Howard K. Beeco has answers to "Frequently Asked Questions"


	Howard K. Beeco is more than happy to talk to you about any inquiries you might have about appraisals in Pennsburg and Montgomery County. Feel free to contact us today.

Describe an appraisal
What does an appraiser do?
What would cause me to request your services?
What is the difference between an appraisal and a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What can I expect to see in my appraisal report?
Once the appraisal is done, what assurance is there that the value indicated is trustworthy?
How hard is it to become certified?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in Montgomery County or other areas?
What can a full appraisal do for me?
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?
Which home renovations add the most to the price?

Describe an appraisal (Go to list of questions)

The appraisal process is an estimation that produces an opinion of value. The appraiser will use a few "approaches," typically three, to conclude the estimation of market value. The Cost Approach is one of the approaches that real estate appraisers use to find value; it involves finding what the improvements would cost less physical deterioration, adding the land value. The most common approach in figuring the likely sales price of a house is the Sales Comparison Approach which concerns making a comparison to comparable properties close by. Being the most popular approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a home. 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 a professional, unbiased determination of market value, to be used in making real estate transactions. Appraisers document their expert findings in appraisal reports.

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

There are a lot of reasons to order an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for getting an report include:

To get a loan.
If you would like to reduce your property tax burden.
To demonstrate a homeowner's acquired equity and remove insurance.
To challenge high property taxes.
If you need to settle an estate.
To give you a negotiating tool when purchasing real estate.
To determine an honest price when listing your home.
To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
Because an official agency such as the IRS requires it.
If you ever find yourself in a civil case.

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

What is the difference between an appraisal and a home inspection? (Go to list of questions)

Appraisers do not do perform house inspections and are not home inspectors. An inspection is a third-party investigation of the accessible structure and systems of a property, from the roof to the bottom. The stereotypical property inspector's report will include 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.

My agent performed a CMA for me. Is that the same as an appraisal? (Go to list of questions)

Frankly, they share nothing in common. The CMA relies on indistinct local market trends. The appraisal relies on specific definite comparable sales. Also, the appraisal checks other factors like condition, neighborhood and replacement prices. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

Who's creating the report is actually the biggest difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, state licensed professional who made their livelihood on valuing homes in and around Montgomery County creates the appraisal. Further, the appraiser is an unbiased party, with no conditional interest in the property's value, unlike the agent, who gets a commission based upon the price of the home.

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

Each appraisal must reflect a credible value opinion and will document the following:

The client and other intended users.
The intended use of the report.
The reason for the appraisal.
The type of value contained and a definition of that value.
The effective date of the appraisal.
Relevant 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, trade fixtures and even intangible considerations.
All known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.
Division of interest, such as fractional interest, physical segment and partial holding.
The scope of work used while working up the appraisal.

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

Once the appraisal is done, what assurance is there that the value indicated is trustworthy? (Go to list of questions)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:

The appraisal contained an apropos analysis of the information.

That major errors of omission or commission were not committed individually or collectively.

That appraisal services were not conducted in a careless or negligent manner.

That a trustworthy, substantiated appraisal report was imparted.

To become a state licensed appraiser, we must satisfy intense education and experience requirements that train us to produce an unbiased opinion. Likewise, appraisers must stick to a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Go to list of questions) Licensing and certification takes classroom study, tests and practical experience. Once licensed, he/she is required to take continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who are an appraiser's customers? (Go to list of questions)

Most of the time, appraisers are employed by lenders to render a value opinion on a home involved in a loan transaction - to make sure the property is truly adequate collateral for the loan. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does an appraiser get the information used to estimate values in Montgomery County or other areas? (Go to list of questions)

One of the primary tasks an appraiser performs is to gather data. Data can be split into Specific or General. Specific data is taken from the property 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 public documents verify actual sales prices in a market. Appraisers often have to report when a property lies in a flood zone, so that information is retrieved from a FEMA data outlet 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.

What can a full appraisal do for me? (Go to list of questions)

If you're making any kind of financial decision and the value of your home is relevant, you'll want to hire a licensed appraiser. For those selling a home, you'll want to determine a price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. When buying, you can avoid overpaying by commissioning an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. Simply put, a home 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? (Go to list of questions)

PMI is an acronym for Private Mortgage Insurance. It takes care of the lender if a borrower defaults on the loan and the value of the home is less than the balance of 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.


	Did you have less than 20% to put down on your mortgage? Call Howard K. Beeco today at 2158165713. You may be able to save money by removing your Private Mortgage Insurance premium.

How do I get ready for the appraiser? (Go to list of questions)

We begin with an inspection of the property. 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. On the home's interior, 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:

A survey or plot map of the property and building (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 an oven, or a washer and dryer, if applicable.
Information on "Homeowners Associations" or condominium covenants and fees.
A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
Most recent real estate tax bill and or legal description of the property.

What is "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."

Who actually owns the appraisal report? (Go to list of questions)

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 certainly 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.

The exception to this rule is when a home owner hires an appraiser directly. In these scenarios, the appraiser may define how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not noted 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)

It really depends on the market. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!

No matter where you go, however, renovating a kitchen is almost always a safe move. 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 weren't far behind, yielding 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.