Mountain Front Appraisal Services has answers to "Frequently Asked Questions"


	Mountain Front Appraisal Services is eager to answer any concerns you might have about appraisals in Cascade County. Don't hesitate to contact us today.

Define the term "Appraisal"
What does an appraiser do?
Why would a person need your services?
Is an appraisal the same as a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What are the contents of an appraisal report?
Once the report has been completed, what assurance is there that the final number is valid?
What does it mean for an appraiser to be licensed?
Who hires an appraiser?
Where does Mountain Front Appraisal Services get the data used to estimate values in Cascade 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?
How do I get ready for the appraiser?
What does "Market Value" mean?
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?

Define the term "Appraisal" (Go to list of questions)

The appraisal process is an evaluation that leads to an opinion of value. This opinion or estimate is figured through a formal method that generally utilizes the three main "common approaches to value". One of them is the Cost Approach - which is how much it would cost to replace the improvements, less physical deterioration and other factors, then adding the land value. The Sales Comparison Approach deals with finding comparable homes in close proximity and discovering the value based on comparing those houses to the home being appraised. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a residential property. The third approach is the Income Approach, which is the best method in appraising income producing properties - it deals with estimating what an investor would pay based on the capital generated by the property.

What does an appraiser do? (Go to list of questions)

An appraiser produces a fair and credible opinion of market value, in the support of real estate transactions. Appraisers show their analysis in appraisal reports.

Why would a person need your services? (Go to list of questions)

There are many reasons to order an appraisal from Mountain Front Appraisal Services with the usual reason being real estate and mortgage transactions. Other reasons for purchasing an appraisal report include:

If you are applying for a loan.
If you would like to lower your property tax burden.
To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
To contest improperly assessed property taxes.
If you need to settle an estate.
To give you a leg-up when purchasing real estate.
To determine an honest 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 property.
If you are ever involved in a lawsuit.

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

Is an appraisal the same as a home inspection? (Go to list of questions)

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 evaluate the structure of the house from foundation to top. Generally, a home inspection report will evaluate the amenities and the requirements of the home: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

My agent performed a CMA for me. Is that the same as an appraisal? (Go to list of questions)

Honestly, they have nothing in common. What the CMA relies upon are vague trends. Appraisals use comparable sales which are verifiable resources. The appraisal report will also contain location and construction costs. All a CMA does is generate a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

Who's behind the report is frankly the most significant difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to accept a flat sum for assignments, regardless of their outcome.

What are the contents of an appraisal report? (Go to list of questions)

The main purpose 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, you'll usually see the following:

The client 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 appraisal.(Sometimes this is in the past or maybe the future for new construction!)
Pertinent property attributes, including: location, physical description, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the appraisal, 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.
The scope of work considered when completing the appraisal.

For a more in depth look at what goes into an appraisal report click here: Sample Appraisal Report

Once the report has been completed, what assurance is there that the final number is valid? (Go to list of questions)

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

That the information analysis implemented in the appraisal was suitable.

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

That appraisal services were done in a careful and cognizant manner.

The final appraisal report was easy to explain, credible and defensible.

To become a state licensed appraiser, there are education requirements as well as real world experience that must be attained. Likewise, appraisers must obey a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for carrying out an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Go to list of questions) 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 real world experience. Once an appraiser is licensed, he/she is required to take continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who hires an appraiser? (Go to list of questions)

Mortgage lenders are an appraiser's typical client, needing their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does Mountain Front Appraisal Services get the data used to estimate values in Cascade County or other areas? (Go to list of questions)

One of the most important things an appraiser does is to assimilate property data. Data can be classified as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser while on site.

General data is gathered from a variety of sources. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. To verify actual sales prices, we use items in the assessor's office and other public documents that are usually online nowadays. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood servers.

And last but not least, the appraiser assimilates 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? (Go to list of questions)

An appraisal is a valuable tool whenever the value of your home is pertinent to some financial decision. When selling your home, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. 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. Don't make decisions in the dark with a professional appraisal.

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

PMI is the common abbreviation for for Private Mortgage Insurance. It protects the lender in the event a borrower is unable to pay on the loan and the market price of the house is lower than the loan balance. 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.


	The amount you keep from cancelling the PMI required when you got your mortgage pays for the appraisal in a matter of months. Nobody is more qualified than Mountain Front Appraisal Services when it comes to analyzing real estate appreciation in Great Falls and Cascade County. Contact us today.

How do I get ready for the appraiser? (Go to list of questions)

We begin with an inspection of the property. 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. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any shrubs and relocate any items that would make it difficult to measure the structure. Indoors, make sure we can get to appliances 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:

A plot plan or survey of the house and land (if readily available).
Written property agreements, such as a maintenance easement 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 wells.
A list of "suggested" improvements when the property is being appraised "as complete".

What does "Market Value" mean? (Go to list of questions)

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."

Who has rights to the appraisal report? (Go to list of questions)

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.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these cases, the appraiser may stipulate the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can use the appraisal for any purpose.

How can I get the most ROI out of home improvements? (Go to list of questions)

This really depends on where the home is. 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 were second, returning 85%. On the contrary, work that may not add value would be painting just for the sake of redecorating.