FAQ

An appraisal is an unbiased estimate of what a buyer might expect to pay or what a seller expects to receive for a parcel of real property (real estate), where both buyer and seller are informed parties. To be an informed party, most people turn to a licensed, certified, professional appraiser to provide them with the most accurate estimate of the true value of the property.

It all starts with the inspection. An appraiser must inspect the property being appraised to determine the true condition of that property. He or she must actually see features to determine quality, as well as to ensure that they really exist and are in the condition a reasonable buyer would expect them to be.

At Express Valuation, we typically require 30-45 minutes for an inspection of a typical home. Obviously custom homes will require more time to inspect, while smaller homes may require less.

Our appraisers begin with an exterior inspection of your home to determine the “footprint” of the structure. Then we move inside where we will take notes of the readily observable quality features of your home and the condition too. During the interior inspection, we will also take numerous digital pictures for documentation as required by our assigment quidelines. If you have any additional items such as upgrades or updating you would like us to know about, please have that information ready at the time of inspection; it makes our job a bit easier.

The inspection often includes a sketch of the property, ensuring the proper square footage and conveying the layout of the property. Most importantly, the appraiser looks for any readily observable features that would affect the value and marketability of the house; both negatively and positively.

Appraisers most often rely on the sales comparison approach to value to determine the value of a home. A professional, competent appraiser will get to know the neighborhoods in which they practice.This will help them understand the market reactions of buyers to specific features and trends in that market area; this is often referred to jurisdictional competency. The appraiser then researches recent sales in the market area, finds properties which are most similar in appeal to the subject being appraised, and then adjusts these “comparable sales” against the subject. These adjustments represent the typical market reaction based on an analysis of current market trends.

Another approach to value is the income approach. In addition to determining an opinion of market value via the sales comparison approach, an appraiser can also determine the income producing potential for real property. An analysis of other income producing/rental properties from the subject’s area is made and an opinion of market rent is determined.

One other approach to value is the cost approach. This method determines an estimate of value based on the construction cost and land value of the property. This approach considers physical depreciation and also requires the determination of land value separate of the home.

As a result of the HVCC [see below], unless you hired us directly, you will not be paying us directly either. This provision helps aleviate any undue pressure on the appraiser to reach a value in order to be paid. Most often if you are working with a lender, they will hire us via an appraisal managment company [AMC]. This is a major reason for the fee discrepancy; often the AMC charges the lender a fee for service, value added or not, then attempts to “low-ball” the appraiser into a lower than market fee. This is a problem in that we, as appraisers, cannot disclose our fees when working with an AMC. We’re working on this; though, it is currently a state by state approach.

Due to the client confidentiality clause appraisers are bound to, we cannot discuss any non-public information about the appraisal assignment with anyone other than those identified as clients in the report. This means, if you can’t find it on public record or it is only contained in our report; you will not see it without our client’s permission. Though, if you are a borrower, your lender is required by law to give you a copy of the appraisal report at least three days prior to closing; and you always have the option to ask the client to see it; this is usually not an issue.

Alternatively, we can discuss the report with anyone, as long as the client provides express, written permission.

Welcome to the world of appraisers. It is our sworn duty to remain objective, ethical, and to maintain the utmost in competence regarding our service area. Unfortunately, many appraisers and other real estate professionals chose not to be, well, professional at all. That’s where the Home Valuation Code of Conduct [HVCC] comes in.

In an effort to promote objectivity and higher ethical standards in the profesional appraisal practice, Congress passed the HVCC mandating new rules regarding appraiser pressures, appraiser selection and retention, and all kinds of rules regarding reporting standards, inspection guidelines, and communication lines.

Having said that, the HVCC is a living, breathing entity that is changing everyday and it would be a daily task to keep this page updated, So, below are a few links for you to read up on to get the latest HVCC news.

The Appraisal Press – HVCC

Appraisal Institute HVCC Myths & Facts PDF

Fannie Mae HVCC FAQ PDF

Freddie Mac HVCC Information

Realtor.org HVCC Information

An AMC is an appraisal management company. AMC’s serve to alleviate the issues associated with undue pressure on appraisers, to place competent associates in charge of underwriting appraisal reports, and to ensure accurate and ethical appraisal reports are being delivered.

AMC’s are often third party companies, independent of the appraiser and mortgage lender. Unfortunately, this often creates increased fees for those needing the appraisal report and decreased fees for the appraisers. However, there are also many lenders, like National Bank of Arizona, who employ practicing appraisers whom are independent of the loan production staff. This allows them to maintain in-house management of their appraisal needs and to offer reasonable and customary fees to independent appraisers.