Boxberger Appraisals has answers to "Frequently Asked Questions"


	Boxberger Appraisals is more than happy to address any questions you might have about appraisals or real estate in Santa Clara County. Contact us today to see how we can help you with your specific valuation problems.

What is an appraisal?
What does an appraiser do?
What are the reasons a person would require services from Boxberger Appraisals?
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's in an appraisal report?
Once the appraisal is done, what assurance is there that the value conclusion is legitimate?
How difficult is it to become certified?
Who employs appraisers?
Where does Boxberger Appraisals get the information used to estimate values in Santa Clara County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
How does an appraiser define "Market Value"?
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?

What is an appraisal? (List of questions)

An appraisal is an investigation allowing the appraiser to come to an opinion of value. This opinion or estimate is discerned by using a formal method that generally utilizes three "common approaches to value". One of the processes in use is the Cost Approach, which is what it would cost to replace the improvements to the home, less the depreciation and physical deterioration, adding the land value. The Sales Comparison Approach deals with searching for similar houses in the vicinity and figuring out the value based on comparing those homes to the property in question. Usually, the Sales Comparison Approach is the most definite indicator of market value of a house. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it deals with estimating what an investor would pay based on the income generated by the property.

What does an appraiser do? (List of questions)

An appraiser provides an unbiased and well justified opinion of market value, often in the context of a real estate purchase. Appraisers present their professional analysis in appraisal reports.

What are the reasons a person would require services from Boxberger Appraisals? (List of questions)

There are a lot of reasons to get an appraisal from Boxberger Appraisals with the most common reason being real estate and mortgage transactions. Some other reasons for purchasing an appraisal include:

To receive a loan.
To lower your tax burden.
To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
To contest improperly assessed property taxes.
To settle an estate.
To offer you a leg-up when purchasing real estate.
To find a reasonable property value when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Because a government agency such as the IRS requires it.
If you are ever involved in a civil case.

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

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

Appraisers do not do provide residential property inspections and are not home inspectors. An inspection is a third-party investigation of the livable structure and electrical and mechanical systems of a house, from the top to the bottom. For the most part, a home inspection report will evaluate 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, 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)

To be blunt, it's apples and oranges. The CMA relies on indefinite local market trends. An appraisal is based on comparable sales that can be validated by public record. In addition, the appraisal looks at other factors like condition, location and building prices. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the largest differentiator is the person behind the report. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, state licensed professional who made a career on valuing real estate in and around Santa Clara County creates the appraisal. Further, the appraiser is an independent party, with no conditional interest in the property's value, unlike the agent, who gets a commission based upon the value of the home.

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

The main purpose of an appraisal document 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 whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The appraisal's purpose.
The type of value reported and a definition of the value reported.
The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
Pertinent property characteristics, including: location, physical characteristics, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible items.
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 included in the activity of completing the job.

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

Once the appraisal is done, what assurance is there that the value conclusion is legitimate? (List of questions)

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

The appraisal used an apropos analysis of the data.

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

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

The final appraisal report was easy to explain, sound and not easily discredited.

To become a state licensed appraiser, there are intense education requirements as well as experience that must be logged. Likewise, appraisers must stick to a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for developing 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 coursework, tests and real world experience. Once licensed, he/she must then complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers? (List of questions)

Typically, appraisers are employed by mortgage lenders to render a value opinion on a home involved in a loan transaction - to make sure the property is truly adequate collateral for the loan. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does Boxberger Appraisals get the information used to estimate values in Santa Clara County or other areas? (List of questions)

Gathering data is one of the primary things an appraiser does. Data can be described as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.

General data is collected from a number of places. To find out about recent sales to be used as "comps", we typically go to the local Multiple Listing Service. To double-check actual sales prices, we use items in the assessor's office and other public documents. Appraisers routinely 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 service.

And most importantly, the appraiser assimilates general data from his or her past experience in creating appraisals for other properties in the same market.

How can a licensed appraiser help me? (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. If you're selling your home, an appraisal assists you in setting the most appropriate price. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. 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? (List of questions)

PMI stands for Private Mortgage Insurance. This additional policy covers the lender in the event a borrower doesn't pay on the loan and the market price of the home is lower than the balance of the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	Does your monthly mortgage payment include a fee for PMI?Call Boxberger Appraisals today at (408) 394-6984 or send us an e-mail. A current appraisal could save you thousands.

Should I do anything in advance of the appraisal inspection (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. 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 (gates aren't locked, etc). Trim any bushes and move any items that would make it difficult to measure the structure. On the inside, make sure the appraiser can easily access items like furnaces and water heaters.

You can make our visit go faster and improve the quality of the appraisal report by having the following things on hand:

Information on the latest purchase of the property in the last three years.
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.
A bill for your most recent real estate taxes which should also contain a 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).
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

How does an appraiser define "Market Value"? (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 has rights to 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 entitled to a copy of the appraisal - 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 scenarios, 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.

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, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.

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.