Mary D. Nurse, Appraisal Services has answers to "Frequently Asked Questions"


	Mary D. Nurse, Appraisal Services is always happy to handle any concerns you might have about appraisals in Honolulu County. Contact Mary D. Nurse, Appraisal Services today to see how we can help you with your specific valuation problems.

What is an appraisal?
Describe what an appraiser does
What are the reasons I would require your services?
What is the difference between an appraisal and a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What's in an appraisal report?
Once the report has been completed, how can I have assurance that the value indicated is valid?
How hard is it to become certified?
Who do appraisers work for?
Where does Mary D. Nurse, Appraisal Services get the information used to estimate values in Honolulu County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
Do you need anything from the homeowner in advance?
What is "Market Value?"
Who has rights to the appraisal report?
I want to get more for my house. Where should I spend money renovating?

What is an appraisal? (Go to list of questions)

The process of performing an appraisal consists of an investigation which forms an opinion of value. This opinion or estimate is discerned by a formal method that typically utilizes three "common approaches to value". One of the methods in use is the Cost Approach, which finds what it would cost to replace the improvements to the property, less the age and physical dilapidation, adding the land value. The Sales Comparison Approach involves finding similar houses nearby and figuring out the value based on making a comparison of those homes to the house being appraised. Usually, the Sales Comparison Approach is the most accurate indicator of value of a home. One of the least common approaches in appraising residential properties is the Income Approach, which is mainly used to determine the worth of a property based on what an investor would pay based on the income produced by the building.

Describe what an appraiser does (Go to list of questions)

An appraiser produces a fair and credible assessment of market value, in the support of real estate exchanges. Appraisers demonstrate their findings in appraisal reports.

What are the reasons I would require your services? (Go to list of questions)

There are a lot of reasons to get an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for purchasing an report include:

If you are applying for a loan.
To reduce your tax burden.
To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
To challenge inflated property taxes.
If you need to settle an estate.
To provide you an edge when purchasing a home.
To determine a reasonable sales price when putting your home on the market.
To protect your rights if your property is being taken by means of eminent domainin a condemnation case.
Because a government agency such as the IRS requires it.
If you ever find yourself in a lawsuit.

If you need more information regarding the appraisal process, please click here.

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

The appraiser is not a home inspector nor does he/she do a full home inspection. A third-party home inspector will investigate the structure of the home, from the top to the bottom. The stereotypical home inspector's report will include 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.

What is the difference between an appraisal and a comparative market analysis (CMA)? (Go to list of questions)

Simply put, it's like comparing opera to country. What the CMA depends on are ill-defined trends. The appraisal is based on specific proven comparable sales. In addition, the appraisal verifies other factors like condition, neighborhood and construction prices. All a CMA does is generate 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 behind the report. Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, Hawaii licensed professional who made their livelihood on valuing homes in and around Honolulu County is behind the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to accept a previously agreed upon sum for assignments, regardless of their value conclusion.

What's in an appraisal report? (Go to list of questions)

Every report must reflect a credible estimate of value and should identify the following:

Who engaged the appraiser and who's purposes the appraisal is to serve.
The intended use of the appraisal.
The appraisal's purpose.
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!)
Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the appraisal, 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.
What was involved in the process of completing the appraisal.

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

Once the report has been completed, how can I have assurance that the value indicated is valid? (Go to list of questions)

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

That the information analysis implemented in the appraisal was proper.

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

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

The final appraisal report was understandable, sound and not easily discredited.

To become a state licensed appraiser, we must satisfy considerable education and experience requirements that enable us to produce an unbiased opinion. In addition, appraisers must obey a meticulous industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines 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) Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. However, licensing and certification is commonly associated with many hours of coursework, tests and practical experience. Once an appraiser is licensed, he/she must then take continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who do appraisers work for? (Go to list of questions)

Mortgage lenders are an appraiser's typical customer, using their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Mary D. Nurse, Appraisal Services get the information used to estimate values in Honolulu County or other areas? (Go to list of questions)

Gathering information is one of the primary tasks an appraiser performs. Data can be categorized as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.

General data is received from a many places. To research recently sold homes to be used as "comps", we often go to the local Multiple Listing Service. Tax records and other public documents verify actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood service.

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

How can a licensed appraiser help me? (Go to list of questions)

An appraisal is a valuable tool whenever the value of your home is pertinent to a financial decision. When selling your house, an appraisal will help you determine a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from Mary D. Nurse, Appraisal Services is the best documentation to ensure assets are divided properly. A home is often the single, largest financial asset anybody owns. Knowing its true worth is essential to making informed 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. This additional plan covers the lender if a borrower is unable to pay on the loan and the value of the home 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.


	The savings from getting rid of the PMI required when you got your mortgage will make up for the cost of the appraisal in a matter of months. Mary D. Nurse, Appraisal Services has years of experience with value trends in Honolulu and Honolulu County. Contact us today.

Do you need anything from the homeowner in advance? (Go to list of questions)

We start 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, make sure it is clutter free and that we can find our way to things like furnaces and water heaters. On the outside, trim any bushes 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:

Information on the latest purchase of the property in the last three years.
Written property agreements, such as a maintenance easement for a shared driveway.
Title policy that describes encroachments or easements.
Brag sheet that lists major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

What is "Market Value?" (Go to list of questions)

Market value or fair market value is the most probable price that a property should bring (will sell for) in a competitive and open market under all conditions requisite to a fair sale, the buyer and seller, each acting prudently, 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: (1) buyer and seller are typically motivated; (2) both parties are well informed or well advised; (3) a reasonable time is allowed for exposure to the open market; (4) payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto; and (5) 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 has rights to the appraisal report? (Go to list of questions)

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 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 engages an appraiser directly. In these cases, the appraiser may state the purpose of the appraisal; 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.

I want to get more for my house. Where should I spend money renovating? (Go to list of questions)

The answer to this is different depending upon the location of the home. The added value of a particular amenity truly depends on the local market.

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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%. Adding bedrooms and baths can also help the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.