Steingraber & Associates has answers to "Frequently Asked Questions"

Steingraber & Associates is always happy to address any inquiries you might have about appraisals in Toledo and Lucas County. Contact us today to learn how we can help you with your specific valuation problems.

What is an appraisal?
Describe what an appraiser does
Why would a person need a real estate appraisal?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Once the report has been completed, what assurance is there that the value indicated is valid?
What goes into an appraiser's certification?
Who hires an appraiser?
Where does Steingraber & Associates get the data used to estimate values in Lucas County or other areas?
How can a licensed appraiser help me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal appointment
How does an appraiser define "Market Value"?
Once complete, who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?



What is an appraisal?   (Back to top)

An appraisal report is a thought process that concludes with an opinion of value. The real estate appraiser must 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 evaluates what it would cost to restore the improvements to the home, minus depreciation and physical deterioration, adding the land value. Another of the methods is the Sales Comparison Approach - which deals with discovering a comparison to other similar properties within a close vicinity which have recently sold. Usually, the Sales Comparison Approach is the most definite indicator of market value of a residential property. One of the least common approaches in appraising houses is the Income Approach, which is commonly used to find the value of a property based on what an investor would pay based on the capital produced by the building.

Describe what an appraiser does   (Back to top)

An appraiser generates an impartial and well supported determination of market value, often in the context of a real estate exchange. Appraisers summarize their professional analysis in appraisal reports.


Why would a person need a real estate appraisal?   (Back 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 appraisal include:
  • To receive a loan.
  • To reduce your property taxes.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
  • To challenge improperly assessed property taxes.
  • To handle an estate.
  • To offer you a negotiating tool when purchasing a home.
  • To determine an honest sales price when selling your home.
  • To protect 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.
For a more extensive description of the appraisal process click here.


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

The appraiser is not a home inspector and he or she does not do a complete home inspection. The point of a home inspection is to investigate the structure of the home from foundation to attic. Usually, a home inspection report will discuss the amenities and the necessities of the property: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

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

To be honest, they have nothing in common. The CMA relies on vague trends in the market. The appraisal is reliant on specific definite comparable sales. Also, the appraisal verifies other factors like condition, neighborhood and construction prices. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

But the most significant factor is the person creating the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, create 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 unbiased party, with no conditional interest in the property's value, unlike the agent, whose income is tied to the price of the home.

What are the contents of an appraisal report?   (Back to top)

Each appraisal must reflect a supported value opinion and will clearly state the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The reason for the appraisal.
  • The type of value contained and a definition of the value reported.
  • The effective date of the appraiser's opinions and conclusions.(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 description, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible considerations.
  • 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 used when completing the appraisal.
For a more detailed view of the work that goes into an appraisal report click here: Sample Appraisal Report

Once the report has been completed, what assurance is there that the value indicated is valid?   (Back to top)

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 substantial errors contained in the appraisal, nor any material details left out.

  • That appraisal services were rendered in a careful and conscientious fashion.

  • The final appraisal report was understandable, sound and defensible.
To become a state licensed appraiser, there are intense education requirements as well as on the jobexperience that must be attained - all with the objective of gaining the skills required to render unbiased value opinions. Plus, appraisers must stick to a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for working up an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Back to top) Licensing and certification requires classroom study, tests and experience working under a supervisory appraiser. Once licensed, he or she must then complete continuing education courses in order to keep the license current. To see the specific requirements for any state click here.

Who hires an appraiser?   (Back to top)

Typically, appraisers are hired by lenders to render a value opinion on real estate involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does Steingraber & Associates get the data used to estimate values in Lucas County or other areas?   (Back to top)

Collecting information is one of the primary tasks an appraiser performs. Data can be described as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.

General data is received from a variety of places. To find out about recently sold homes to be used as "comps", we often go to the local Multiple Listing Service. Tax records and other public documents verify actual sales prices in a market. Appraisers often need to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And last but not least, the appraiser assembles general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.

How can a licensed appraiser help me?   (Back to top)

An appraisal is a worthwhile whenever the value of your home is pertinent to a financial decision. For those selling a home, you'll want to determine a price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. When buying, be sure you're not overpaying by getting an independent appraisal. 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. 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?   (Back to top)

PMI is an acronym for Private Mortgage Insurance. It takes care of the lender if a borrower is unable to pay on the loan and the market price of the property is less than what is owed on 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 money you keep from dropping the PMI required when you got your mortgage will make up for the cost of the appraisal in a matter of months. Nobody is more qualified than Steingraber & Associates when it comes to analyzing real estate appreciation in Toledo and Lucas County. Contact us today.

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

We begin 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 status of its amenities. On the home's interior, pick up any clutter and make sure we can get 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:
  • Any information on the purchase of the property for the last three years.
  • Written property agreements, such as a maintenance agreement for a shared driveway.
  • Title policy that describes encroachments or easements.
  • Brag sheet that lists major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

How does an appraiser define "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)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. 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 allowed 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 situations, the appraiser may define 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 use the appraisal for any purpose.

I want to get more for my house. Where should I spend money renovating?   (Back to top)

This really depends on where the home is. 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.

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, yielding 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.