered to in order to achieve the status of "licensed appraiser" in Ohio. Plus, appraisers must abide by a strict industry code of ethics and respect national standards of practice for real estate appraisal. The rules for developing an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's) Licensing and certification requires coursework, tests and experience working under a supervisor. Once an appraiser is licensed, he/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? (See list of FAQ's)

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

Where does Lenco Appraisals get the information used to estimate values in Delaware County or other areas? (See list of FAQ's)

One of the primary tasks an appraiser must accomplish is to collect data. Data can be categorized as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.

General data is received from a numerous places. To look up recent sales to be used as "comps", we typically go to the local Multiple Listing Service. To verify actual sales prices, we look at items in the assessor's office and other public documents that are usually online nowadays. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood product.

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.

Why should I hire a licensed appraiser? (See list of FAQ's)

An appraisal is a worthwhile anytime your home's value is pertinent to some financial decision. For those selling a home, you'll want to determine 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. For those settling an estate or divorce, an appraisal from Lenco Appraisals is the best documentation to ensure assets are divided evenly. Simply put, a home is often the single, largest financial asset anybody owns. Knowing its true value means you can make smart financial decisions.

My mortgage statement has an item on it for PMI? Can I get rid of that? (See list of FAQ's)

PMI stands for Private Mortgage Insurance. This additional policy protects the lender in case a borrower defaults on the loan and the value of the house is lower than what the borrower still owes 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.


	The amount you keep from dropping the PMI required when you got your mortgage pays for the appraisal in a matter of months. Lenco Appraisals has years of experience with real estate value trends in Westerville and Delaware County. Contact us today.

How do I get ready for the appraiser? (See list of FAQ's)

We begin with an inspection of the home. 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 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. On the inside, 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:

Any records on the purchase of the property for the last three years.
A list of any personal property that will be left behind and sold with the home, such as a oven, or a washer and dryer, if applicable.
Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
A list of "suggested" improvements when the property is being appraised "as complete".

How does an appraiser define "Market Value"? (See list of FAQ's)

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? (See list of FAQ's)

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 entitled to a copy of the appraisal - it's usually bundled with all the other closing documents - but is not entitled 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 define 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? (See list of FAQ's)

This really depends on where the home is. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

No matter where you go, however, renovating a kitchen is almost always a safe move. 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%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.