Klein Appraisals, LLC has answers to "Frequently Asked Questions"


	Klein Appraisals, LLC is prepared to address any questions you might have about appraisals or real estate in Baltimore County. Don't hesitate to contact us today.

Define the term "Appraisal"
What does an appraiser do?
What are the reasons I would need your services?
What is the difference between an appraisal and a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
Upon completion of the appraisal, what assurance is there that the value indicated is legitimate?
What does it mean for an appraiser to be licensed?
Who employs appraisers?
Where does Klein Appraisals, LLC get the data used to estimate values in Baltimore County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
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" (List of questions)

The process of performing an appraisal report deals with an evaluation which forms an opinion of value. The real estate appraiser will use a few "approaches," typically three, to conclude the estimation of market value. One of the methods in use is the Cost Approach, which finds what it would cost to replace the improvements to the property, less the age and physical deterioration, adding the land value. The Sales Comparison Approach involves searching for comparable properties nearby and discerning value based on making a comparison of those prior sales to the house in question. The Sales Comparison Approach is normally the most accurate and clearest indicator of value for a home. The Income Approach is mainly used for finding the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.

What does an appraiser do? (List of questions)

An appraiser produces an unbiased and well substantiated assessment of market value, in the support of real estate exchanges. Appraisers illustate their analysis in appraisal reports.

What are the reasons I would need your services? (List of questions)

There are many reasons to purchase an appraisal from Klein Appraisals, LLC with the usual reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal include:

To receive a loan.
To reduce your property taxes.
To demonstrate a homeowner's acquired equity and remove insurance.
To fight improperly assessed property taxes.
To settle an estate.
To give you a negotiating tool when purchasing a home.
To find the most probable sales price when selling real estate.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Because an official agency such as the IRS requires it.
It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.

Click here for a more detailed explanation of the process of getting an appraisal.

What is the difference between an appraisal and a home inspection? (List of questions)

Home inspectors do not estimate an opinion of value and are not appraisers. The purpose of a home inspection is to investigate the structure of the house from basement to rooftop. Generally, a home inspection report will explain the amenities and the requirements of the property: 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, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

What is the difference between an appraisal and a comparative market analysis (CMA)? (List of questions)

Honestly, they have nothing in common. The CMA relies on vague trends in the market. An appraisal is based on comparable sales that can be verified by records. Location and architectural values are also a priority in an appraisal. 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.

Who's behind the report is hands down the most significant difference between a CMA and an appraisal. 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. A certified, state licensed professional who bases a career on valuing homes in and around Baltimore 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 accept a previously agreed upon fee for work they perform, regardless of their outcome.

What are the contents of an appraisal report? (List of questions)

The main purpose 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, you'll usually see the following:

The client and whose purposes the appraisal is to serve.
The intended use of the report.
The appraisal's purpose.
The type of value reported and a definition of that value.
The effective date of the value opinion.(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 attributes, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed 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.
What was entailed in the process of completing the assignment.

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

Upon completion of the appraisal, what assurance is there that the value indicated is legitimate? (List of questions)

In communicating an appraisal report, each appraiser must make sure of the following:

That the information analysis contained in the appraisal was proper.

Whether individually or collectively, there were no significant errors contained in the appraisal, nor any relevant details left out.

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

That a solid, defensible appraisal report was communicated.

There are intense education and practical experience requirements that must be fulfilled in order to achieve the status of "licensed appraiser" in Maryland. Likewise, appraisers must stick to 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 guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(List of questions) Licensing and certification is achieved through classroom study, tests and real world experience. Once licensed, he or she must then engage in continuing education courses so the license remains current. To see the specific requirements for any state click here.

Who employs appraisers? (List of questions)

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

Where does Klein Appraisals, LLC get the data used to estimate values in Baltimore County or other areas? (List of questions)

One of the primary activities of an appraiser is to assimilate property data. Data can be classified as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.

General data is gathered from a numerous sources. To research recently sold homes to be used as "comps", we often use the local Multiple Listing Service. To verify actual sales prices, we use items in the assessor's office and other public documents. Flood zone data is available 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 past experience in creating appraisals for other properties in the same market.

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

An appraisal is a valuable tool whenever your home's value is pertinent to some financial decision. If you're selling your house, an appraisal will help you determine a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from Klein Appraisals, LLC is the best way to ensure assets are split up evenly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making informed financial decisions.

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

PMI is the common abbreviation for for Private Mortgage Insurance. It protects the lender in case a borrower defaults on the loan and the value of the property is lower than the balance of 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.


	Has your real estate appreciated since you first purchased? Contact Klein Appraisals, LLC today at 410-560-6395 to see if you can get rid of your Private Mortgage Insurance premium.

How do I get ready for the appraiser? (List of questions)

The first step in most appraisals is the home inspection. 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 status of its amenities. 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.

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 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.
Title policy that describes encroachments or easements.
A list of any major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
Information on "Homeowners Associations" or condominium covenants and fees.

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

In real estate appraising, 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? (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 appraisal - it's usually bundled 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 situations, the appraiser may state 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.

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

This really depends on where the home is. 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 best ROI from renovating a home comes in the kitchen. 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 were second, yielding 85%. On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.