Cummings Appraisal Service has answers to "Frequently Asked Questions"


	Cummings Appraisal Service is ready to elaborate on any inquiries you might have about appraisals or real estate in Waterbury and New Haven County. Contact us today to talk about how we can help you with your valuation problems.

Define the term "Appraisal"
Describe what an appraiser does
Why would I require services from Cummings Appraisal Service?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
Once the appraisal has been delivered, how can I have certainty that the value conclusion is valid?
What does it mean for an appraiser to be licensed?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in New Haven 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 is "Market Value?"
Who actually owns the appraisal report?
Are some home improvements more worthwhile than others?

Define the term "Appraisal" (Return to top)

An appraiser performs an evaluation that generates an opinion of value. There are three "common approaches to value" which assists the real estate appraiser conclude this opinion or estimate. The Cost Approach is one of the approaches that real estate appraisers use to find the value of a home; it involves concluding what the improvements would cost minus physical deterioration, adding the land value. Easily the most common approach in finding the likely sales price of a home is the Sales Comparison Approach which deals with concluding a comparison to similar properties close by. Being the most common approach, the Sales Comparison Approach tends to be the most accurate and best indicator of market value 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 income a property produce.

Describe what an appraiser does (Return to top)

An appraiser generates a professional, unbiased opinion of market value, in the support of real estate exchanges. Appraisers illustate their investigation in appraisal reports.

Why would I require services from Cummings Appraisal Service? (Return to top)

There are many reasons to get an appraisal from Cummings Appraisal Service with the most common reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal include:

If you are applying for a loan.
If you would like to reduce your property tax obligations.
To build a case for a homeowner's equity and remove insurance.
To challenge improperly assessed property taxes.
If you need to settle an estate.
To offer you a negotiating tool when purchasing a home.
To find an honest property value when selling your home.
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 are ever involved in a lawsuit.

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

How is an appraisal different than a home inspection? (Return to top)

The appraiser is not a home inspector nor does he/she do a complete home inspection. A third-party home inspector will inspect the structure of the house, from the roof to the foundation. Usually, a home inspection report will evaluate the amenities and the requirements of the house: 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.

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

To be blunt, it's night and day. What the CMA relies upon are ill-defined trends. Appraisals use similar sales which are valid resources. In addition, the appraisal checks other factors like condition, location and construction prices. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the biggest difference is the person creating the report. Real estate agents produce CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Moreover, the appraiser is an independent voice, with no vested interest in the value conclusion, unlike the agent, whose income is tied to the value of the home.

What's in an appraisal report? (Return to top)

The main point of an appraisal report 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:

The client and other intended users.
How the appraisal is supposed to be used.
The reason for the appraisal.
The type of value reported and a definition of that value.
The effective date of the appraiser's opinions and conclusions.
Relevant property attributes, including: location, physical description, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed 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.
What was included in the activity of completing the appraisal.

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

Once the appraisal has been delivered, how can I have certainty that the value conclusion is valid? (Return to top)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:

That the information analysis implemented in the appraisal was appropriate.

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

That appraisal services were not carried out in a careless or negligent manner.

The final appraisal report was understandable, legitimate and not easily discredited.

To become a state licensed appraiser, we must meet intense education and experience requirements that give us the background to formulate an unbiased opinion. Likewise, appraisers must obey a strict industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for working up an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Return to top) Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. However, licensing and certification is most often associated with many hours of classroom study, tests and real world experience. Once licensed, he or she is required to complete continuing education courses so the license remains up to date. To see the specific requirements for any state click here.

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

Mortgage lenders are an appraiser's most likely customer, needing their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

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

Compiling information is one of the primary occupations of an appraiser. Data can be divided into Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.

General data is gathered from a variety of places. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. To double-check actual sales prices, we research tax records and other public documents. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood service.

And last but not least, the appraiser assimilates general data from his or her past experience in doing assignments for other properties in the same market.

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

An appraisal is a worthwhile anytime the value of your home is relevant to a financial decision. When selling your home, an appraisal helps you set the most appropriate price. When buying, be sure you're not overpaying by commissioning an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making wise financial decisions.

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

PMI is an acronym for Private Mortgage Insurance. PMI covers the lender in case a borrower defaults on the loan and the market price of the house is less than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Has your real estate appreciated since you first purchased? Contact Cummings Appraisal Service today at (203) 558 5423. You may be able to cancel your Private Mortgage Insurance payment.

How do I get ready for the appraiser? (Return to top)

The first step in most appraisals is the home inspection. 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. 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 get in our way while we measure the structure. On the inside, make sure we can get to items like furnaces and water heaters.

You can make the inspection go faster and improve the accuracy of the appraisal report by having the following things on hand:

A plot plan or survey of the house and land (if readily available).
A list of any personal property that is part of the home and you intend to be sold with the home, such as a oven, or a washer and dryer, if applicable.
Most recent real estate tax bill and or legal description of the property.
Brag sheet that lists major home improvements and upgrades, the date of their installation and their cost (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
Find copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.

What is "Market Value?" (Return 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."

Who actually owns the appraisal report? (Return 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 certainly 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.

This rule doesn't apply when a home owner hires an appraiser directly. In these situations, the appraiser may state how the appraisal can be used; 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.

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

A home's location - what city it is in and even what part of that city - is key to this popular question. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

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 are right up there with kitchens, yielding 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.