Lynn E. Peterson has answers to "Frequently Asked Questions"


	Lynn E. Peterson is always willing to handle any questions you might have about appraisals in Bingham County. Feel free to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
What are the reasons a person would request services from Lynn E. Peterson?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
After completing the report, how can I have assurance that the value indicated is valid?
What goes into an appraiser's certification?
Who employs appraisers?
Where does an appraiser get the information used to estimate values in Bingham County or other areas?
What can a full appraisal do for 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?
What does "Market Value" mean?
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?

Define the term "Appraisal" (See list of FAQ's)

The procedure of performing an appraisal deals with an investigation which forms an opinion of value. There are three "common approaches to value" which assists the appraiser arrive at this opinion or estimate. 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. Another of the approaches is the Sales Comparison Approach - which involves finding a comparable analysis to other similar nearby properties which have recently sold. Being the most common approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a residential property. One of the least common approaches in appraising residential properties is the Income Approach, which is commonly used to figure the market value of a property based on what an investor would pay based on the income produced by the property.

Describe what an appraiser does (See list of FAQ's)

An appraiser offers a fair and credible opinion of market value, to be used in making real estate transactions. Appraisers demonstrate their findings in appraisal reports.

What are the reasons a person would request services from Lynn E. Peterson? (See list of FAQ's)

There are a lot of reasons to get an appraisal from Lynn E. Peterson with the most common reason being real estate and mortgage transactions. A few other reasons for getting an appraisal include:

To obtain a loan.
To lower your tax burden.
To build a case for a homeowner's equity and remove PMI.
To challenge high property taxes.
If you need to settle an estate.
To provide you an edge when purchasing real estate.
To determine an honest 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.
Government agencies such as the IRS require an appraisal on every house.
It's possible you could be involved in a lawsuit - an appraisal will definitely help.

If you need more information regarding the appraisal process, please click here.

How is an appraisal different than a home inspection? (See list of FAQ's)

The appraiser is not a home inspector and does not do a complete home inspection. A third-party home inspector will inspect the structure of the property, from the top to the foundation. The general house inspector's report will contain an evaluation of the condition of the house's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

Is an appraisal the same as a comparative market analysis(CMA)? (See list of FAQ's)

Simply put, it's apples and oranges. The CMA depends on indefinite market trends. Appraisals use comparable sales which are verifiable resources. The appraisal report will also contain area 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 biggest difference is the person creating the report. Real estate agents produce CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, state licensed professional who made their livelihood on valuing real estate in and around Bingham County creates the appraisal. Further, the appraiser is an independent party, with no conditional interest in the value of a home, unlike the real estate agent, who gets a commission based upon the value of the home.

What's in an appraisal report? (See list of FAQ's)

The main point of an appraisal report is to give a value opinion, and depending on the scope of the report, you'll usually see the following:

Who engaged the appraiser and whose purposes the appraisal is to serve.
The intended use of the report.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraisal.
Relevant property characteristics, including: location, physical attributes, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible items.
All 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 detailed view of what goes into an appraisal report click here: Sample Appraisal Report

After completing the report, how can I have assurance that the value indicated is valid? (See list of FAQ's)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:

The appraisal used an appropriate analysis of the data.

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

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

The final appraisal report was understandable, legitimate and not easily discredited.

To become a state licensed appraiser, we must satisfy intense education and experience requirements that enable us to produce an unbiased opinion. In addition, appraisers must follow a strict industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for carrying out an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's) Regulations regarding licensing and certification are different from state to state. In general, licensing and certification is most often associated with many hours of coursework, tests and real world experience. Once an appraiser is 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 employs appraisers? (See list of FAQ's)

Mortgage lenders are an appraiser's most likely client, requesting their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does an appraiser get the information used to estimate values in Bingham County or other areas? (See list of FAQ's)

One of the most important tasks an appraiser must accomplish is to collect data. Data can be divided into Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is received from a many sources. To find out about recent sales to be used as "comps", an appraiser will often use the local Multiple Listing Service. To double-check actual sales prices, we research tax records and other public documents. Appraisers routinely have to report when a property is in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And most importantly, the appraiser assembles general data from his or her past experience in doing assignments for other houses in the same market.

What can a full appraisal do for me? (See list of FAQ's)

If you're making any kind of financial decision and the value of your home matters, you'll want an appraisal. 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 parties settling an estate or divorce, an appraisal from Lynn E. Peterson is the best way to ensure assets are split up evenly. A home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

My mortgage statement has an item on it for PMI? Can I get rid of that? (See list of FAQ's)

PMI is the common abbreviation for for Private Mortgage Insurance. This added plan covers the lender in case a borrower defaults on the loan and the market price of the house 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.


	Did you have less than 20% to put down on your mortgage? Call Lynn E. Peterson today at 2083575497. You may be able to cancel your Private Mortgage Insurance payment.

How do I get ready for the appraiser? (See list of FAQ's)

We start 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. On the home's interior, make sure it is clutter free and that we can access 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 available).
Written property agreements, such as a maintenance agreement for a shared driveway.
Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
Locate copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.

What does "Market Value" mean? (See list of FAQ's)

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? (See list of FAQ's)

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 report - 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 define how the appraisal can be used; 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.

Are some home improvements more worthwhile than others? (See list of FAQ's)

The added value of a particular amenity truly depends on the local market. 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 investment. 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, returning 85%. Adding bedrooms and baths can also increase 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.