Keystone Home Appraisals, LLC has answers to "Frequently Asked Questions"


	Keystone Home Appraisals, LLC is ready to talk to you about any concerns you might have about appraisals in Campbell County. Contact us today to see how we can help solve your specific valuation problems.

Define the term "Appraisal"
What does an appraiser do?
Why would a person need services from Keystone Home Appraisals, LLC?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
Upon completion of the report, what assurance is there that the final number is legitimate?
What goes into an appraiser's certification?
Who engages the services of appraisers?
Where does Keystone Home Appraisals, LLC get the data used to estimate values in Campbell County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
What does "Market Value" mean?
Who actually owns the appraisal report?
Which home renovations add the most to the price?

Define the term "Appraisal" (Return to top)

The method of producing an appraisal deals with an inspection which leads to an opinion of value. The real estate appraiser must use a number of "approaches," typically three, to come to the estimation of market value. One of the three is the Cost Approach - which is how much it would cost to replace the improvements, minus physical deterioration and other factors, then adding the land value. The most common approach in figuring the likely sales price of a house is the Sales Comparison Approach which deals with making a comparison to comparable homes close by. The Sales Comparison Approach is commonly the most accurate and best indicator of a liklely sales price for a house. One of the least common approaches in appraising residential properties is the Income Approach, which is commonly used to figure the value of a property based on what an investor would pay based on the income produced by the building.

What does an appraiser do? (Return to top)

An appraiser offers an unprejudiced and well justified determination of market value, in the support of real property transactions. Appraisers show their findings in appraisal reports.

Why would a person need services from Keystone Home Appraisals, LLC? (Return to top)

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

To get a loan.
To reduce your tax burden.
To build a case for a homeowner's equity and remove insurance.
To fight inflated property taxes.
If you need to take care of an estate.
To give you an edge when purchasing a home.
To figure out an honest price when listing your home.
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 property.
It's possible you could be involved in a lawsuit - an appraisal will definitely help.

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

Is an appraisal the same as a home inspection? (Return to top)

The appraiser is not a home inspector nor does he/she do a full home inspection. A third-party home inspector will inspect the structure of the house, from the roof to the foundation. The standard property inspector's report will include an evaluation of the integrity of the house's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

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

Honestly, they have nothing in common. The CMA depends on indefinite trends in the market. An appraisal is based on comparable sales that can be verified by records. Also, the appraisal verifies other factors like condition, location and replacement costs. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the largest differentiator is who's behind the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, generate CMA's. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Moreover, the appraiser is an independent party, with no conditional interest in the property's value, unlike the real estate agent, whose income is tied to the price of the home.

What's in an appraisal report? (Return to top)

Every report must indicate a believable estimate of value and will document 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.(Sometimes this is in the past or maybe the future for new construction!)
Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed 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.
What was involved in the activity of completing the appraisal.

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

Upon completion of the report, what assurance is there that the final number is legitimate? (Return 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 crucial errors contained in the report, nor any relevant details left out.

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

The final appraisal report was easy to explain, legitimate and not easily discredited.

There are rigorous classroom and practical experience requirements that must be satisfied in order to achieve the designation of "licensed appraiser" in Kentucky. Plus, appraisers must stick to a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for working up an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

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Licensing and certification requires classroom study, tests and practical experience. Once an appraiser is licensed, he or she is required to take continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who engages the services of appraisers? (Return to top)

Commonly, appraisers are hired by lenders to estimate the value of real estate involved in a loan transaction. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Keystone Home Appraisals, LLC get the data used to estimate values in Campbell County or other areas? (Return to top)

One of the primary things an appraiser does is to assimilate property data. Data can be categorized as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser while on site.

General data is collected from a number of places. Local Multiple Listing Services (MLS) provide data on recently sold homes that might be used as comparables. Tax records and other public documents reveal actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood product.

And last but not least, the appraiser assimilates general data from his or her past experience in doing assignments for other properties in the same market.

What can a full appraisal do for me? (Return to top)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. When selling your house, an appraisal helps you set a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Keystone Home Appraisals, LLC is the best way to ensure assets are split up evenly. A house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making the right financial decisions.

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

PMI is the common abbreviation for for Private Mortgage Insurance. It protects the lender if a borrower defaults on the loan and the market price of the property is less than what is owed on the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.


	Does your monthly mortgage payment have a lineitem for PMI?Call Keystone Home Appraisals, LLC today at 859-781-8225 or send us an e-mail. A current appraisal could save you thousands.

Should I do anything in advance of the appraisal inspection (Return to top)

We start with an inspection of the home. 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. Inside, 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 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:

Information on the latest purchase of the property in the last three years.
Information on any written private easements, such as a shared driveway with a neighbor.
A bill for your most recent real estate taxes which should also contain a legal description of the property.
Brag sheet that lists major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
Information on "Homeowners Associations" or condominium covenants and fees.

What does "Market Value" mean? (Return 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 actually owns the appraisal report? (Return to top)

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 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 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.

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

A home's location - what city it is in and even what part of that city - is key to this popular question. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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, yielding 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.