Accurate Appraisal of Missouri, Inc. has answers to "Frequently Asked Questions"

Accurate Appraisal of Missouri, Inc. is always prepared to address any inquiries you might have about appraisals or real estate in Buchanan County. Feel free to contact us today.

Describe an appraisal
What does an appraiser do?
What would cause me to request your services?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
After completing the appraisal, what assurance is there that the value conclusion is valid?
How hard is it to become certified?
Who engages the services of appraisers?
Where does Accurate Appraisal of Missouri, Inc. get the information used to estimate values in Buchanan County or other areas?
Why do I need a professional appraisal?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Does the appraiser need anything from the homeowner in advance?
How does an appraiser define "Market Value"?
Once complete, who actually owns the appraisal report?
Which home renovations add the most to the price?



Describe an appraisal   (Go to list of  questions)

The procedure of producing an appraisal consists of an evaluation which leads to an opinion of value. The real estate appraiser will use a number of "approaches," typically three, to arrive at the estimation of market value. One of the processes in use is the Cost Approach, which finds what it would cost to replace the improvements to the house, minus depreciation and physical dilapidation, adding the land value. Another of the methods is the Sales Comparison Approach - which concerns discovering a comparable analysis to other similar nearby properties which have recently sold. Being the most popular approach, the Sales Comparison Approach is considered the most precise and best indicator of market value for a property. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it involves estimating what an investor would pay based on the money produced by the property.

What does an appraiser do?   (Go to list of  questions)

An appraiser produces an unbiased and well justified determination of market value, often in the context of a real estate sale. Appraisers present their professional findings in appraisal reports.


What would cause me to request your services?   (Go to list of  questions)

There are many reasons to order an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for obtaining an report include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax obligations.
  • To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
  • To fight improperly assessed property taxes.
  • To handle an estate.
  • To offer you a negotiating tool when purchasing real estate.
  • To determine a reasonable sales 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 home.
  • If you ever find yourself in a lawsuit.
If you need more information about the appraisal process, please click here.


How is an appraisal different than a home inspection?   (Go to list of  questions)

Home inspectors do not estimate an opinion of value and are not appraisers. An inspection is a third-party investigation of the livable structure and appliances of a property, from the top to the bottom. The general home inspector's report will include an evaluation of the integrity of the property's heating systems, 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.

Is an appraisal the same as a comparative market analysis(CMA)?   (Go to list of  questions)

To be honest, they have nothing in common. The CMA relies on indistinct trends in the market. The appraisal depends on similar verifiable comparable sales. Area and construction values are also precedent in an appraisal. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

The credentials of the person creating the report is frankly the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA's. A certified, state licensed professional who has formed their livelihood on valuing homes in and around Buchanan County creates 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 collect only a flat sum for assignments, regardless of their outcome.

What can I expect to see in my appraisal report?   (Go to list of  questions)

Every report must indicate a believable value opinion and will clearly state the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • The intended use of the report.
  • The reason for the appraisal.
  • The type of value reported and a definition of that value.
  • The effective date of the appraisal.(Sometimes this is in the past or maybe the future for new construction!)
  • Relevant property attributes, including: location, physical description, legal attributes, economic factors, the real property interest 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 included in the process of completing the assignment.
For a more detailed look at all that goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, what assurance is there that the value conclusion is valid?   (Go to list of  questions)

In the documentation of an appraisal, each appraiser must make sure of the following:
  • The appraisal contained an apropos analysis of the information.

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

  • That appraisal services were done in a careful and judicious manner.

  • That a solid, supportable appraisal report was conferred.
There are rigorous classroom and real world experience requirements that must be fulfilled in order to get an appraisal license in Missouri. Plus, appraisers must stick to a strict industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for carrying out an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Go to list of  questions) Licensing and certification requires coursework, tests and experience working under a supervisor. Once an appraiser is licensed, he/she is required to take continuing education courses so the license remains up to date. To see the specific requirements for any state click here.

Who engages the services of appraisers?   (Go to list of  questions)

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

Where does Accurate Appraisal of Missouri, Inc. get the information used to estimate values in Buchanan County and surrounding areas?   (Go to list of  questions)

One of the main things an appraiser does is to collect property data. Data can be described as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser while on site.

General data is collected from a numerous places. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood product.

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

Why do I need a professional appraisal?   (Go to 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 house, an appraisal helps you set a price that maximizes profit and reduces time on the market. When buying, be sure you're not overpaying by getting an independent appraisal. For parties settling an estate or divorce, an appraisal from Accurate Appraisal of Missouri, Inc. is the best way to ensure assets are divided evenly. Simply put, 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?   (Go to list of  questions)

PMI stands for Private Mortgage Insurance. PMI covers the lender if a borrower is unable to pay on the loan and the value of the property is less than what the borrower still owes on the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.

Has your home value appreciated since you first purchased? Contact Accurate Appraisal of Missouri, Inc. today at (816) 233-1883 to see if you can cancel your Private Mortgage Insurance payment.

Does the appraiser need anything from the homeowner in advance?   (Go to list of  questions)

The first step in most appraisals is the home inspection. 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 exterior 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 available).
  • Any paperwork, 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, your septic system and wells.
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
  • A list of "suggested" improvements if the property is to be appraised "as complete".

How does an appraiser define "Market Value"?   (Go to list of  questions)

In real estate appraising, Market Value (as opposed to Fair 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."

Once complete, who actually owns the appraisal report?   (Go to list of  questions)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. 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 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 engaging the appraiser for things outside securing a mortgage. In these cases, 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.

Which home renovations add the most to the price?   (Go to list of  questions)

Like all things real estate, this is dependent on a home's location. 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

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%. On the contrary, something that may not add value would be painting just for the sake of redecorating.