Frank Tomecek Real Estate Services has answers to "Frequently Asked Questions"


	Frank Tomecek Real Estate Services is ready to elaborate on any questions you might have about appraisals or real estate in Lebanon County. Feel free to contact us today.

Define the term "Appraisal"
Describe what an appraiser does
What are the reasons someone would request a real estate appraisal?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Once the appraisal has been delivered, how can I have assurance that the value indicated is valid?
How are appraisers certified?
Who hires an appraiser?
Where does an appraiser get the data used to estimate values in Lebanon 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 appointment
What is "Market Value?"
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?

Define the term "Appraisal" (Return to top)

An appraisal report is an estimation leading to an opinion of value. There are three "common approaches to value" which assists the appraiser come to this opinion or estimate. The Cost Approach is one of the approaches that real estate appraisers use to find value; it involves finding what the improvements would cost without physical deterioration, adding the land value. The Sales Comparison Approach involves searching for similar homes in the vicinity and finding value based on making a comparison of those houses to the house in question. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a home. One of the least common approaches in appraising residential properties is the Income Approach, which is mainly used to find the value of a property based on what an investor would pay based on the income produced by the building.

Describe what an appraiser does (Return to top)

An appraiser generates a fair and credible determination of market value, in the support of real estate exchanges. Appraisers reveal the details of their professional conclusions in appraisal reports.

What are the reasons someone would request a real estate appraisal? (Return to top)

There are a lot of reasons to order an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for ordering an report include:

If you are applying for a loan.
If you would like to lower your property tax obligations.
To show a homeowner has 30% equity and remove insurance.
To challenge inflated property taxes.
To handle an estate.
To offer you a negotiating tool when purchasing a home.
To determine the most probable sales price when putting your home on the market.
To ensure parties are provided just compensation in eminient domain cases.
Government agencies such as the IRS require an appraisal on every home.
It's possible you could have to deal with being in a lawsuit - an appraisal will help.

If you need more information about the appraisal process, please click here.

What is the difference between an appraisal and a home inspection? (Return to top)

The appraiser is not a home inspector and he or she does not do a complete home inspection. The point of a home inspection is to investigate the structure of the home from foundation to rooftop. Usually, a home inspection report will evaluate the amenities and the necessities 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, exposed 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)

To be blunt, it's like comparing Shakespeare to reality TV. The CMA uses market trends to generate most of their business. An appraisal relies on comparable sales that can be verified by records. In addition, the appraisal looks at other factors like condition, neighborhood and construction prices. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the largest differentiator is the person creating the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA's. A certified, state licensed professional who made their livelihood on valuing real estate in and around Lebanon County is behind the appraisal. Further, the appraiser is an unbiased voice, with no conditional interest in the value conclusion, unlike the real estate agent, whose income is tied to the price of the home.

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

The main purpose 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:

Who engaged the appraiser and whose purposes the appraisal is to serve.
The intended use of the report.
The appraisal's purpose.
The type of value contained and a definition of the value reported.
The effective date of the appraisal.
Pertinent property characteristics, including: location, physical attributes, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible factors.
Any known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and other items of a similar nature.
Division of interest, such as fractional interest, physical segment and partial holding.
The scope of work considered when completing the job.

For a more in depth look at what goes into an appraisal report click here: Sample Appraisal Report

Once the appraisal has been delivered, how can I have assurance that the value indicated is valid? (Return to top)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:

That the information analysis utilized in the appraisal was proper.

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

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

That a trustworthy, supportable appraisal report was imparted.

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

(Return to top) Regulations regarding licensing and certification are different from state to state. However, licensing and certification is most often associated with many hours of coursework, tests and experience working under a supervisor. Once an appraiser is licensed, he or she must then engage in 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)

Most of the time, appraisers are employed by lenders to estimate the value of property involved in a loan transaction - to make sure the real estate is truly adequate collateral for the loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

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

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

General data is received from a many sources. Local Multiple Listing Services (MLS) have data on recently sold homes that might be used as comparables. To verify actual sales prices, we look at tax records and other public documents that are usually online nowadays. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood service.

And last but not least, the appraiser assimilates general data from his or her past experience in doing assignments for other properties in the same market.

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

An appraisal is a worthwhile anytime the value of your home is relevant to a financial decision. If you're selling your home, an appraisal will help you determine the most appropriate price. When buying, you can avoid overpaying by commissioning an independent appraisal. For parties settling an estate or divorce, an appraisal from Frank Tomecek Real Estate Services is the best documentation to ensure assets are divided properly. Simply put, a home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making the right 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. This supplemental plan covers the lender in case 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 loan payment have a lineitem for PMI?Call Frank Tomecek Real Estate Services today at 717-949-2678 or send us an e-mail. Documentation of your home's present value could save you thousands.

Should I do anything in advance of the appraisal appointment (Return to top)

We start with an inspection of the home. During this process, the appraiser 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 expedite our work plus ensure a more accurate report, try if possible to have the following items:

Information on any written private agreements, such as a shared driveway with a neighbor.
List of personal property to be sold with the building.
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 is "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 has rights to the appraisal report? (Return 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 entitled to a copy of the appraisal - 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.

The exception to this rule is when a home owner hires an appraiser directly. In these cases, 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.

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

This really depends on where the home is. For example, putting in an inline humidifier could be nice in arid regions, but completely useless near the coast!

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 overbuilt for your neighborhood in terms of size.