DataSource Appraisal has answers to "Frequently Asked Questions"

DataSource Appraisal is always eager to elaborate on any concerns you might have about appraisals or real estate in Bettendorf and Scott County. Feel free to contact us today.

Describe an appraisal
Describe what an appraiser does
What would cause me to require a real estate appraisal?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What's in an appraisal report?
After completing the report, what assurance is there that the value indicated is accurate?
What does it mean for an appraiser to be licensed?
Who do appraisers work for?
Where does DataSource Appraisal get the information used to estimate values in Scott County or other areas?
Why should I hire a licensed appraiser?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal appointment
What does "Market Value" mean?
Who has rights to the appraisal report?
Are some home improvements more worthwhile than others?



Describe an appraisal   (Return to top)

An appraisal report is an inspection allowing the appraiser to come to an opinion of value. There are three "common approaches to value" which assists the real estate appraiser come to this opinion or estimate. One of the methods in use is the Cost Approach, which finds what it would cost to replace the improvements to the house, less the age and physical deterioration, plus the land value. The Sales Comparison Approach deals with searching for similar properties in the vicinity and discerning value based on making a comparison of those homes to the home being appraised. The Sales Comparison Approach is commonly the most definitive and clearest indicator of a liklely sales price for a house. One of the least common approaches in appraising houses is the Income Approach, which is mainly used to determine 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 produces an unbiased and well supported assessment of market value, in the support of real property exchanges. Appraisers demonstrate their expert investigation in appraisal reports.


What would cause me to require a real estate appraisal?   (Return to top)

There are a lot of reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for getting an report include:
  • If you are applying for a loan.
  • To reduce your property taxes.
  • To build a case for a homeowner's equity and remove PMI.
  • To fight high property taxes.
  • To settle an estate.
  • To give you a leg-up when purchasing real estate.
  • To figure out an honest sales price when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • 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.
Click here for a more detailed explanation of the process dealing with getting an appraisal.


How is an appraiser different than a home inspector?   (Return to top)

Home inspectors do not estimate an opinion of value and do not use the same forms as appraisers. The purpose of a home inspection is to investigate the structure of the home from basement to rooftop. The standard house inspector's report will include an evaluation of the condition of the property'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.

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

Simply, they share nothing in common. The CMA depends on indefinite market trends. The appraisal is reliant on similar verifiable comparable sales. Also, the appraisal looks at other factors like condition, location and construction 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.

But the biggest difference is who's behind 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. Further, the appraiser is an unbiased party, with no conditional interest in the value conclusion, unlike the real estate agent, whose income is tied to the value of the home.

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

Each report must demonstrate a believable value opinion and will clearly state the following:
  • The client and whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The purpose of the appraisal.
  • 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!)
  • Relevant property attributes, including: location, physical description, legal attributes, economic factors, the property rights valued, and non-real estate items included in the appraisal, such as personal property, trade fixtures 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.
  • What was included in the process of completing the assignment.
For a more comprehensive look at all that goes into an appraisal report click here: Sample Appraisal Report

After completing the report, what assurance is there that the value indicated is accurate?   (Return to top)

In communicating an appraisal report, each appraiser must make sure of the following:
  • That the information analysis contained in the appraisal was appropriate.

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

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

  • The final appraisal report was clear, legitimate and defensible.
To become a state licensed appraiser, there are education requirements as well as experience that must be attained - all with the objective of being able to render unbiased value opinions. Likewise, appraisers must obey 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) Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. In general, licensing and certification is commonly associated with many hours of coursework, tests and real world experience. Once licensed, he or she is required to take continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who do appraisers work for?   (Return to top)

Mortgage lenders are an appraiser's most likely client, requesting their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does DataSource Appraisal get the information used to estimate values in Scott County or other areas?   (Return to top)

One of the primary activities of an appraiser is to compile data. Data can be split into Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.

General data is received from a variety of places. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Appraisers often have to report when a property lies in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And most importantly, the appraiser assimilates general data from his or her past experience in doing assignments for other houses in the same market.

Why should I hire a licensed appraiser?   (Return to top)

If you're involved in any kind of financial decision and the value of your home is relevant, you'll want a full appraisal. If you're selling your home, an appraisal helps you set a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from DataSource Appraisal is the best way to ensure assets are divided evenly. A home is often the single, largest financial asset anybody owns. Knowing its true value means you can make informed financial decisions.

My mortgage statement has an item on it for PMI? Can I get rid of that?   (Return to top)

PMI is an acronym for Private Mortgage Insurance. It takes care of the lender in case a borrower doesn't pay on the loan and the market price of the home is lower than what the borrower still owes 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 DataSource Appraisal today at (563)355-9310 to see if you can get rid of your Private Mortgage Insurance premium.

Should I do anything in advance of the appraisal appointment   (Return 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, pick up any clutter and make sure we can get to things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of exterior walls.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
  • Records on the latest purchase of the property in the last three years.
  • List of personal property to be sold with the home.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
  • A list of any major home improvements and enhancements, 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 "proposed" improvements when the property is being 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 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 certainly 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.

The exception to this rule is when a home owner hires 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.

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

Like all things real estate, this is dependent on a home's location. 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. 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, yielding 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.