The Jones Group has answers to "Frequently Asked Questions"


	The Jones Group is ready to reply to any concerns you might have about appraisals in San Diego County. Feel free to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
Why would someone request services from The Jones Group?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What can I expect to see in my appraisal report?
Once the assignment is done, how can I have confidence that the final number is legitimate?
How are appraisers certified?
Who are an appraiser's customers?
Where does The Jones Group get the data used to estimate values in San Diego County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Does the appraiser need anything from me in advance?
What does "Market Value" mean?
Who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?

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

An appraisal is an investigation that concludes with an opinion of value. There are three "common approaches to value" which helps the appraiser come to this opinion or valuation. The Cost Approach is one of the approaches that appraisers use to find the value of a property; it involves finding what the improvements would cost without physical degradation, plus the land value. Easily the most common approach in finding the likely sales price of a home is the Sales Comparison Approach which concerns figuring a comparison to similar homes nearby. The Sales Comparison Approach is normally the most definitive and clearest indicator of value for a residential property. One of the least common approaches in appraising homes is the Income Approach, which is generally used to find the value of a property based on what an investor would pay based on the capital produced by the property.

Describe what an appraiser does (Go to list of questions)

An appraiser forumlates a professional, unbiased opinion of market value, in the support of real property exchanges. Appraisers illustate their conclusions in appraisal reports.

Why would someone request services from The Jones Group? (Go to list of questions)

There are a lot of reasons to order an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for ordering an report include:

To get a loan.
To reduce your property taxes.
To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
To challenge inflated property taxes.
If you need to settle an estate.
To provide you a negotiating tool when purchasing real estate.
To figure out an honest sales price when selling real estate.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS need an appraisal on every home.
It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.

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

How is an appraiser different than a home inspector? (Go to list of questions)

Appraisers do not do complete residential property inspections and are not home inspectors. The point of a home inspection is to evaluate the structure of the house from basement to top. For the most part, a home inspection report will discuss the amenities and the necessities of the property: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

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

To be blunt, it's like comparing Shakespeare to reality TV. The CMA uses market trends to conduct most of their business. Appraisals use comparable sales which are verifiable resources. Also, the appraisal verifies other factors like condition, area and replacement prices. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

But the biggest difference is the person behind the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA's. A certified, Oklahoma licensed professional who made their livelihood on valuing properties in and around San Diego County creates the appraisal. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon sum for work they perform, regardless of their value conclusion.

What can I expect to see in my appraisal report? (Go to list of questions)

The main objective of an appraisal document is to give a value opinion, and depending on the scope of the report, one will customarily see the following:

Who engaged the appraiser and other intended users.
How the appraisal is supposed to be used.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the appraisal.
Relevant property characteristics, including: location, physical description, legal attributes, economic factors, the property rights valued, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible considerations.
Any 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 used when completing the assignment.

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

Once the assignment is done, how can I have confidence that the final number is legitimate? (Go to list of questions)

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

The appraisal contained an apropos analysis of the data.

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

That appraisal services were not executed in a careless or negligent fashion.

That a trustworthy, substantiated appraisal report was communicated.

To become a state licensed appraiser, we must satisfy intense education and experience requirements that train us to produce an unbiased opinion. In addition, appraisers must stick to a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for developing an appraisal and documenting its results are insured 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 are different from state to state. In general, licensing and certification is most often associated with many hours of coursework, tests and practical experience. Once licensed, he or she is required to engage in continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who are an appraiser's customers? (Go to list of questions)

Commonly, appraisers are hired by mortgage lenders to estimate the value of real estate involved in a loan transaction. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does The Jones Group get the data used to estimate values in San Diego County or other areas? (Go to list of questions)

One of the most important activities of an appraiser is to gather property data. Data can be described as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.

General data is gathered from a number of places. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. Tax records and other public documents verify actual sales prices in a market. Appraisers often have to report when a property lies in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And most importantly, the appraiser assembles general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.

What can a full appraisal do for me? (Go to list of questions)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. When selling your house, an appraisal helps you set a price that maximizes profit and reduces time on the market. When buying, you can avoid 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 home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

What exactly is PMI and how can I get rid of it? (Go to list of questions)

PMI stands for Private Mortgage Insurance. This additional policy guards the lender if a borrower defaults on the loan and the value of the home is lower than what is owed on the loan. 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.


	Is PMI a part of your monthly house payment?Call The Jones Group today at (858) 487-5150 or send us an e-mail. A current appraisal could save you thousands.

Does the appraiser need anything from me in advance? (Go to list of questions)

We start 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. On the home's interior, make sure it is clutter free and that we can access things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of outside walls.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:

A survey or plot map of the property and building (if readily available).
Title policy that describes encroachments or easements.
Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
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 (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? (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 bundled with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner hires an appraiser directly. In these scenarios, the appraiser may stipulate how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.

I want to get more for my house. Where should I spend money renovating? (Go to list of questions)

A home's location - what city it is in and even what part of that city - is key to this popular question. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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, returning 85%. Adding bedrooms and baths can also help the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.