McDonough Appraisal Service has answers to "Frequently Asked Questions"

McDonough Appraisal Service is always eager to handle any questions you might have about appraisals in Los Angeles County. Contact McDonough Appraisal Service today to learn 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 request a real estate appraisal?
How is an appraiser different than a home inspector?
My agent performed a CMA for me. Is that the same as an appraisal?
What are the contents of an appraisal report?
Once the report is done, what assurance is there that the value indicated is accurate?
How hard is it to become certified?
Who engages the services of appraisers?
Where does an appraiser get the data used to estimate values in Los Angeles 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 is "Market Value?"
Who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?



What is an appraisal?   (Top)

An appraisal is an evaluation allowing the appraiser to come to an opinion of value. This opinion or estimate is figured through the use of a formal method that commonly uses the three main "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 property, less the age and physical deterioration, adding the land value. The most common approach in figuring the value of a home is the Sales Comparison Approach which deals with concluding a comparison to comparable houses nearby. Being the most popular approach, the Sales Comparison Approach is generally the most accurate and best indicator of market value for a residence. One of the least common approaches in appraising houses is the Income Approach, which is generally used to figure the value of a property based on what an investor would pay based on the capital produced by the property.

What does an appraiser do?   (Top)

An appraiser offers an objective and well justified determination of market value, to be used in making real estate transactions. Appraisers summarize their expert analysis in appraisal reports.


What are the reasons a person would request a real estate appraisal?   (Top)

There are many reasons to get an appraisal from McDonough Appraisal Service with the usual reason being real estate and mortgage transactions. Other reasons for getting an appraisal report include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax obligations.
  • To build a case for a homeowner's equity and remove insurance.
  • To challenge improperly assessed property taxes.
  • If you need to settle an estate.
  • To give you a leg-up when purchasing a home.
  • To figure out the most probable property value when selling your home.
  • To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Government agencies such as the IRS need an appraisal on every home.
  • If you are ever involved in a civil case.
If you need more information regarding the appraisal process, please click here.


How is an appraiser different than a home inspector?   (Top)

Appraisers do not do perform residential property inspections and are not home inspectors. The purpose of a home inspection is to evaluate the structure of the house from bottom to attic. The archetypal home inspector's report will include an evaluation of the integrity of the home's heating system, 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.

My agent performed a CMA for me. Is that the same as an appraisal?   (Top)

Frankly, it's like comparing opera to country. The CMA utilizes market trends to conduct most of their business. An appraisal utilizes comparable sales that can be validated by records. In addition, the appraisal verifies other factors like condition, neighborhood and building costs. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the most significant factor is who's creating the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. A certified, state licensed professional who made a career on valuing properties in and around Los Angeles County is behind the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to accept a flat sum for work they perform, regardless of their outcome.

What are the contents of an appraisal report?   (Top)

Every appraisal must reflect a credible estimate of value and must identify the following:
  • Who engaged the appraiser and other intended users.
  • The intended use of the report.
  • The appraisal's purpose.
  • The type of value reported and a definition of the value reported.
  • The effective date of the appraiser's opinions and conclusions.
  • Pertinent property attributes, including: location, physical description, legal attributes, economic attributes, the property rights valued, 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 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 job.
For a more comprehensive view of what goes into an appraisal report click here: Sample Appraisal Report

Once the report is done, what assurance is there that the value indicated is accurate?   (Top)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • The appraisal used analysis of the information.

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

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

  • That a credible, substantiated appraisal report was conferred.
To become a state licensed appraiser, we must satisfy extensive education and experience requirements that enable us to formulate an unbiased opinion. Plus, appraisers must obey a strict industry code of ethics and observe national standards of practice for real estate appraisal. The rules for carrying out an appraisal and communicating its results are guaranteed 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. However, licensing and certification is most often associated with many hours of 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 engages the services of appraisers?   (Top)

Mortgage lenders are an appraiser's typical customer, requiring their services to ensure property involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does an appraiser get the data used to estimate values in Los Angeles County or other areas?   (Top)

One of the primary activities of an appraiser is to collect property data. Data can be classified as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.

General data is received from a numerous sources. To look up recent sales to be used as "comps", we often use the local Multiple Listing Service. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood system.

And last but not least, the appraiser gathers general data from his or her collective knowledge gained from doing assignments for other properties in the same market.

Why do I need a professional appraisal?   (Top)

An appraisal is a worthwhile anytime your home's value is relevant to a financial decision. If you're selling your home, an appraisal will help you determine the most appropriate price. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from McDonough Appraisal Service is the best documentation to ensure assets are split up fairly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making the right financial decisions.

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

PMI stands for Private Mortgage Insurance. This added policy covers the lender in case a borrower defaults on the loan and the value of the house is lower than what is owed on 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.

The amount you keep from dropping the PMI required when you got your mortgage will make up for the cost of the appraisal in a matter of months. McDonough Appraisal Service is a name you can trust when it comes to value trends in Lancaster and Los Angeles County. Contact us today.

How do I get ready for the appraiser?   (Top)

The first step in most appraisals is the home inspection. 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. On the home's interior, pick up any clutter and make sure we can get to things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of outside walls.

You can make our visit go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • A plot plan or survey of the house and land (if readily 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.
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.
  • 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".

What is "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."

Who actually owns the appraisal report?   (Top)

In most real estate transactions, the appraisal is ordered by the lender. While the buyer pays for the report as part of the closing costs, the lender retains the right to use the report or any information contained within. The buyer is entitled to a copy of the report - 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.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these situations, the appraiser may define 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.

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

This really depends on where the home is. 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.

No matter where you go, however, renovating a kitchen is almost always a safe move. 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 are right up there with kitchens, returning 85%. Adding bedrooms and baths can also boost the value of your home (when done well) as long as your home doesn't then become atypical for your neighborhood in terms of size.