Frequently Asked Questions
What is an appraisal?
An appraisal is the act or process of developing an opinion of fair estimate of value for real property which is in most cases a written document.
Do I need an appraisal?
If you’re buying or selling, insuring or making a claim, financing, grieving property taxes, probating a will, settling a lawsuit or divorce, involved in bankruptcy, dissolution, or other litigation.
What is a difference between written appraisal report and BPO (Broker Price Opinion)
BPO’s will NOT substitute a written report from certified appraiser in any litigation.
How does the appraiser determine market value?
Three common approaches, all derived from the market are used. The Cost Approach is what it would cost to replace or reproduce the improvements as of the date of the appraisal, adjusting for deterioration and obsolescence. The Sales Comparison Approach (most common) compares the subject properties to others of similar size, quality, and location that have sold recently (usually within 12 months’ period). The Income Approach together with Sales Comparison Approach, used primarily for small income producing properties 1-4 units, looks at what a prudent investor would pay based on a wide range of factors.
What factors does the appraiser consider?
For most properties style, age, overall condition, size and quality of construction are important. Other factors that influence market value, such as neighborhood, location, proximity to schools, zoning, comparable sales, design, and floor plan are also considered. With regard to income-producing properties, more complex criteria including quantity, quality and durability of the net income stream (income after all expenses) condition of improvements, and replacement costs are considered as well.
What’s included in a typical appraisal report?
Industry standards accept a narrative or form report on all residential properties. All the reports contain facts and analyses of the subject property, the neighborhood, and the market. Most contain exhibits, including photographs of the subject and comparable properties, a detailed scaled sketch of the subject, a map showing the subject in relation to the comparable data and a flood map (if located in a flood zone) showing the subject. All appraisal reports contain a Statement of Limiting Conditions and Appraiser’s Certification.
Bunker Hill Appraisal Co. provides our clients with a different report types, depending on the extent of their need to have detailed information. The more detailed the report the higher the more time and analysis is needed hence the cost increases.
Besides the inspection, where does the appraiser get data?
The appraiser takes information from a wide variety of sources, including the Multiple Listing Service, tax assessor’s records, real estate professionals, county courthouse records, private data vendors, interviews with sellers and buyers, appraisal data base, personal knowledge, and in-house files from previous appraisals.
How much does an appraisal cost?
The cost varies primarily with the complexity of the assignment as well as its location and the timing requirements of the client.
Standard appraisal fee ranges from $350.00 – $450.00 per assignment and usually based on subject property livable space (not including basement area) and other factors. Livable space (also known as GLA) should range within 1/sf – 3,500/sf of GLA.
Additional fee will apply for the expedited service and/or properties that are over 3,500/sf in GLA.
Standard appraisal fee does not include expert witness testimony and/or work with an attorney or accountant.
These cervices usually are billed as per hourly or as a lump sum.
Please contact us for a free analysis and fee estimate.
Who does the appraiser work for?
If you mean “Who can influence the outcome?” the answer is no one. Professional ethics (USPAP) demand the same outcome — an unbiased, independent and accurate appraisal — no matter who orders or pays for it. If you mean, “Who does the appraiser report to?” the answer is to the party who ordered the report, regardless of who pays for it. Moreover, the appraiser will not discuss the appraisal with anyone other than the person who ordered it, unless otherwise instructed. If your lender ordered the report, you are entitled to a copy and it should be requested prior to settlement.
What is USPAP?
USPAP is the Uniform Standards of Professional Appraisal Practice, the code of ethics written by the Appraisal Foundation, which Congress authorized as the source of appraisal standards and appraiser qualifications. By relying on USPAP, an appraiser can produce appraisals — analyses, opinions, and advice — in a manner meaningful to you and not misleading in the marketplace. The current USPAP is available online.
What qualifications are appraisers required to have?
Pennsylvania states require that all real estate appraisers are state certified and have fulfilled education and experience requirements. They must adhere to strict industry standards and a professional code of ethics as mandated by the Appraisal Foundation. All appraisers at Bunker Hill Appraisal Co. are state certified and go through additional educational requirements every 2 year.
I hope we have answered all of your questions.
If you have any other questions or concerns, please don’t hesitate to contact us.