Fairway Appraisal Services, Inc has answers to "Frequently Asked Questions"


	Fairway Appraisal Services, Inc is always prepared to address any concerns you might have about appraisals in Twin Falls County. Contact us today to talk about how we can help you with your valuation problems.

Describe an appraisal
What does an appraiser do?
What would cause me to require a real estate appraisal?
What is the difference between an appraisal and a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What's in an appraisal report?
After completing the appraisal, how can I have assurance that the final number is veritable?
How are appraisers certified?
Who engages the services of appraisers?
Where does an appraiser get the information used to estimate values in Twin Falls County or other areas?
How can a licensed appraiser help me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
How do I get ready for the appraiser?
Define "Market Value"
Who actually owns the appraisal report?
Which home renovations add the most to the price?

Describe an appraisal (List of questions)

An appraisal is an investigation that concludes with an opinion of value. There are three "common approaches to value" which helps the appraiser arrive at this opinion or estimate. One of the processes in use is the Cost Approach, which evaluates what it would cost to replace the improvements to the property, less the depreciation and physical dilapidation, plus the land value. Another of the processes is the Sales Comparison Approach - which involves finding a comparable analysis to other similar properties within a close vicinity which have recently sold. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a residential property. One of the least common approaches in appraising houses is the Income Approach, which is commonly used to find 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? (List of questions)

An appraiser offers an unbiased and well justified opinion of market value, in the support of real property exchanges. Appraisers present their expert analysis in appraisal reports.

What would cause me to require a real estate appraisal? (List of questions)

There are many reasons to purchase an appraisal from Fairway Appraisal Services, Inc with the most common reason being real estate and mortgage transactions. Other reasons for obtaining an appraisal include:

If you are applying for a loan.
To lower your property taxes.
To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
To fight inflated property taxes.
If you need to take care of an estate.
To provide you a negotiating tool when purchasing a home.
To determine an honest price when selling real estate.
To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
Government agencies such as the IRS need an appraisal on every house.
It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.

For a more detailed description of the appraisal process click here.

What is the difference between an appraisal and a home inspection? (List of questions)

Home inspectors do not figure out an opinion of value and are not appraisers. An inspection is a third-party investigation of the available structure and systems of a property, from the roof to the foundation. Generally, a home inspection report will explain the amenities and the requirements of the house: air conditioning (weather permitting), electrical services, 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.

My agent performed a CMA for me. Is that the same as an appraisal? (List of questions)

Simply put, it's like comparing Shakespeare to reality TV. The CMA utilizes market trends to conduct most of their business. An appraisal utilizes comparable sales that can be proven by records. The appraisal report will also contain neighborhood and building values. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the most significant factor is who's creating the report. 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. 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 previously agreed upon sum for assignments, regardless of their outcome.

What's in an appraisal report? (List of questions)

The main point of an appraisal document is to give a value opinion, 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 that value.
The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
Pertinent property characteristics, including: location, physical description, legal attributes, economic attributes, 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 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 when completing the assignment.

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

After completing the appraisal, how can I have assurance that the final number is veritable? (List of questions)

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

That the information analysis utilized in the appraisal was appropriate.

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

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

The final appraisal report was clear, legitimate and defensible.

There are intense classroom and experience requirements that must be met in order to get an appraisal license in Idaho. In addition, appraisers must abide by a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for developing an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(List of questions) Licensing and certification requires classroom study, tests and experience working under a supervisor. Once licensed, he/she must then complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who engages the services of appraisers? (List of questions)

Most of the time, appraisers are called upon by mortgage lenders to render a value opinion on property involved in a loan transaction. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does an appraiser get the information used to estimate values in Twin Falls County or other areas? (List of questions)

Collecting data is one of the main things an appraiser does. Data can be described as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser while on site.

General data is received from a number of sources. To research recent sales to be used as "comps", we often use the local Multiple Listing Service. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers routinely need to report when a property is in a flood zone, so 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 past experience in doing assignments for other properties in the same market.

How can a licensed appraiser help me? (List of questions)

An appraisal is a worthwhile anytime your home's value is relevant to some financial decision. If you're selling your home, an appraisal helps you set a price that maximizes profit and reduces time on the market. When buying, be sure you're not overpaying by getting an independent appraisal. For people settling an estate or divorce, an appraisal from Fairway Appraisal Services, Inc is the best documentation to ensure assets are split up properly. 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? (List of questions)

PMI is the common abbreviation for for Private Mortgage Insurance. This supplementary policy protects the lender if a borrower defaults on the loan and the value of the home is lower than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	The amount you keep from dropping your PMI pays for the appraisal in a matter of months. Fairway Appraisal Services, Inc stays current with value trends in Twin Falls and Twin Falls County. Contact us today.

How do I get ready for the appraiser? (List of questions)

The first step in most appraisals is the property inspection. What this entails is the appraiser, after setting up an appointment, personally going through the home - recording the layout of the rooms, taking photos and documenting the general condition of its amenities. On the home's interior, make sure it is clutter free and that we can find our way to things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of exterior walls.

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

Information on the latest purchase of the property in the last three years.
Title policy that lists encroachments or easements.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
Most recent real estate tax bill from Twin Falls and or legal description of the property.

Define "Market Value" (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 actually owns the appraisal report? (List of questions)

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 included 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 scenarios, the appraiser may state how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can do whatever they want with the appraisal.

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

The answer to this is different depending upon the location of the home. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

As a rule, the best ROI from renovating a home comes in the kitchen. 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 were second, returning 85%. On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.