Connie Nugera has answers to "Frequently Asked Questions"


	Connie Nugera is always more than happy to answer any concerns you might have about appraisals or real estate in Los Angeles County. Contact us today to talk about how we can help solve your valuation problems.

What is an appraisal?
Describe what an appraiser does
What would cause me to require services from Connie Nugera?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Upon completion of the appraisal, what assurance is there that the value conclusion is legitimate?
How hard is it to become certified?
Who do appraisers work for?
Where does an appraiser get the data used to estimate values in Los Angeles County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Do you need anything from the homeowner in advance?
What does "Market Value" mean?
Who actually owns the appraisal report?
Are some home improvements more worthwhile than others?

What is an appraisal? (Return to top)

The procedure of performing an appraisal report deals with an investigation which forms an opinion of value. This opinion or estimate is figured by using a formal process that commonly utilizes the three main "common approaches to value". One of the methods in use is the Cost Approach, which is what it would cost to restore the improvements to the property, minus age and physical dilapidation, adding the land value. The Sales Comparison Approach deals with searching for similar properties in close proximity and discerning value based on comparing those properties to the property being appraised. Being the most popular approach, the Sales Comparison Approach is considered the most precise and best indicator of market value for a house. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it involves estimating what an investor would pay based on the capital generated by the property.

Describe what an appraiser does (Return to top)

An appraiser offers an unprejudiced and well supported assessment of market value, often in the context of a real estate exchange. Appraisers reveal the details of their professional findings in appraisal reports.

What would cause me to require services from Connie Nugera? (Return to top)

There are many reasons to get an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for obtaining an appraisal include:

To get a loan.
If you would like to reduce your property tax burden.
To help a homeowner realize if they owe less than 80% of their home's value and remove insurance.
To contest improperly assessed property taxes.
If you need to settle an estate.
To provide you an edge when purchasing a home.
To figure out a likely property value when listing your home.
To protect 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 lawsuit.

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

How is an appraisal different than a home inspection? (Return to top)

Appraisers do not do perform home inspections and are not home inspectors. An inspection is a third-party evaluation of the available structure and appliances of a house, from the top to the foundation. Commonly, a home inspection report will discuss the amenities and the requirements of the house: 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, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

Is an appraisal the same as a comparative market analysis(CMA)? (Return to top)

Honestly, they have nothing in common. The CMA depends on vague local market trends. An appraisal is based on comparable sales that can be verified by public record. In addition, the appraisal looks at other factors like condition, area and construction costs. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the most significant factor is who's doing the report. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. 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 fee for work they perform, regardless of their outcome.

What are the contents of an appraisal report? (Return to top)

Each appraisal should indicate a credible estimate of value and will document the following:

The client and other intended users.
The intended use of the report.
The reason for the appraisal.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the value opinion.
Relevant property characteristics, including: location, physical attributes, legal attributes, economic factors, the property rights valued, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible items.
Any 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 included in the activity of completing the assignment.

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

Upon completion of the appraisal, what assurance is there that the value conclusion is legitimate? (Return to top)

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 appraisal, nor any relevant details left out.

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

That a trustworthy, substantiated appraisal report was conferred.

To become a state licensed appraiser, there are intense education requirements as well as practical experience that must be logged - all with the end goal of being able to render unbiased value opinions. Plus, appraisers must follow a strict industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for working up an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Return to top) Licensing and certification takes coursework, tests and practical experience. Once licensed, he or she is required to engage in 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? (Return to top)

Commonly, appraisers are employed by lenders to estimate the value of a house involved in a loan transaction. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does an appraiser get the data used to estimate values in Los Angeles County or other areas? (Return to top)

One of the main tasks an appraiser must accomplish is to assimilate property data. Data can be classified as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specifics are gathered by the appraiser while on site.

General data is received from a number of places. To research recent sales to be used as "comps", we typically go to the local Multiple Listing Service. To verify actual sales prices, we use tax records and other public documents. Appraisers routinely have to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And most importantly, the appraiser assimilates general data from his or her collective knowledge gained from doing assignments for other properties in the same market.

What can a full appraisal do for me? (Return to top)

If you're involved in some sort of financial decision and the value of your home is relevant, you'll want an appraisal. When selling your house, an appraisal helps you set the most appropriate price. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. Simply put, a house is often the single, largest financial asset anybody owns. Knowing its true value means you can make smart financial decisions.

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

PMI is an acronym for Private Mortgage Insurance. It protects the lender in the event a borrower doesn't pay on the loan and the value of the property is lower than the balance of the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.


	The money you keep from cancelling the PMI required when you got your mortgage will make up for the cost of the appraisal in a matter of months. Connie Nugera is in the business of tracking real estate value trends in Pasadena and Los Angeles County. Contact us today.

Do you need anything from the homeowner in advance? (Return to top)

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. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house . Trim any landscaping and move any items that would get in our way while we measure the structure. Indoors, make sure we can easily access items like furnaces and water heaters.

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

Information on any written private easements, such as a shared driveway with a neighbor.
List of personal property to be sold with the home.
Information on "Homeowners Associations" or condominium covenants and fees.
Locate copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.
A list of "suggested" improvements if the property is to be appraised "as complete".

What does "Market Value" mean? (Return to top)

In real estate appraising, 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? (Return 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 certainly entitled to a copy of the appraisal - 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.

The exception to this rule is when a home owner hires an appraiser directly. In these situations, the appraiser may state 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 do whatever they want with the appraisal.

Are some home improvements more worthwhile than others? (Return to top)

It really depends on the market. 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

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 are right up there with kitchens, returning 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.