Cayuga Appraisals, LLC has answers to "Frequently Asked Questions"


	Cayuga Appraisals, LLC is always willing to talk to you about any concerns you might have about appraisals or real estate in Ithaca and Tompkins County. Don't hesitate to contact us today.

Describe an appraisal
Describe what an appraiser does
Why would a person need your services?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
After completing the appraisal, what assurance is there that the final number is accurate?
How difficult is it to become certified?
Who engages the services of appraisers?
Where does Cayuga Appraisals, LLC get the information used to estimate values in Tompkins County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal inspection
How does an appraiser define "Market Value"?
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?

Describe an appraisal (Back to top)

An appraisal is an inspection that concludes with an opinion of value. There are three "common approaches to value" which assists the real estate appraiser conclude this opinion or estimate. The Cost Approach is one of the processes that real estate appraisers use to find value; it involves figuring what the improvements would cost less physical depreciation, adding the land value. Another of the processes is the Sales Comparison Approach - which involves making a comparable analysis to other similar nearby properties which have recently sold. The Sales Comparison Approach is commonly the most definitive and best indicator of value for a residential property. One of the least common approaches in appraising residential properties is the Income Approach, which is generally used to figure the market value of a property based on what an investor would pay based on the income produced by the property.

Describe what an appraiser does (Back to top)

An appraiser generates a professional, unbiased opinion of market value, often in the context of a real estate purchase. Appraisers exhibit their expert findings in appraisal reports.

Why would a person need your services? (Back to top)

There are many reasons to purchase an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal include:

To get a loan.
To reduce your property taxes.
To show a homeowner has 30% equity and remove insurance.
To challenge high property taxes.
If you need to settle an estate.
To provide you a negotiating tool when purchasing real estate.
To figure out an honest price when selling real estate.
To ensure parties are provided just compensation in eminient domain cases.
Because a government agency such as the IRS requires it.
If you ever find yourself in a civil case.

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

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

The appraiser is not a home inspector and he or she does not do a complete home inspection. An inspection is a third-party investigation of the livable structure and mechanical systems of a property, from the top to the foundation. For the most part, a home inspection report will explain the amenities and the necessities of the home: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

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

To be blunt, it's like comparing broadband and dial-up. The CMA uses market trends to create most of their business. The appraisal relies on specific verifiable comparable sales. Also, the appraisal checks other factors like condition, neighborhood and construction costs. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

Who's behind the report is actually the biggest difference between a CMA and an appraisal. A CMA is created by a real estate agent who may or may not have a true grasp of the market or valuation concepts. The appraisal is produce 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 collect only a previously agreed upon sum for assignments, regardless of their value conclusion.

What can I expect to see in my appraisal report? (Back to top)

The main point of an appraisal report is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:

The client and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The reason for the assignment.
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 description, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible items.
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 involved in the process of completing the assignment.

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

After completing the appraisal, what assurance is there that the final number is accurate? (Back to top)

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

That the information analysis utilized in the appraisal was proper.

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

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

That a trustworthy, supportable appraisal report was communicated.

There are intense classroom and experience requirements that must be met in order to become a licensed appraiser in New York. In addition, appraisers must stick to a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for working up an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Back to top) Regulations regarding licensing and certification vary from state to state. In general, licensing and certification is most often associated with many hours of classroom study, tests and experience working under a supervisory appraiser. Once licensed, he/she must then take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who engages the services of appraisers? (Back to top)

Typically, appraisers are employed by lenders to render a value opinion on a home involved in a loan transaction - to make sure the real estate is indeed adequate collateral for the loan. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does Cayuga Appraisals, LLC get the information used to estimate values in Tompkins County or other areas? (Back to top)

Collecting data is one of the primary functions of an appraiser. Data can be categorized as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is received from a numerous places. Local Multiple Listing Services (MLS) provide data on recently sold homes that could be used as comparables. To verify actual sales prices, we use items in the assessor's office and other public documents. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood servers.

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

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

An appraisal is a worthwhile whenever your home's value is relevant to a financial decision. If you're selling your home, an appraisal will help you determine the most appropriate price. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from Cayuga Appraisals, LLC is the best documentation to ensure assets are split up evenly. 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? (Back to top)

PMI is the common abbreviation for for Private Mortgage Insurance. This additional policy covers the lender in the event a borrower defaults on the loan and the value of the home 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.


	Has your home value appreciated since you first purchased? Call Cayuga Appraisals, LLC today at (607)273-0207. You may be able to get rid of your Private Mortgage Insurance payment.

Should I do anything in advance of the appraisal inspection (Back to top)

We start 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. 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.

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

Records on the latest purchase of the property in the last three years.
Information on any written private agreements, such as a shared driveway with a neighbor.
Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
A list of "suggested" improvements if the property is to be appraised "as complete".

How does an appraiser 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."

Does the appraisal belong to the bank or the consumer? (Back to top)

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 certainly 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 hires an appraiser directly. In these situations, 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 do whatever they want with the appraisal.

How can I get the most ROI out of home improvements? (Back to top)

The answer to this is different depending upon the location of the home. 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. 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%. On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.