Northern Nevada Appraisal Services, LLC has answers to "Frequently Asked Questions"

Northern Nevada Appraisal Services, LLC is eager to talk to you about any questions you might have about appraisals in Washoe County. Contact us today to see how we can help you with your valuation problems.

Define the term "Appraisal"
What does an appraiser do?
What are the reasons someone would request services from Northern Nevada Appraisal Services, LLC?
How is an appraisal different than a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What's in an appraisal report?
Once the appraisal has been completed, what assurance is there that the value indicated is veritable?
What does it mean for an appraiser to be licensed?
Who hires an appraiser?
Where does Northern Nevada Appraisal Services, LLC get the data used to estimate values in Washoe 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?
How does an appraiser define "Market Value"?
Who has rights to the appraisal report?
I want to get more for my house. Where should I spend money renovating?



Define the term "Appraisal"   (Back to top)

The appraisal process is an evaluation that generates an opinion of value. The appraiser will typically use a number of "approaches," typically three, to come to the estimation of market value. One of the methods in use is the Cost Approach, which evaluates what it would cost to restore the improvements to the house, less the age and physical dilapidation, adding the land value. Another of the approaches is the Sales Comparison Approach - which concerns discovering a comparison to other similar nearby properties which have recently sold. Being the most commonly used approach, the Sales Comparison Approach is considered the most precise and best indicator of market value for a home. 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 capital produced by the property.

What does an appraiser do?   (Back to top)

An appraiser provides an impartial and well justified assessment of market value, in the support of real property exchanges. Appraisers exhibit their expert findings in appraisal reports.


What are the reasons someone would request services from Northern Nevada Appraisal Services, LLC?   (Back to top)

There are many reasons to order an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for ordering an report include:
  • To obtain a loan.
  • To lower your property taxes.
  • To show a homeowner has 30% equity and remove PMI.
  • To contest high property taxes.
  • To deal with an estate.
  • To provide you a leg-up when purchasing a home.
  • To determine a likely sales price when listing your home.
  • To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Government agencies such as the IRS need an appraisal on every home.
  • It's possible you could be involved in a lawsuit - an appraisal will definitely help.
Click here for a more extensive explanation of the process about getting an appraisal.


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

Appraisers do not do provide house inspections and are not home inspectors. A third-party home inspector will inspect the structure of the house, from the roof to the bottom. The general home inspector's report will contain an evaluation of the condition of the home'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.

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

To be blunt, it's night and day. The CMA depends on indefinite market trends. An appraisal is based on comparable sales that can be verified by records. Location and architectural values are also important in an appraisal. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

The person behind the report is hands down the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, create CMA's. 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 collect only a previously agreed upon fee for assignments, regardless of their value conclusion.

What's in an appraisal report?   (Back to top)

The main objective 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.
  • The intended use of the appraisal.
  • The reason for the assignment.
  • Precisely what "value" attribute is being reported and what that value means.
  • 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 characteristics, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible considerations.
  • All 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 used to complete the job.
For a more in depth look at the work that goes into an appraisal report click here: Sample Appraisal Report

Once the appraisal has been completed, what assurance is there that the value indicated is veritable?   (Back to top)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
  • The appraisal contained analysis of the information.

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

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

  • That a trustworthy, substantiated appraisal report was conferred.
To become a state licensed appraiser, we must meet extensive education and experience requirements that give us the background to produce an unbiased opinion. In addition, appraisers must abide by a strict industry code of ethics and observe national standards of practice for real estate appraisal. The rules for working up an appraisal and reporting 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 real world experience. Once an appraiser is licensed, he or she is required to engage in continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who hires an appraiser?   (Back to top)

Mortgage lenders are an appraiser's typical client, using their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does Northern Nevada Appraisal Services, LLC get the data used to estimate values in Washoe County or other areas?   (Back to top)

One of the main things an appraiser does is to gather property data. Data can be categorized as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is received from a number of sources. To research recently sold homes to be used as "comps", we typically go to the local Multiple Listing Service. To double-check actual sales prices, we look at items in the assessor's office and other public documents that are usually online nowadays. Appraisers often 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 gathers general data from his or her past experience in creating appraisals for other houses in the same market.

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

An appraisal is a worthwhile anytime your home's value is pertinent to some financial decision. For those selling a home, you'll want to figure out 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. When buying, you can avoid overpaying by getting an independent appraisal. For those settling an estate or divorce, an appraisal from Northern Nevada Appraisal Services, LLC is the best documentation to ensure assets are split up properly. 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 stands for Private Mortgage Insurance. It takes care of the lender in case a borrower is unable to pay on the loan and the value of the home is less than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

Did you have less than 20% to put down on your mortgage? Contact Northern Nevada Appraisal Services, LLC today at 775-787-1590. You may be able to get rid of your Private Mortgage Insurance payment.

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

The first step in most appraisals is the home inspection. 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. The best thing you can do to help is make sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any bushes and move any items that would get in our way while we measure the structure. On the inside, make sure the appraiser can get to items like furnaces and water heaters.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
  • Any information on the purchase of the property for the last three years.
  • A list of any personal property that will be left behind and sold with the home, such as a oven, or a washer and dryer, if applicable.
  • Title policy that lists encroachments or easements.
  • A list of any major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
  • 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."

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 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 engages an appraiser directly. In these scenarios, the appraiser may define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can use the appraisal for any purpose.

I want to get more for my house. Where should I spend money renovating?   (Back to top)

A home's location - what city it is in and even what part of that city - is key to this popular question. 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. 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 were second, returning 85%. Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.