A.M.P. Appraisals, Inc has answers to "Frequently Asked Questions"


	A.M.P. Appraisals, Inc is willing to handle any inquiries you might have about appraisals or real estate in Ham Lake and Anoka County. Feel free to contact us today.

What is an appraisal?
What does an appraiser do?
What would cause me to request your services?
How is an appraisal different than a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What's in an appraisal report?
Upon completion of the appraisal, how can I have certainty that the value conclusion is trustworthy?
How difficult is it to become certified?
Who are an appraiser's customers?
Where does A.M.P. Appraisals, Inc get the information used to estimate values in Anoka County or other areas?
Why should I hire a licensed appraiser?
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"?
Does the appraisal belong to the bank or the consumer?
I want to get more for my house. Where should I spend money renovating?

What is an appraisal? (See list of FAQ's)

An appraisal report is an inspection leading to an opinion of value. This opinion or estimate is arrived at by a formal process that typically uses three "common approaches to value". One of the three 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. Another of the approaches is the Sales Comparison Approach - which deals with making a comparison to other similar nearby properties which have recently sold. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a residential property. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it deals with estimating what an investor would pay based on the income generated by the property.

What does an appraiser do? (See list of FAQ's)

An appraiser offers an objective and well justified opinion of market value, in the support of real estate transactions. Appraisers present their findings in appraisal reports.

What would cause me to request your services? (See list of FAQ's)

There are many reasons to order an appraisal from A.M.P. Appraisals, Inc with the usual reason being real estate and mortgage transactions. Other reasons for ordering an appraisal include:

To obtain a loan.
To reduce your property taxes.
To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
To challenge inflated property taxes.
If you need to take care of an estate.
To provide you an edge when purchasing a home.
To determine a reasonable property value 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.
It's possible you could be involved in a lawsuit - an appraisal will help.

For a more detailed description of the appraisal process click here.

How is an appraisal different than a home inspection? (See list of FAQ's)

The appraiser is not a home inspector and does not do a comprehensive home inspection. The point of a home inspection is to evaluate the structure of the property from foundation to attic. The general property inspector's report will include an evaluation of the integrity of the home's heating system, 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? (See list of FAQ's)

To be honest, they have nothing in common. The CMA relies on indefinite market trends. Appraisals use similar sales which are verifiable resources. Location and building prices are also important in an appraisal. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

Who's creating the report is frankly the biggest difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. A certified, Minnesota licensed professional who has formed a career on valuing real estate in and around Anoka County creates the appraisal. 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 collect only a flat sum for work they perform, regardless of their outcome.

What's in an appraisal report? (See list of FAQ's)

The main objective of an appraisal report 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 appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the value opinion.
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 valuation, such as personal property, trade fixtures and even intangible factors.
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.
What was included in the activity of completing the appraisal.

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

Upon completion of the appraisal, how can I have certainty that the value conclusion is trustworthy? (See list of FAQ's)

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

That the information analysis contained in the appraisal was appropriate.

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

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

The final appraisal report was understandable, sound and conclusive.

To become a state licensed appraiser, there are education requirements as well as on the jobexperience that must be logged - all with the objective of gaining the skills required to provide unbiased value opinions. Likewise, appraisers must abide by a strict industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for working up an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's) Licensing and certification is achieved through classroom study, tests and practical experience. Once licensed, he/she must then take continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who are an appraiser's customers? (See list of FAQ's)

Most of the time, appraisers are called upon by mortgage lenders to estimate the value of real estate involved in a loan transaction. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does A.M.P. Appraisals, Inc get the information used to estimate values in Anoka County or other areas? (See list of FAQ's)

One of the main things an appraiser does is to assimilate data. Data can be categorized as either Specific or General. Specific data is gathered 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. To research recent sales to be used as "comps", we often use the local Multiple Listing Service. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood servers.

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

Why should I hire a licensed appraiser? (See list of FAQ's)

If you're making any kind of financial decision and the value of your home is relevant, you'll want to hire a licensed appraiser. For those selling a home, you'll want to determine 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. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from A.M.P. Appraisals, Inc is the best documentation to ensure assets are split up properly. 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? (See list of FAQ's)

PMI stands for Private Mortgage Insurance. This added policy covers the lender in the event a borrower doesn't pay on the loan and the value of the property 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 savings from dropping your PMI will make up for the price of the appraisal in a matter of months. A.M.P. Appraisals, Inc is in the business of tracking value trends in Ham Lake and Anoka County. Contact us today.

Should I do anything in advance of the appraisal appointment (See list of FAQ's)

We start with an inspection of the property. During this process, the appraiser 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. Inside, pick up any clutter and make sure we can find our way to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of outside walls.

To help speed things along plus ensure a more accurate report, try if possible to have the following items:

A survey or plot map of the property and building (if available).
List of personal property to be sold with the home.
Title policy that describes encroachments or easements.
Brag sheet that lists major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of Energy efficiency upgrades 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"? (See list of FAQ's)

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? (See list of FAQ's)

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 certainly entitled to a copy of the report - it's usually bundled 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 state the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not noted 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? (See list of FAQ's)

A home's location - what city it is in and even what part of that city - is key to this popular question. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!

No matter where you go, however, renovating a kitchen is almost always a safe move. 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, yielding 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.