WalshStreet Inc. has answers to "Frequently Asked Questions"


	WalshStreet Inc. is willing to elaborate on any inquiries you might have about appraisals in Los Angeles and Los Angeles County. Contact us today to see how we can help solve your specific valuation problems.

Define the term "Appraisal"
What does an appraiser do?
What would cause me to require a real estate appraisal?
How is an appraiser different than a home inspector?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What's in an appraisal report?
Upon completion of the report, what guarantee is there that the value indicated is trustworthy?
How are appraisers certified?
Who engages the services of appraisers?
Where does WalshStreet Inc. get the information used to estimate values in Los Angeles 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
What is "Market Value?"
Who actually owns the appraisal report?
Are some home improvements more worthwhile than others?

Define the term "Appraisal" (Return to top)

The process of creating an appraisal consists of an investigation which leads to 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 real estate appraisers use to find the value of a property; it involves discerning what the improvements would cost without physical deterioration, plus the land value. Easily the most common approach in finding the value of a house is the Sales Comparison Approach which deals with making a comparison to similar homes close by. Being the most popular approach, the Sales Comparison Approach is generally the most accurate and best indicator of market value for a home. The Income Approach is mainly used for determining the market value of income-producing properties based on what an investor would pay based on the amount of income a property produce.

What does an appraiser do? (Return to top)

An appraiser offers an unprejudiced and well justified opinion of market value, to be used in making real estate transactions. Appraisers reveal the details of their professional conclusions in appraisal reports.

What would cause me to require a real estate appraisal? (Return to top)

There are many reasons to order an appraisal from WalshStreet Inc. with the most common reason being real estate and mortgage transactions. Other reasons for obtaining an appraisal report include:

If you are applying for a loan.
To lower your property taxes.
To demonstrate a homeowner's acquired equity and remove PMI.
To fight inflated property taxes.
If you need to take care of an estate.
To provide you a leg-up when purchasing real estate.
To find the most probable sales price when listing your home.
To ensure parties are provided just compensation in eminient domain cases.
Because an official agency such as the IRS requires it.
If you are ever involved in a civil case.

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

How is an appraiser different than a home inspector? (Return to top)

The appraiser is not a home inspector nor does he/she do a complete home inspection. A third-party home inspector will evaluate the structure of the property, from the roof to the bottom. The usual house inspector's report will contain an evaluation of the condition of the home's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible insulation, walls, ceilings, floors, windows and doors, the foundation, basement, and visible structure.

What is the difference between an appraisal and a comparative market analysis (CMA)? (Return to top)

To be blunt, it's like comparing opera to country. The CMA relies on indistinct trends in the market. An appraisal is based on comparable sales that can be verified by records. Area and architectural values are also precedent 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.

The person behind the report is hands down the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Moreover, the appraiser is an unbiased voice, with no vested interest in the property's value, unlike the agent, whose income is tied to the price of the home.

What's in an appraisal report? (Return to top)

Every report must reflect a supported estimate of value and will identify the following:

The client and other intended users.
The intended use of the appraisal.
The appraisal's purpose.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the value opinion.
Relevant property attributes, including: location, physical attributes, legal attributes, economic factors, the property rights valued, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible items.
All 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.
What was entailed in the activity of completing the assignment.

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

Upon completion of the report, what guarantee is there that the value indicated is trustworthy? (Return to top)

In the documentation of an appraisal, each appraiser must ensure the following:

That the information analysis utilized in the appraisal was proper.

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

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

The final appraisal report was easy to explain, credible and conclusive.

There are intense education and on the job experience requirements that must be fulfilled in order to achieve the status of "licensed appraiser" in California. Likewise, appraisers must stick to a strict industry code of ethics and respect national standards of practice for real estate appraisal. The rules for working up an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Return to top) Licensing and certification is achieved through classroom study, tests and practical experience. Once an appraiser is licensed, he or she is required to engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who engages the services of appraisers? (Return to top)

Most of the time, 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 indeed adequate collateral for the loan. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does WalshStreet Inc. get the information used to estimate values in Los Angeles County or other areas? (Return to top)

Compiling data is one of the primary occupations of an appraiser. Data can be classified as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is collected from a numerous sources. To look up recent sales to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood product.

And last but not least, the appraiser assembles general data from his or her past experience in doing assignments for other properties in the same market.

How can a licensed appraiser help me? (Return to top)

An appraisal is a valuable tool whenever the value of your home is relevant to some 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. When buying, you can avoid overpaying by getting an independent appraisal. For parties settling an estate or divorce, an appraisal from WalshStreet Inc. is the best documentation to ensure assets are split up evenly. Simply put, a home is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.

What exactly is PMI and how can I get rid of it? (Return to top)

PMI is short for for Private Mortgage Insurance. This additional plan guards the lender in case a borrower is unable to pay on the loan and the market price of the house is lower than the loan balance. 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 have a lineitem for PMI?Call WalshStreet Inc. today at 323-936-9970 or send us an e-mail. Documentation of your home's current value could save you thousands.

Should I do anything in advance of the appraisal inspection (Return to top)

We begin with an inspection of the home. During this process, the appraiser will come to your home and measure it, determine the layout of the rooms inside, confirm all aspects of the home's general condition, and take several photos of your house for inclusion in the report. The best thing you can do to help is make 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. Indoors, make sure the appraiser can get to appliances like furnaces and water heaters.

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

Written property agreements, such as a maintenance agreement for a shared driveway.
Title policy that describes encroachments or easements.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
A list of "proposed" improvements when the property is being appraised "as complete".

What is "Market Value?" (Return to 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."

Who actually owns the appraisal report? (Return to top)

For mortgage transactions, the lender requests 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 entitled to a copy of the appraisal - 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 engages an appraiser directly. 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 do whatever they want with the appraisal.

Are some home improvements more worthwhile than others? (Return to top)

It really depends on the market. 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 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, work that may not add value would be painting just for the sake of redecorating.