WHAT IS THE IMPORTANCE OF A PROFESSIONAL RESIDENTIAL REAL ESTATE APPRAISAL?
The old saying, “Invest in bricks” applies here, because so much wealth - private, public and corporate is in real estate, and the determination of its value by a professional, licensed and experienced real estate appraiser can make all the difference in the world! The real estate appraiser is an objective and impartial third party who is hired for his or her extensive training, continued education, knowledge and experience, and is seriously relied upon by individuals who own, manage, buy, sell, invest in and loan money on the security of real estate.

WHAT QUALIFICATIONS SHOULD I LOOK FOR IN AN APPRAISER?
Pennsylvania requires a four year college degree from an accredited institution, 2,500 hours of experience, a two year apprenticeship and 250 hours of course work.

WHAT’S THE DIFFERENCE BETWEEN AN APPRAISAL VERSUS A WHOLE HOUSE INSPECTION?
The residential real estate appraiser is not a whole house inspector. The appraiser (who is not an architect, engineer, electrician, plumber, HVAC professional, contractor, etc.) walks through the whole house to review the general condition and room count. He or she will inquire about any visible problems and issues, as well as those that may not be visible, and will professionally assess how these issues may impact the value of the house. Any questions about structural or mechanical concerns should be addressed by experts in those fields.

An appraiser will walk through the whole house and document the inside and outside condition of the property, from layout, features, updating and modernization, and the overall quality of construction, materials, etc. This gathering of information helps the appraiser in the property valuation and comparison process. The appraiser estimates the house square footage called GLA, or gross living space, and also “non-living” spaces like a garage or a covered porch which are accounted for, and valued separately. A finished basement is calculated separately and the local market value will be influenced by various factors such as government regulations, updating, quality of materials and finish, etc. Last, the appraiser will consider only permanent fixtures and real property. For example, above-ground swimming pools and storage sheds are not permanent structures, therefore are not included in valuation.

The answer is NO. You and your appraiser (and possible your bank if you have a mortgage related appraisal) have a private, confidentiality agreement, and your information is not shared with any other entity.

Depending upon a professional real estate appraiser’s qualifications and experience, he or she may provide some or all of the following services: Residential and Commercial Appraisals; Counseling and Consulting Evaluations, Expert Witness Testimony, Litigation Preparation; Feasibility Studies; Market Analysis, Market Rent and Trend Studies; Tax Assessment Reviews and Advice or Zoning Testimony.

Under The Equal Credit Opportunity Act, your money lender must provide you with a copy of your Appraisal Report upon your written request. If you’re dissatisfied with any information in your report, you must contact your lender immediately.

A Certified Appraisal is a formal, written, impartial estimate or opinion of value of a professionally and adequately described property, as of a specific date, supported by the presentation and analysis of relevant and documented data. The appraiser accepts full responsibility for this report, and only a retained State Certified Appraiser can provide a Certified Appraisal.

A Comparative Market Analysis or Broker’s Price Opinion, is an informal market value estimate, performed by a real estate agent/broker, and is based on comparable neighborhood sales.

HERE’S THE BIG DIFFERENCE! A Certified Appraiser is a retained, independent with no ulterior motives; he or she is objective and will deliver a fair and accurate appraisal. A real estate agent/broker’s goal in giving an analysis or price opinion is to get the listing and earn a commission.  In Pennsylvania, a broker/agent can only give an opinion of value when attempting to obtain a listing of a house for sale.

The appraisal process is a professional method of reaching an estimate of real estate value. It’s a six-step process which includes: definition of the problem, preliminary survey and appraisal plan, data collection and analysis, application of the three approaches to value*, reconciliations of value indications, and the final estimate of defined value.  The assessment of all data and information assists the appraiser in reaching a sound conclusion, the report.

* The three approaches to value real estate include the Market Data Approach, the Cost Approach and Income Approach. The three approaches are reconciled and the appraiser selects the most applicable approach in his or her professional and trained opinion, for the final estimate of value.

The Market or Direct Sales Comparison approach to an estimate of value is a market comparison process: sale prices that are paid for similar properties, asking prices, and offers made by prospective buyers or tenants wanting to lease. Called “comparables” (see below) major real estate similarities or differences are compared, including but not limited to: location, gross living or building area, lot size, age and condition of property, Central Air, modernization and updating, construction quality, amenities such as a fireplace, in-ground pool, garage, deck, porch, tennis court, built in sound systems, etc.

A comparable sale is a property similar to the subject property in most respects, located in a similar location and one that has sold recently, within the last 6-10 months, at arm’s length (see below.) Comparable sales are listed in most residential appraisals and are the single most important determining factor in establishing value. It’s the appraiser’s responsibility to fully research the local real estate market and determine which comparable sales best represent the value characteristics of the subject property.

An arm’s length sale is one where both seller and buyer act independently, and have no connection or relationship to each other.

Market value or fair market value is the most probable price that a property will sell for in a competitive and open market that culminates in a fair sale between the seller and buyer, with each being fully informed and without outside interference or stimulus.

The term, highest and best use, refers to the use or utilization that provides most profitable return on an investment.

No; an appraiser cannot simply readdress an appraisal for another client.

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