Provident Appraisal & Consulting Co. has answers to "Frequently Asked Questions"


	Provident Appraisal & Consulting Co. is prepared to talk to you about any questions you might have about appraisals in SLC and Davis County. Contact Provident Appraisal & Consulting Co. today to learn how we can help you with your specific valuation problems.

Describe an appraisal
What does an appraiser do?
Why would a person require services from Provident Appraisal & Consulting Co.?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Upon completion of the report, how can I have a guarantee that the final number is legitimate?
How difficult is it to become certified?
Who do appraisers work for?
Where does an appraiser get the information used to estimate values in Davis County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
Define "Market Value"
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?

Describe an appraisal (See list of FAQ's)

An appraisal report is an inspection allowing the appraiser to come to an opinion of value. There are three "common approaches to value" which assists the appraiser conclude this opinion or valuation. One of them is the Cost Approach - which is what it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. The Sales Comparison Approach involves finding similar houses in close proximity and finding value based on comparing those houses to the property being investigated. The Sales Comparison Approach is normally the most definitive and clearest indicator of a liklely sales price for a residential property. The Income Approach is generally used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in.

What does an appraiser do? (See list of FAQ's)

An appraiser produces a professional, unbiased assessment of market value, often in the context of a real estate purchase. Appraisers summarize their professional conclusions in appraisal reports.

Why would a person require services from Provident Appraisal & Consulting Co.? (See list of FAQ's)

There are many reasons to purchase an appraisal from Provident Appraisal & Consulting Co. with the usual reason being real estate and mortgage transactions. A few other reasons for ordering an appraisal report include:

If you are applying for a loan.
To lower your property taxes.
To show a homeowner has 30% equity and remove insurance.
To fight improperly assessed property taxes.
If you need to take care of an estate.
To offer you a leg-up when purchasing a home.
To find a likely sales price when putting your home on the market.
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 dealing with getting an appraisal.

How is an appraiser different than a home inspector? (See list of FAQ's)

Home inspectors do not come to an opinion of value and are not appraisers. The purpose of a home inspection is to investigate the structure of the house from bottom to rooftop. Usually, a home inspection report will evaluate the amenities and the necessities of the home: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

Is an appraisal the same as a comparative market analysis(CMA)? (See list of FAQ's)

To be honest, they have nothing in common. The CMA depends on indefinite market trends. Appraisals use comparable sales which are verifiable resources. The appraisal report will also include area and construction prices. All a CMA does is generate a "ball park 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 frankly the most significant difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. A certified, Utah licensed professional who has formed a career on valuing real estate in and around Davis County creates the appraisal. Further, the appraiser is an unbiased party, with no conditional interest in the property's value, unlike the real estate agent, who gets a commission based upon the value of the home.

What are the contents of an appraisal report? (See list of FAQ's)

Every appraisal should demonstrate a supported value opinion and must identify the following:

The client and other intended users.
The intended use of the report.
The appraisal's purpose.
The type of value contained 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 characteristics, including: location, physical characteristics, 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 factors.
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 considered when completing the job.

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

Upon completion of the report, how can I have a guarantee that the final number is legitimate? (See list of FAQ's)

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

The appraisal contained an appropriate analysis of the data.

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

That appraisal services were done in a careful and conscientious manner.

That a credible, defensible appraisal report was imparted.

There are rigorous classroom and real world experience requirements that must be fulfilled in order to get an appraisal license in Utah. In addition, appraisers must stick to a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's) Licensing and certification requires classroom study, tests and real world experience. Once licensed, he/she must then take continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who do appraisers work for? (See list of FAQ's)

Mortgage lenders are an appraiser's typical client, 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 an appraiser get the information used to estimate values in Davis County or other areas? (See list of FAQ's)

One of the main activities of an appraiser is to collect data. Data can be described as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.

General data is gathered from a many places. Local Multiple Listing Services (MLS) provide 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 servers.

And most importantly, the appraiser gathers general data from his or her past experience in doing assignments for other houses in the same market.

How can a licensed appraiser help me? (See list of FAQ's)

If you're making some sort of financial decision and the value of your home is relevant, you'll want an appraisal. For those selling a home, you'll want to figure out the 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 commissioning an independent appraisal. For those settling an estate or divorce, an appraisal from Provident Appraisal & Consulting Co. is the best way to ensure assets are divided fairly. Simply put, a house 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? (See list of FAQ's)

PMI is an acronym for Private Mortgage Insurance. It takes care of the lender in case a borrower doesn't pay on the loan and the value of the house is less than what is owed on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.


	The savings from cancelling the PMI required when you got your mortgage pays for the appraisal in a matter of months. Provident Appraisal & Consulting Co. stays current with value trends in SLC and Davis County. Contact us today.

How do I get ready for the appraiser? (See list of FAQ's)

We begin with an inspection of the home. 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 condition of its amenities. Is there anything you can do to help? Yes there is! First, be 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 get in our way while we measure the structure. On the inside, make sure the appraiser can get to appliances like furnaces and water heaters.

To help expedite our work as well as ensure a more accurate report, attempt if possible to have the following items:

A plot plan or survey of the house and land (if readily available).
List of personal property to be sold with the building.
Information on "Homeowners Associations" or condominium covenants and fees.
A list of any major home improvements and enhancements, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
A list of "proposed" improvements when the property is being appraised "as complete".

Define "Market Value" (See list of FAQ's)

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 has rights to the appraisal report? (See list of FAQ's)

For mortgage transactions, the lender orders 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 report - it's usually bundled with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

This rule doesn't apply when a home owner engages an appraiser directly. In these scenarios, the appraiser may define the purpose of the appraisal; 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.

How can I get the most ROI out of home improvements? (See list of FAQ's)

The added value of a particular amenity truly depends on the local 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 most value returned 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 are right up there with kitchens, returning 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.