profile picture

Shattuck Appraisal has answers to "Frequently Asked Questions"

Shattuck Appraisal is prepared to elaborate on any questions you might have about appraisals or real estate in Albany County, Saratoga County, Schenectady County, Rennselaer County and Washington County. Contact Shattuck Appraisal today to talk about how we can help solve your valuation problems.

Describe an appraisal
What does an appraiser do?
What are the reasons a person would require services from Shattuck Appraisal?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What does the appraisal report contain?
After completing the appraisal, how can I have a guarantee that the value indicated is veritable?
What are the requirements to be a certified appraiser?
Who are an appraiser's customers?
Where does an appraiser get the data used to estimate values in Albany 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 appointment
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?



Describe an appraisal   (Back to top)

An appraisal report is a thought process allowing the appraiser to come to an opinion of value. The appraiser will typically use a several "approaches," typically three, to draw up the estimation of market value. One of the processes in use is the Cost Approach, which finds what it would cost to restore the improvements to the house, less the age and physical deterioration, plus the land value. The Sales Comparison Approach involves searching for similar houses in the vicinity and figuring out the value based on comparing those homes to the house being appraised. The Sales Comparison Approach is commonly the most accurate and clearest indicator of a liklely sales price for a residence. 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 capital a property produce.

What does an appraiser do?   (Back to top)

An appraiser generates an objective and well substantiated determination of market value, in the support of real property exchanges. Appraisers summarize their expert analysis in appraisal reports.


What are the reasons a person would require services from Shattuck Appraisal?   (Back to top)

There are a lot of reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for getting an appraisal report include:
  • If you are applying for a loan.
  • To lower your property taxes.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove insurance.
  • To challenge high property taxes.
  • If you need to settle an estate.
  • To give you an edge when purchasing a home.
  • To find a likely price 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 home.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.
For a more detailed explanation of the appraisal process click here.


How is an appraiser different than a home inspector?   (Back to top)

Appraisers do not do provide house inspections and are not home inspectors. A third-party home inspector will inspect the structure of the home, from the top to the foundation. The usual home inspector's report will include an evaluation of the integrity of the property'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.

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. What the CMA relies upon are ill-defined trends. An appraisal is based on comparable sales that can be validated by public record. Also, the appraisal checks other factors like condition, neighborhood and replacement costs. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

The person behind the report is actually the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, generate CMA's. A certified, New York licensed professional who made their livelihood on valuing homes in and around Albany County creates the appraisal. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon fee for assignments, regardless of their value conclusion.

What does the appraisal report contain?   (Back to top)

The main objective of an appraisal document 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 appraisal.
  • The purpose of the appraisal.
  • The type of value contained and a definition of that value.
  • 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 real property interest 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 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 involved in the process of completing the appraisal.
For a more detailed view of the work that goes into an appraisal report click here: Sample Appraisal Report


After completing the appraisal, how can I have a guarantee that the value indicated is veritable?   (Back to top)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • The appraisal contained a suitable 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 conducted in a careless or negligent fashion.

  • The final appraisal report was understandable, legitimate and defensible.
There are rigorous classroom and real world experience requirements that must be met in order to achieve the designation of "licensed appraiser" in New York. Plus, appraisers must follow a strict 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)

Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. In general, licensing and certification typically translates to many hours of classroom study, tests and practical experience. Once licensed, he/she is required to complete continuing education courses in order to keep the license up to date. To see the specific requirements for any state
click here.

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

Typically, appraisers are employed by mortgage lenders to estimate the value of a house involved in a loan transaction - to make sure the house is indeed adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

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

One of the main things an appraiser does is to collect data. Data can be categorized as either Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.

General data is gathered from a numerous sources. Local Multiple Listing Services (MLS) provide data on recently sold homes that might be used as comparables. To verify actual sales prices, we use tax records and other public documents. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood service.

And most importantly, the appraiser assimilates general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.


What can a full appraisal do for me?   (Back 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. 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. When buying, you can avoid overpaying by commissioning an independent appraisal. For those settling an estate or divorce, an appraisal from Shattuck Appraisal is the best way to ensure assets are divided evenly. A house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making informed financial decisions.


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

PMI stands for Private Mortgage Insurance. It guards the lender in the event a borrower defaults on the loan and the value of the house is less than the balance of the loan. 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.

The amount you keep from cancelling the PMI required when you got your mortgage will make up for the price of the appraisal in a matter of months. Shattuck Appraisal has years of experience with value trends in Albany, Saratoga, Schenectady, Rensselaer and Washington Counties.  Contact us today.

Should I do anything in advance of the appraisal appointment   (Back to top)

We begin 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. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house . Trim any bushes and move any items that would make it difficult to measure the structure. Indoors, make sure we can easily access items like furnaces and water heaters.

To help expedite our work 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.
  • Title policy that describes encroachments or easements.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
  • 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 "suggested" improvements when the property is being appraised "as complete".

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."



Does the appraisal belong to the bank or the consumer?   (Back to top)

For mortgage transactions, the lender requests the appraisal, either directly or through a third party. 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 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 cases, the appraiser may define 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.


Are some home improvements more worthwhile than others?   (Back to top)

It really depends on the market. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

As a rule, the best ROI from renovating a home comes in the kitchen. 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, returning 85%. Adding bedrooms and baths can also help the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.