B. E. Schenck & Associates, LLC has answers to "Frequently Asked Questions"


	B. E. Schenck & Associates, LLC is more than happy to handle any questions you might have about appraisals or real estate in Vandalia and Montgomery County. Feel free to contact us today.

Describe an appraisal
What does an appraiser do?
Why would I request services from B. E. Schenck & Associates, LLC?
Is an appraisal the same as a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What's in an appraisal report?
Once the assignment has been completed, how can I have a guarantee that the value conclusion is trustworthy?
What are the requirements to be a certified appraiser?
Who engages the services of appraisers?
Where does an appraiser get the data used to estimate values in Montgomery County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Do you need anything from me in advance?
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?

Describe an appraisal (List of questions)

An appraisal report is a thought process that concludes with an opinion of value. There are three "common approaches to value" which assists the real estate appraiser come to this opinion or estimate. One of the processes in use is the Cost Approach, which is what it would cost to restore the improvements to the home, less the depreciation and physical deterioration, plus the land value. The Sales Comparison Approach involves finding similar houses in the vicinity and discerning value based on making a comparison of those prior sales to the house being appraised. Being the most popular approach, the Sales Comparison Approach is generally the most precise and best indicator of market value for a home. One of the least common approaches in appraising residential properties is the Income Approach, which is mainly used to find the value of a property based on what an investor would pay based on the capital produced by the building.

What does an appraiser do? (List of questions)

An appraiser generates an unprejudiced and well substantiated assessment of market value, to be used in making real estate transactions. Appraisers reveal the details of their professional conclusions in appraisal reports.

Why would I request services from B. E. Schenck & Associates, LLC? (List of questions)

There are many reasons to order an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for purchasing an appraisal include:

If you are applying for a loan.
If you would like to lower your property tax obligations.
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.
If you need to take care of an estate.
To offer you a leg-up when purchasing a home.
To determine the most probable property value when listing your home.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Because a government agency such as the IRS requires it.
It's possible you could be involved in a lawsuit - an appraisal will definitely help.

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

Is an appraisal the same as a home inspection? (List of questions)

Appraisers do not do provide residential property inspections and are not home inspectors. The purpose of a home inspection is to investigate the structure of the property from bottom to attic. Usually, a home inspection report will discuss the amenities and the necessities of the property: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural capacity 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? (List of questions)

To be honest, they share nothing in common. The CMA relies on indistinct trends in the market. An appraisal relies on comparable sales that can be validated by records. The appraisal report will also include neighborhood and building values. 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.

The person creating the report is actually the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding 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. Likewise, the agent has a vested interest in the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a flat fee for work they perform, regardless of their value conclusion.

What's in an appraisal report? (List of questions)

The main purpose of an appraisal document is to give a value opinion, and depending on the scope of the report, you'll usually see the following:

The client and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The reason for the appraisal.
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!)
Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible items.
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.
What was included in the activity of completing the appraisal.

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

Once the assignment has been completed, how can I have a guarantee that the value conclusion is trustworthy? (List of questions)

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

That the information analysis implemented in the appraisal was suitable.

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

That appraisal services were delivered in a careful and conscientious fashion.

That a believable, substantiated appraisal report was imparted.

To become a state licensed appraiser, we must meet considerable education and experience requirements that enable us to formulate an unbiased opinion. Plus, appraisers must obey a strict industry code of ethics and respect 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).

(List of questions) 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 experience working under a supervisory appraiser. Once an appraiser is licensed, he or she is required to take continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who engages the services of appraisers? (List of questions)

Most of the time, appraisers are called upon by lenders to render a value opinion on property involved in a loan transaction - to make sure the house is indeed adequate collateral for the loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does an appraiser get the data used to estimate values in Montgomery County or other areas? (List of questions)

Compiling information is one of the main tasks an appraiser performs. Data can be categorized as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is received from a variety of places. To research recently sold homes 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 product.

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

Why do I need a professional appraisal? (List of questions)

An appraisal is a valuable tool anytime your home's value is pertinent to some financial decision. For those selling a home, you'll want to determine the 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 parties settling an estate or divorce, an appraisal from B. E. Schenck & Associates, LLC is the best documentation to ensure assets are divided evenly. 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? (List of questions)

PMI is short for for Private Mortgage Insurance. This additional policy takes care of the lender if a borrower defaults on the loan and the value of the home is less than the balance of 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.


	Has your real estate appreciated since you first purchased? Contact B. E. Schenck & Associates, LLC today at (937) 454-0400 to see if you can save money by removing your Private Mortgage Insurance premium.

Do you need anything from me in advance? (List of questions)

We start 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 condition of its amenities. On the home's interior, make sure it is clutter free and that 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.

To help expedite our work plus ensure a more accurate report, attempt if possible to have the following items:

A plot plan or survey of the house and land (if available).
Information on any written private easements, such as a shared driveway with a neighbor.
Title policy that describes encroachments or easements.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
Locate copies of the current listing agreement, broker's data sheet and, if the sale is "pending", the purchase agreement.

What does "Market Value" mean? (List of questions)

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? (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 certainly entitled to a copy of the report - it's usually included with all the other closing documents - but is not entitled 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 stipulated otherwise, the home owner can use the appraisal for any purpose.

How can I get the most ROI out of home improvements? (List of questions)

The answer to this is different depending upon the location of the home. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 weren't far behind, yielding 85%. On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.