Jensen Appraisals Inc has answers to "Frequently Asked Questions"

Jensen Appraisals Inc is always willing to reply to any concerns you might have about appraisals in Palm Beach Gardens and Palm Beach County. Contact us today to see how we can help you with your specific valuation problems.

Describe an appraisal
What does an appraiser do?
Why would someone require services from Jensen Appraisals Inc?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
Once the assignment is done, what guarantee is there that the value indicated is accurate?
What are the requirements to be a certified appraiser?
Who are an appraiser's customers?
Where does Jensen Appraisals Inc get the information used to estimate values in Palm Beach County or other areas?
What can a full appraisal do for me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal appointment
Define "Market Value"
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?



Describe an appraisal   (Top)

The process of performing an appraisal report deals with an investigation which leads to an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or estimate. One of the three is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value. The Sales Comparison Approach involves finding comparable properties in the vicinity and figuring out the value based on making a comparison of those houses to the property in question. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a home. The Income Approach is mainly used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in.

What does an appraiser do?   (Top)

An appraiser offers a fair and credible opinion of market value, often in the context of a real estate exchange. Appraisers illustate their expert findings in appraisal reports.


Why would someone require services from Jensen Appraisals Inc?   (Top)

There are many reasons to get an appraisal from Jensen Appraisals Inc with the most common reason being real estate and mortgage transactions. Some other reasons for purchasing an appraisal include:
  • If you are applying for a loan.
  • To lower your property taxes.
  • To show a homeowner has 30% equity and remove PMI.
  • To challenge improperly assessed property taxes.
  • If you need to settle an estate.
  • To offer you an edge when purchasing real estate.
  • To find the most probable price when listing your home.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS require an appraisal on every house.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.
For a more detailed description of the appraisal process click here.


How is an appraisal different than a home inspection?   (Top)

Home inspectors do not produce an opinion of value and do not use the same forms as appraisers. The point of a home inspection is to evaluate the structure of the property from basement to rooftop. The stereotypical property inspector's report will contain an evaluation of the condition of the house's heating systems, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

Is an appraisal the same as a comparative market analysis(CMA)?   (Top)

Frankly, it's like comparing Shakespeare to reality TV. The CMA relies on indefinite market trends. An appraisal is based on comparable sales that can be verified by public record. Also, the appraisal checks other factors like condition, location and building prices. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the biggest difference is who's doing the report. 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 has formed a career on valuing homes in and around Palm Beach County creates the appraisal. Moreover, the appraiser is an unbiased party, with no conditional interest in the value conclusion, unlike the real estate agent, who gets a commission based upon the value of the home.

What's in an appraisal report?   (Top)

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, one will customarily see the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The purpose of 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!)
  • Pertinent property attributes, including: location, physical characteristics, legal attributes, economic factors, the property rights in question, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible factors.
  • Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and other items of a similar nature.
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • The scope of work considered to complete the job.
For a more detailed look at all that goes into an appraisal report click here: Sample Appraisal Report


Once the assignment is done, what guarantee is there that the value indicated is accurate?   (Top)

In the documentation of an appraisal, each appraiser must make sure of the following:
  • That the information analysis implemented in the appraisal was suitable.

  • Whether individually or collectively, there were no critical errors contained in the report, nor any material details left out.

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

  • That a believable, supportable appraisal report was imparted.
To become a state licensed appraiser, there are strenuous education requirements as well as on the jobexperience that must be logged - all with the end goal of gaining the skills required to render unbiased value opinions. Likewise, appraisers must stick to a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for carrying out an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Top) Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. In general, licensing and certification is most often associated with many hours of classroom study, tests and experience working under a supervisory appraiser. Once licensed, he/she must then complete continuing education courses in order to keep the license current. To see the specific requirements for any state click here.

Who are an appraiser's customers?   (Top)

Mortgage lenders are an appraiser's most likely customer, requiring their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does Jensen Appraisals Inc get the information used to estimate values in Palm Beach County or other areas?   (Top)

One of the primary things an appraiser does is to collect property data. Data can be split into Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is gathered from a numerous sources. To look up recently sold homes to be used as "comps", we typically use the local Multiple Listing Service. To double-check actual sales prices, we research tax records and other public documents. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood service.

And last but not least, the appraiser assimilates general data from his or her past experience in creating appraisals for other houses in the same market.


What can a full appraisal do for me?   (Top)

An appraisal is a valuable tool anytime your home's value is pertinent to a financial decision. For those selling a home, you'll want to determine a 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 those settling an estate or divorce, an appraisal from Jensen Appraisals Inc is the best way to ensure assets are divided fairly. A house 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?   (Top)

PMI is the common abbreviation for for Private Mortgage Insurance. PMI guards the lender in case a borrower doesn't pay on the loan and the market price of the property is less than what is owed on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

Has your real estate appreciated since you first purchased? Call Jensen Appraisals Inc today at 561-625-6933 to see if you can save money by removing your Private Mortgage Insurance payment.

Should I do anything in advance of the appraisal appointment   (Top)

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 status of its features. Inside, pick up any clutter and make sure we can access things like furnaces and water heaters. In the yard, 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:
  • Any records on the purchase of the property for the last three years.
  • Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
  • Most recent real estate tax bill from Palm Beach and or legal description of the property.

Define "Market Value"   (Top)

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."



Does the appraisal belong to the bank or the consumer?   (Top)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. 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 engaging 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 do whatever they want with the appraisal.


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

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

As a rule, the best ROI 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 were second, returning 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size.