Radloff Appraisal Service, LLC has answers to "Frequently Asked Questions"


	Radloff Appraisal Service, LLC is prepared to handle any concerns you might have about appraisals or real estate in Marathon County. Feel free to contact us today.

What is an appraisal?
What does an appraiser do?
Why would a person require a real estate appraisal?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What does the appraisal report contain?
Upon completion of the appraisal, what guarantee is there that the value conclusion is legitimate?
How hard is it to become certified?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in Marathon County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
Define "Market Value"
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?

What is an appraisal? (Back to top)

The procedure of writing an appraisal report deals with an evaluation which leads to an opinion of value. There are three "common approaches to value" which assists the real estate appraiser come to this opinion or estimate. The Cost Approach is one of the processes that real estate appraisers use to find the value of a house; it involves finding what the improvements would cost less physical deterioration, plus the land value. The most common approach in finding the likely sales price of a house is the Sales Comparison Approach which deals with making a comparison to similar properties close by. Being the most commonly used approach, the Sales Comparison Approach is generally the most accurate and best indicator of market value for a property. The third approach is the Income Approach, which is the best method in appraising income producing properties - it involves estimating what an investor would pay based on the capital generated by the property.

What does an appraiser do? (Back to top)

An appraiser provides a professional, unbiased determination of market value, to be used in making real estate transactions. Appraisers illustate their professional investigation in appraisal reports.

Why would a person require a real estate appraisal? (Back to top)

There are many reasons to order an appraisal with the most common reason being real estate and mortgage transactions. Some other reasons for ordering an appraisal include:

If you are applying for a loan.
To reduce your tax burden.
To demonstrate a homeowner's acquired equity and remove PMI.
To contest high property taxes.
If you need to settle an estate.
To offer you an edge when purchasing a home.
To determine the most probable property value when listing your home.
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.
If you ever find yourself in a civil case.

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

What is the difference between an appraisal and a home inspection? (Back to top)

Home inspectors do not provide an opinion of value and are not appraisers. The purpose of a home inspection is to investigate the structure of the house from basement to attic. Commonly, a home inspection report will evaluate the amenities and the necessities of the house: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

Is an appraisal the same as a comparative market analysis(CMA)? (Back to top)

Frankly, they share nothing in common. The CMA depends on indistinct market trends. An appraisal relies on comparable sales that can be validated by records. The appraisal report will also contain neighborhood and building costs. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the largest differentiator is the person behind the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a flat fee for work they perform, regardless of their outcome.

What does the appraisal report contain? (Back to top)

The main objective of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:

The client and other intended users.
How the appraisal is supposed to be used.
The appraisal's purpose.
The type of value reported 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 description, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible items.
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.
What was included in the process of completing the job.

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

Upon completion of the appraisal, what guarantee is there that the value conclusion is legitimate? (Back to top)

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

That the information analysis implemented in the appraisal was appropriate.

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

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

The final appraisal report was transparent, credible and not easily discredited.

To become a state licensed appraiser, there are strenuous education requirements as well as practical experience that must be attained. In addition, appraisers must obey a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for working up an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Back to top) Regulations regarding licensing and certification are different from state to state. However, licensing and certification typically translates to many hours of classroom study, tests and real world experience. Once licensed, he or she is required to complete continuing education courses so the license remains up to date. To see the specific requirements for any state click here.

Who are an appraiser's customers? (Back 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. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does an appraiser get the information used to estimate values in Marathon County or other areas? (Back to top)

Gathering data is one of the primary tasks an appraiser performs. Data can be categorized 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 many places. Local Multiple Listing Services (MLS) provide data on recently sold homes that could be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood product.

And most importantly, the appraiser assimilates general data from his or her past experience in creating appraisals for other houses in the same market.

Why should I hire a licensed appraiser? (Back to top)

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 figure out a price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from Radloff Appraisal Service, LLC is the best documentation to ensure assets are split up fairly. A house is often the single, largest financial asset anybody owns. Knowing its true value means you can make smart financial decisions.

What exactly is PMI and how can I get rid of it? (Back to top)

PMI is the common abbreviation for for Private Mortgage Insurance. This added policy takes care of the lender in the event a borrower defaults on the loan and the value of the house 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.


	Has your real estate appreciated since you first purchased? Contact Radloff Appraisal Service, LLC today at (715) 849-8750 to see if you can get rid of your Private Mortgage Insurance premium.

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

We begin with an inspection of the home. During this process, we 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 . Trim any landscaping and relocate any items that would make it difficult to measure the structure. On the inside, make sure we can get to items like furnaces and water heaters.

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

Any records on the purchase of the property for the last three years.
A list of any personal property that is part of the home and you intend to be sold with the home, such as a oven, or a washer and dryer, if applicable.
Title policy that lists encroachments or easements.
A list of any major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
A list of "proposed" improvements when the property is being appraised "as complete".

Define "Market Value" (Back 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? (Back to top)

For mortgage transactions, the lender requests the appraisal, either directly or through a third party. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is certainly entitled to a copy of the appraisal - it's usually included with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner hires an appraiser directly. 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 noted otherwise, the home owner can use the appraisal for any purpose.

Are some home improvements more worthwhile than others? (Back to top)

This really depends on where the home is. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

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 are right up there with kitchens, yielding 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.