Piscitelli Appraisal Service has answers to "Frequently Asked Questions"


	Piscitelli Appraisal Service is ready to talk to you about any questions you might have about appraisals or real estate in Ventura County. Feel free to contact us today.

Define the term "Appraisal"
What does an appraiser do?
Why would someone request your services?
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?
Once the report is done, what guarantee is there that the value conclusion is veritable?
How are appraisers certified?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in Ventura County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal appointment
What is "Market Value?"
Once complete, who actually owns the appraisal report?
How can I get the most ROI out of home improvements?

Define the term "Appraisal" (Back to top)

The process of writing an appraisal deals with an evaluation which leads to an opinion of value. The real estate appraiser will typically use a number of "approaches," typically three, to conclude the estimation of market value. One of the methods in use is the Cost Approach, which finds what it would cost to replace the improvements to the house, less the age and physical dilapidation, adding the land value. Another of the processes is the Sales Comparison Approach - which deals with finding a comparable analysis to other similar properties within a close proximity which have recently sold. The Sales Comparison Approach is commonly the most definitive and best indicator of value for a residential property. The Income Approach is primarily used for determining the market value of income-producing properties based on what an investor would pay based on the amount of income a property would bring in.

What does an appraiser do? (Back to top)

An appraiser generates an unprejudiced and well supported assessment of market value, in the support of real property exchanges. Appraisers summarize their conclusions in appraisal reports.

Why would someone request your services? (Back to top)

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

To get 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 Primary Mortgage Insurance.
To fight high property taxes.
If you need to settle an estate.
To give you a negotiating tool when purchasing real estate.
To find a likely sales price when putting your home on the market.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS require an appraisal on every house.
If you ever find yourself in a lawsuit.

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

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

Home inspectors do not generate an opinion of value and are not appraisers. An inspection is a third-party investigation of the available structure and systems of a home, from the roof to the bottom. The archetypal house inspector's report will contain 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 accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

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

Frankly, it's like comparing opera to country. What the CMA depends on are ill-defined trends. An appraisal relies on comparable sales that can be proven by records. Location and building costs are also a priority in an appraisal. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the largest differentiator is the person creating the report. Real estate agents produce CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Moreover, the appraiser is an independent party, with no vested interest in the value conclusion, unlike the agent, who gets a commission based upon the price of the home.

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

The main point of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily 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.
The type of value reported and a definition of the value reported.
The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
Relevant property characteristics, including: location, physical description, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible items.
Any 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 assignment.

For a more in depth view of all that goes into an appraisal report click here: Sample Appraisal Report

Once the report is done, what guarantee is there that the value conclusion is veritable? (Back to top)

In communicating an appraisal report, each appraiser must ensure the following:

That the information analysis implemented in the appraisal was proper.

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

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

The final appraisal report was clear, credible and not easily discredited.

There are rigorous education and practical experience requirements that must be satisfied in order to become a licensed appraiser in California. In addition, appraisers must abide by a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The rules for developing an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Back to top) Licensing and certification takes classroom study, tests and practical experience. Once an appraiser is licensed, he or she must then engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who are an appraiser's customers? (Back to top)

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

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

Gathering information is one of the primary tasks an appraiser engages in. 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 gathered by the appraiser during an inspection.

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

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

Why do I need a professional appraisal? (Back to top)

If you're making some sort of financial decision and the value of your home is relevant, you'll want to hire a licensed appraiser. If you're selling your home, an appraisal helps you set the most appropriate price. 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. A house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making smart financial decisions.

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

PMI stands for Private Mortgage Insurance. This supplemental plan takes care of the lender in the event a borrower defaults on the loan and the market price of the house is less than the balance of 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.


	Has your home value appreciated since you first purchased? Contact Piscitelli Appraisal Service today at 818-889-7664. You may be able to save money by removing your Private Mortgage Insurance payment.

Should I do anything in advance of the appraisal appointment (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 features. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house . Trim any shrubs and relocate any items that would make it difficult to measure the structure. Indoors, make sure the appraiser can get to items like furnaces and water heaters.

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

Any records on the purchase of the property for the last three years.
List of personal property to be sold with the home.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system 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 Ventura and or legal description of the property.

What is "Market Value?" (Back to top)

In real estate appraising, 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? (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 report - it's usually bundled with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

This rule doesn't apply when a home owner hires an appraiser directly. In these cases, the appraiser may define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can do whatever they want with the appraisal.

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

Like all things real estate, this is dependent on a home's location. 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 weren't far behind, 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 atypical for your neighborhood in terms of size.