Lindau & Associates has answers to "Frequently Asked Questions"


	Lindau & Associates is always willing to answer any questions you might have about appraisals in Milwaukee and Milwaukee County. Contact Lindau & Associates today to see how we can help you with your valuation problems.

Describe an appraisal
What does an appraiser do?
What would cause me to need services from Lindau & Associates?
How is an appraisal different than a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What can I expect to see in my appraisal report?
Upon completion of the report, what assurance is there that the value indicated is trustworthy?
What are the requirements to be a certified appraiser?
Who engages the services of appraisers?
Where does an appraiser get the data used to estimate values in Milwaukee County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What does "Market Value" mean?
Who has rights to the appraisal report?
Which home renovations add the most to the price?

Describe an appraisal (Back to top)

An appraisal report is an evaluation that concludes with an opinion of value. The appraiser will use a number of "approaches," typically three, to draw up the estimation of market value. The Cost Approach is one of the approaches that appraisers use to find the value of a home; it involves figuring what the improvements would cost without physical depreciation, plus the land value. Another of the processes is the Sales Comparison Approach - which concerns making a comparison to other similar nearby properties which have recently sold. The Sales Comparison Approach is normally the most accurate and best indicator of value for a residence. The Income Approach is generally used for determining 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.

What does an appraiser do? (Back to top)

An appraiser offers a professional, unbiased opinion of market value, in the support of real property transactions. Appraisers illustate their professional findings in appraisal reports.

What would cause me to need services from Lindau & Associates? (Back to top)

There are a lot of reasons to purchase an appraisal from Lindau & Associates with the most common reason being real estate and mortgage transactions. Some other reasons for getting an appraisal report include:

To receive a loan.
If you would like to lower your property tax burden.
To demonstrate a homeowner's acquired equity and remove insurance.
To fight high property taxes.
To settle an estate.
To give you an edge when purchasing a home.
To determine a reasonable sales price when listing your home.
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.

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

How is an appraisal different than a home inspection? (Back to top)

The appraiser is not a home inspector and he or she does not do a comprehensive home inspection. A third-party home inspector will evaluate the structure of the home, from the top to the foundation. Commonly, a home inspection report will discuss the amenities and the necessities of the house: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

My agent performed a CMA for me. Is that the same as an appraisal? (Back to top)

Frankly, it's like comparing Shakespeare to reality TV. The CMA uses market trends to conduct most of their business. Appraisals use similar sales which are verifiable resources. In addition, the appraisal looks at other factors like condition, area and construction prices. All a CMA does is generate a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the largest differentiator is who's creating the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, create CMA's. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Further, the appraiser is an independent voice, with no vested interest in the value of a home, unlike the agent, who gets a commission based upon the value of the home.

What can I expect to see in my appraisal report? (Back to top)

Each appraisal should indicate a credible estimate of value and should document the following:

The client and whose purposes the appraisal is to serve.
The intended use of the appraisal.
The reason for the assignment.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the value opinion.
Pertinent property characteristics, including: location, physical characteristics, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the valuation, 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 considered when completing the appraisal.

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

Upon completion of the report, what assurance is there that the value indicated is trustworthy? (Back to top)

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

The appraisal used an apropos analysis of the data.

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

That appraisal services were not rendered in a careless or negligent fashion.

That a trustworthy, supportable appraisal report was conferred.

To become a state licensed appraiser, there are extensive education requirements as well as real world 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 tenets for working up an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Back to top) Regulations regarding licensing and certification vary from state to state. However, licensing and certification is commonly associated with many hours of coursework, tests and practical experience. Once an appraiser is licensed, he or 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 engages the services of appraisers? (Back to top)

Mortgage lenders are an appraiser's most likely customer, requiring 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 retain the services of appraisers for asset division and estate settlements.

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

One of the main tasks an appraiser performs is to assimilate data. Data can be categorized as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.

General data is collected from a numerous places. Local Multiple Listing Services (MLS) provide information on recently sold homes that might be used as comparables. To double-check actual sales prices, we research items in the assessor's office and other public documents. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood servers.

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? (Back to top)

If you're making some sort of financial decision and the value of your home matters, you'll want a full appraisal. For those selling a home, you'll want to figure out 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. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. Simply put, a house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

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

PMI is an acronym for Private Mortgage Insurance. PMI covers the lender if a borrower defaults on the loan and the value of the property is lower than the loan balance. 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.


	Does your monthly mortgage payment have a lineitem for PMI?Call Lindau & Associates today at 4144601514 or send us an e-mail. A new appraisal could save you thousands.

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

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

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:

A survey or plot map of the property and building (if readily available).
Written property agreements, such as a maintenance agreement for a shared driveway.
A bill for your most recent real estate taxes which should also contain a legal description of the property.
A list of any major home improvements and enhancements, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .

What does "Market Value" mean? (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)

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 certainly 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 hiring the appraiser for things outside securing a mortgage. In these scenarios, the appraiser may state the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.

Which home renovations add the most to the price? (Back to top)

The answer to this is different depending upon the location of the home. 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. 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%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.