Seaview Real Estate has answers to "Frequently Asked Questions"


	Seaview Real Estate is always willing to address any inquiries you might have about appraisals or real estate in Orange County. Don't hesitate to contact us today.

Describe an appraisal
What does an appraiser do?
What would cause me to require services from Seaview Real Estate?
Is an appraisal the same as a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
Upon completion of the appraisal, how can I have a guarantee that the value indicated is trustworthy?
How difficult is it to become certified?
Who do appraisers work for?
Where does Seaview Real Estate get the data used to estimate values in Orange 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?
Once complete, who actually owns the appraisal report?
How can I get the most ROI out of home improvements?

Describe an appraisal (Return to top)

The procedure of performing an appraisal deals with an estimation which leads to an opinion of value. This opinion or estimate is concluded by a formal process that typically utilizes the three main "common approaches to value". One of the methods in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the house, minus age and physical dilapidation, plus the land value. The Sales Comparison Approach involves searching for comparable houses in the vicinity and figuring out the value based on comparing those properties to the home being investigated. Being the most commonly used approach, the Sales Comparison Approach tends to be the most accurate and best indicator of market value for a residential property. The Income Approach is generally used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.

What does an appraiser do? (Return to top)

An appraiser forumlates a fair and credible opinion of market value, to be used in making real estate transactions. Appraisers present their expert conclusions in appraisal reports.

What would cause me to require services from Seaview Real Estate? (Return to top)

There are many reasons to order an appraisal from Seaview Real Estate with the usual reason being real estate and mortgage transactions. A few other reasons for purchasing an report include:

If you are applying for a loan.
If you would like to lower your property tax obligations.
To help a homeowner realize if they owe less than 80% of their home's value and remove insurance.
To contest improperly assessed property taxes.
If you need to take care of an estate.
To offer you an edge when purchasing real estate.
To determine a likely property value when listing your home.
To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
Because an official agency such as the IRS requires it.
If you are ever involved in a civil case.

If you need a more detailed explanation of the appraisal process, please click here.

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

Appraisers do not do provide home inspections and are not home inspectors. The point of a home inspection is to investigate the structure of the property from foundation to rooftop. Usually, a home inspection report will explain 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 other visible structures.

What is the difference between an appraisal and a comparative market analysis (CMA)? (Return to top)

To be honest, they share nothing in common. The CMA utilizes market trends to conduct most of their business. An appraisal utilizes comparable sales that can be verified by public record. Area and construction prices are also important in an appraisal. 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.

The person behind the report is hands down the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to accept a flat fee for work they perform, regardless of their value conclusion.

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

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

Who engaged the appraiser and other intended users.
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 appraiser's opinions and conclusions.
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 valuation, such as personal property, permanent equipment installations and even intangible factors.
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 activity of completing the appraisal.

For a more detailed look at all that goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, how can I have a guarantee that the value indicated is trustworthy? (Return to top)

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

The appraisal contained an appropriate analysis of the data.

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

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

That a credible, defensible appraisal report was imparted.

To become a state licensed appraiser, there are intense education requirements as well as practical experience that must be attained - all with the objective of being able to render unbiased value opinions. Plus, appraisers must obey a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for developing an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Return to top) Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. However, licensing and certification is commonly associated with many hours of coursework, tests and experience working under a supervisor. Once licensed, he/she must then engage in continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who do appraisers work for? (Return to top)

Mortgage lenders are an appraiser's typical client, requiring their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Seaview Real Estate get the data used to estimate values in Orange County or other areas? (Return to top)

One of the main activities of an appraiser is to compile data. Data can be categorized as either Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.

General data is gathered from a number of sources. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. To verify actual sales prices, we research tax records and other public documents that are usually online nowadays. Appraisers often have 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 last but not least, the appraiser assimilates general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.

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

An appraisal is a worthwhile anytime your home's value is relevant to some financial decision. When selling your house, an appraisal will help you determine a price that maximizes profit and reduces time on the market. 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 home is often the single, largest financial asset anybody owns. Knowing its true value means you can make wise financial decisions.

My mortgage statement has an item on it for PMI? Can I get rid of that? (Return to top)

PMI is the common abbreviation for for Private Mortgage Insurance. PMI takes care of the lender in the event a borrower is unable to pay on the loan and the value of the property is lower than what the borrower still owes on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Has your real estate appreciated since you first purchased? Call Seaview Real Estate today at 7148324640 to see if you can cancel your Private Mortgage Insurance payment.

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

We start with an inspection of the property. 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 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.

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

Any information on the purchase of the property for the last three years.
List of personal property to be sold with the home.
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 upgrades, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
A list of "proposed" improvements if the property is to be appraised "as complete".

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."

Once complete, 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 stipulate 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.

How can I get the most ROI out of home improvements? (Return to top)

The added value of a particular amenity truly depends on the local market. 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.

As a rule, the most value returned from renovating a home comes in the kitchen. 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%. On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.