Beschnett Appraisal, LLC has answers to "Frequently Asked Questions"


	Beschnett Appraisal, LLC is always happy to address any inquiries you might have about appraisals in Waseca County. Don't hesitate to contact us today.

Define the term "Appraisal"
What does an appraiser do?
What are the reasons I would need a real estate appraisal?
Is an appraisal the same as a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
Once the assignment is done, how can I have a guarantee that the value conclusion is trustworthy?
How are appraisers certified?
Who hires an appraiser?
Where does an appraiser get the data used to estimate values in Waseca 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 actually owns the appraisal report?
Which home renovations add the most to the price?

Define the term "Appraisal" (Return to top)

The appraisal process is an estimation that generates an opinion of value. The appraiser will use a few "approaches," typically three, to conclude the estimation of market value. One of the processes in use is the Cost Approach, which finds what it would cost to restore the improvements to the house, minus depreciation and physical deterioration, adding the land value. Another of the approaches is the Sales Comparison Approach - which concerns making a comparison to other similar nearby properties which have recently sold. Being the most popular approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a residence. The Income Approach is mainly 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? (Return to top)

An appraiser forumlates a professional, unbiased determination of market value, to be used in making real estate transactions. Appraisers reveal the details of their analysis in appraisal reports.

What are the reasons I would need a real estate appraisal? (Return to top)

There are a lot of reasons to order an appraisal from Beschnett Appraisal, LLC with the usual reason being real estate and mortgage transactions. Some other reasons for obtaining an appraisal report include:

If you are applying for a loan.
If you would like to reduce your property tax obligations.
To demonstrate a homeowner's acquired equity and remove insurance.
To contest improperly assessed property taxes.
To settle an estate.
To provide you a leg-up when purchasing real estate.
To find a likely property value when selling real estate.
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.
It's possible you could be involved in a lawsuit - an appraisal will definitely help.

For a more extensive description of the appraisal process click here.

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

Appraisers do not do provide home inspections and are not home inspectors. A third-party home inspector will judge the structure of the property, from the roof to the bottom. The general house inspector's report will include an evaluation of the integrity of the house's heating systems, 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.

What is the difference between an appraisal and a comparative market analysis (CMA)? (Return to top)

To be blunt, it's night and day. What the CMA depends on are superficial trends. An appraisal relies on comparable sales that can be verified by public record. Also, the appraisal verifies other factors like condition, location and building 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 behind the report is actually the biggest difference between a CMA and an appraisal. Real estate agents produce CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, state licensed professional who bases their livelihood on valuing properties in and around Waseca County is behind the appraisal. Moreover, the appraiser is an independent party, with no vested interest in the property's value, unlike the real estate agent, whose income is tied to the value of the home.

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

Every report must indicate a supported estimate of value and must document the following:

Who engaged the appraiser and whose purposes the appraisal is to serve.
The intended use of the appraisal.
The purpose of the appraisal.
The type of value reported and a definition of that value.
The effective date of the value opinion.(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 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.
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.
The scope of work considered while working up the job.

For a more comprehensive view of what goes into an appraisal report click here: Sample Appraisal Report

Once the assignment is done, how can I have a guarantee that the value conclusion is trustworthy? (Return to top)

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

The appraisal used an appropriate analysis of the information.

Whether individually or collectively, there were no substantial errors contained in the appraisal, nor any relevant details left out.

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

The final appraisal report was clear, credible and conclusive.

There are rigorous education and on the job experience requirements that must be adhered to in order to achieve the title of "licensed appraiser" in Minnesota. Plus, appraisers must stick to a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The rules for working up an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Return to top) Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. In general, licensing and certification typically translates to many hours of classroom study, tests and practical experience. Once an appraiser is licensed, he/she must then complete continuing education courses in order to keep the license current. To see the specific requirements for any state click here.

Who hires an appraiser? (Return to top)

Mortgage lenders are an appraiser's typical customer, requiring their services to ensure a home involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

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

Compiling data is one of the primary activities of an appraiser. Data can be categorized as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser while on site.

General data is gathered from a variety of places. Local Multiple Listing Services (MLS) provide information on recently sold homes that might be used as comparables. Tax records and other public documents reveal actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood product.

And most importantly, the appraiser assimilates general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.

How can a licensed appraiser help me? (Return to top)

If you're making any kind 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 determine the 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 Beschnett Appraisal, LLC is the best documentation to ensure assets are split up evenly. A home 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? (Return to top)

PMI stands for Private Mortgage Insurance. This added plan takes care of the lender if a borrower is unable to pay on the loan and the market price of the home is lower than what the borrower still owes on 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.


	Does your monthly house payment have a lineitem for PMI?Call Beschnett Appraisal, LLC today at 5078337215 or send us an e-mail. A current appraisal could save you thousands.

How do I get ready for the appraiser? (Return to top)

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 condition 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. In the yard, trim any bushes so we can be free to get an accurate measurement of outside walls.

You can make things go faster and improve the quality of the appraisal report by having the following things on hand:

A plot plan or survey of the house and land (if readily available).
Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
Information on "Homeowners Associations" or condominium covenants and fees.
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
A bill for your most recent real estate taxes which should also contain a legal description of the property.

Define "Market Value" (Return 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 actually owns the appraisal report? (Return to top)

For mortgage transactions, the lender requests the appraisal, either directly or through a third party. 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 allowed 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 cases, the appraiser may stipulate the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can use the appraisal for any purpose.

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

It really depends on the market. For example, while quality appliances are attractive, a $7000 built-in refrigerator won't pay off in a neighborhood of moderately priced homes

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 weren't far behind, yielding 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size.