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ADCOCK & ASSOCIATES has answers to "Frequently Asked Questions"

ADCOCK & ASSOCIATES is happy to address any concerns you might have about appraisals in santa maria and Santa Barbara County. Don't hesitate to contact us today.

What is an appraisal?
What does an appraiser do?
What would cause me to request services from ADCOCK & ASSOCIATES?
Is an appraisal the same as a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What does the appraisal report contain?
After completing the appraisal, what guarantee is there that the value indicated is valid?
What are the requirements to be a certified appraiser?
Who do appraisers work for?
Where does an appraiser get the data used to estimate values in Santa Barbara County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
Does the appraiser need anything from the homeowner in advance?
Define "Market Value"
Who has rights to the appraisal report?
Which home renovations add the most to the price?



What is an appraisal?   (Back to top)

An appraisal is a thought process that concludes with an opinion of value. This opinion or estimate is arrived at by a formal process that generally uses the three main "common approaches to value". One of them is the Cost Approach - which is how much it would cost to replace the improvements, less physical deterioration and other factors, plus the land value. The Sales Comparison Approach involves finding comparable houses nearby and discovering the value based on making a comparison of those prior sales to the house in question. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a residential 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?   (Back to top)

An appraiser forumlates a professional, unbiased assessment of market value, in the support of real property exchanges. Appraisers exhibit their findings in appraisal reports.


What would cause me to request services from ADCOCK & ASSOCIATES?   (Back to top)

There are a lot of reasons to get an appraisal from ADCOCK & ASSOCIATES with the most common reason being real estate and mortgage transactions. Other reasons for getting an appraisal report include:
  • To receive a loan.
  • To lower your property taxes.
  • To show a homeowner has 30% equity and remove insurance.
  • To contest inflated property taxes.
  • If you need to take care of an estate.
  • To provide you an edge when purchasing a home.
  • To find the most probable property value when selling real estate.
  • To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Because a government agency such as the IRS requires it.
  • It's possible you could be involved in a lawsuit - an appraisal will help.
For a more detailed description of the appraisal process click here.


Is an appraisal the same as a home inspection?   (Back to top)

The appraiser is not a home inspector and he or she does not do a full home inspection. A third-party home inspector will evaluate the structure of the property, from the roof to the bottom. For the most part, a home inspection report will explain the amenities and the requirements of the property: 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.

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

Honestly, they share nothing in common. The CMA relies on indefinite local market trends. Appraisals use similar sales which are verifiable resources. Also, the appraisal looks at other factors like condition, area and construction costs. 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 creating the report is hands down the biggest difference between a CMA and an appraisal. 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. The appraisal is created by a licensed, certified professional who makes a living out of valuing properties. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to accept a flat fee for assignments, regardless of their value conclusion.

What does the appraisal report contain?   (Back to top)

Each report should demonstrate a supported value opinion and should identify the following:
  • The client and whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The appraisal's purpose.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraiser's opinions and conclusions.
  • Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic factors, the property rights valued, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed 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.
  • What was entailed in the process of completing the appraisal.
For a more comprehensive view of the work that goes into an appraisal report click here: Sample Appraisal Report


After completing the appraisal, what guarantee is there that the value indicated is valid?   (Back to top)

In the documentation of an appraisal, each appraiser must make sure of the following:
  • That the information analysis implemented in the appraisal was appropriate.

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

  • That appraisal services were rendered in a careful and cognizant manner.

  • That a solid, defensible appraisal report was communicated.
To become a state licensed appraiser, we must meet considerable education and experience requirements that train us to produce an unbiased opinion. In addition, appraisers must follow a strict industry code of ethics and respect national standards of practice for real estate appraisal. The rules for carrying out an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Back to top) Licensing and certification requires classroom study, tests and practical experience. Once licensed, he/she is required to take continuing education courses in order to keep the license current. To see the specific requirements for any state click here.

Who do appraisers work for?   (Back to top)

Commonly, appraisers are hired by mortgage lenders to render a value opinion on property involved in a loan transaction. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does an appraiser get the data used to estimate values in Santa Barbara County or other areas?   (Back to top)

One of the primary activities of an appraiser is to assimilate data. Data can be categorized as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.

General data is received from a number of sources. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. To verify actual sales prices, we research tax records and other public documents. Appraisers often need 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 creating appraisals for other properties in the same market.


Why do I need a professional appraisal?   (Back to top)

If you're making any kind of financial decision and the value of your home matters, you'll want to hire a licensed appraiser. For those selling a home, you'll want to figure out 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. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from ADCOCK & ASSOCIATES is the best documentation to ensure assets are split up evenly. Simply put, a house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.


What exactly is PMI and how can I get rid of it?   (Back to top)

PMI stands for Private Mortgage Insurance. This added policy covers the lender if a borrower is unable to pay on the loan and the value of the property is lower 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? Contact ADCOCK & ASSOCIATES today at 8059343800 to see if you can get rid of your Private Mortgage Insurance premium.

Does the appraiser need anything from the homeowner in advance?   (Back to top)

We begin with an inspection of the property. During this process, we 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, 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 landscaping so we can be free to get an accurate measurement of outside walls.

To help speed things along plus ensure a more accurate report, attempt if possible to have the following items:
  • A plot plan or survey of the house and land (if available).
  • Written property agreements, such as a maintenance easement for a shared driveway.
  • Most recent real estate tax bill from Santa Barbara and or legal description of the property.
  • Brag sheet that lists 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).
  • Information on "Homeowners Associations" or condominium covenants and fees.

Define "Market Value"   (Back to top)

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?   (Back to top)

In most real estate transactions, the appraisal is ordered by the lender. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is entitled to a copy of the appraisal - 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.

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.


Which home renovations add the most to the price?   (Back to top)

Like all things real estate, this is dependent on a home's location. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

As a rule, the most value returned from renovating a home comes in the kitchen. 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%. Adding bedrooms and baths can also help 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.