Michael F. Delaney and Associates, Inc. has answers to "Frequently Asked Questions"


	Michael F. Delaney and Associates, Inc. is happy to handle any questions you might have about appraisals in Bucks County. Feel free to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
What would cause me to require your services?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
After completing the report, what guarantee is there that the final number is veritable?
What goes into an appraiser's certification?
Who employs appraisers?
Where does Michael F. Delaney and Associates, Inc. get the data used to estimate values in Bucks County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal inspection
What is "Market Value?"
Who has rights to the appraisal report?
Which home renovations add the most to the price?

Define the term "Appraisal" (Go to list of questions)

The appraisal process is an evaluation that generates an opinion of value. This opinion or estimate is discerned by a formal process that commonly uses the three main "common approaches to value". One of the methods in use is the Cost Approach, which finds what it would cost to replace the improvements to the house, less the depreciation and physical dilapidation, plus the land value. The Sales Comparison Approach involves searching for similar houses in close proximity and discerning value based on comparing those properties to the house being appraised. The Sales Comparison Approach is normally the most definitive and best indicator of a liklely sales price for a house. The Income Approach is mainly used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in.

Describe what an appraiser does (Go to list of questions)

An appraiser produces a professional, unbiased opinion of market value, in the support of real property transactions. Appraisers document their professional investigation in appraisal reports.

What would cause me to require your services? (Go to list of questions)

There are a lot of reasons to purchase an appraisal from Michael F. Delaney and Associates, Inc. with the usual reason being real estate and mortgage transactions. Other reasons for ordering an appraisal include:

If you are applying for a loan.
If you would like to lower your property tax obligations.
To help a homeowner realize if they owe less than 80% of their home's value and remove Primary Mortgage Insurance.
To challenge inflated property taxes.
If you need to settle an estate.
To provide you a negotiating tool when purchasing a home.
To find the most probable price when putting your home on the market.
To defend 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.
If you ever find yourself in a civil case.

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

How is an appraisal different than a home inspection? (Go to list of questions)

Home inspectors do not estimate an opinion of value and do not do appraisal reports. The point of a home inspection is to evaluate the structure of the property from bottom to rooftop. For the most part, a home inspection report will evaluate the amenities and the requirements of the property: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

Is an appraisal the same as a comparative market analysis(CMA)? (Go to list of questions)

Honestly, they share nothing in common. What the CMA depends on are superficial trends. Appraisals use similar sales which are verifiable resources. In addition, the appraisal checks other factors like condition, location and construction prices. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

Who's behind the report is frankly the biggest difference between a CMA and an appraisal. 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. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Moreover, the appraiser is an unbiased party, with no conditional interest in the value of a home, unlike the agent, whose income is tied to the value of the home.

What can I expect to see in my appraisal report? (Go to list of questions)

The main point of an appraisal report 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 the value reported.
The effective date of the value opinion.
Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic factors, the real property interest in question, 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 the like.
Division of interest, such as fractional interest, physical segment and partial holding.
The scope of work used to complete the job.

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

After completing the report, what guarantee is there that the final number is veritable? (Go to list of questions)

In the documentation of an appraisal, each appraiser must ensure the following:

That the information analysis implemented in the appraisal was appropriate.

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

That appraisal services were done in a careful and cognizant fashion.

The final appraisal report was clear, legitimate and conclusive.

To become a state licensed appraiser, there are strenuous education requirements as well as real world experience that must be logged - all with the end goal of gaining the skills required to render unbiased value opinions. Plus, appraisers must stick to a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for developing an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Go to list of questions) Licensing and certification requires classroom study, tests and experience working under a supervisory appraiser. Once licensed, he or she is required to complete continuing education courses in order to keep the license current. To see the specific requirements for any state click here.

Who employs appraisers? (Go to list of questions)

Typically, appraisers are hired by lenders to render a value opinion on real estate involved in a loan transaction - to make sure the subject is indeed adequate collateral for the loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Michael F. Delaney and Associates, Inc. get the data used to estimate values in Bucks County or other areas? (Go to list of questions)

One of the main tasks an appraiser must accomplish is to gather data. Data can be divided into Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is gathered from a number 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 look at tax records and other public documents. Appraisers often need to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And most importantly, the appraiser gathers general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.

Why do I need a professional appraisal? (Go to list of questions)

An appraisal is a worthwhile whenever the value of your home is pertinent to a 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. When buying, you can avoid overpaying by getting an independent appraisal. For those settling an estate or divorce, an appraisal from Michael F. Delaney and Associates, Inc. is the best documentation to ensure assets are split up fairly. Simply put, 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? (Go to list of questions)

PMI is an acronym for Private Mortgage Insurance. This added plan protects the lender if a borrower defaults on the loan and the value of the home is less than what the borrower still owes on the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.


	The savings from cancelling the PMI required when you got your mortgage will make up for the cost of the appraisal in a matter of months. Nobody is more qualified than Michael F. Delaney and Associates, Inc. when it comes to analyzing real estate appreciation in Southampton and Bucks County. Contact us today.

Should I do anything in advance of the appraisal inspection (Go to list of questions)

The first step in most appraisals is the home inspection. 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. On the home's interior, pick up any clutter and make sure we can get to things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of outside walls.

To help expedite our work as well as ensure a more accurate report, try if possible to have the following items:

A plot plan or survey of the house and land (if readily available).
List of personal property to be sold with the building.
Title policy that describes encroachments or easements.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
A list of "suggested" improvements if the property is to be appraised "as complete".

What is "Market Value?" (Go to list of questions)

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? (Go to list of questions)

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 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 engaging the appraiser for things outside securing a mortgage. In these cases, the appraiser may stipulate the purpose of the appraisal; 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.

Which home renovations add the most to the price? (Go to list of questions)

Like all things real estate, this is dependent on a home's location. 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 move. 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 weren't far behind, yielding 85%. Adding bedrooms and baths can also help the value of your home (when done well) as long as your home doesn't then become an oddball for your neighborhood in terms of size.