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

Quality Appraisal, LLC is always eager to address any questions you might have about appraisals in SANTA FE and Bernalillo County. Contact us today to see how we can help solve your specific valuation problems.

What is an appraisal?
Describe what an appraiser does
What would cause me to request services from Quality Appraisal, LLC?
What is the difference between an appraisal and a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What are the contents of an appraisal report?
Once the appraisal has been completed, what assurance is there that the final number is veritable?
What does it mean for an appraiser to be licensed?
Who engages the services of appraisers?
Where does an appraiser get the information used to estimate values in Bernalillo County or other areas?
How can a licensed appraiser help me?
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
How does an appraiser define "Market Value"?
Does the appraisal belong to the bank or the consumer?
Which home renovations add the most to the price?



What is an appraisal?   (Back to top)

The appraisal process is an evaluation that leads to an opinion of value. The appraiser must use a few "approaches," typically three, to draw up the estimation of market value. One of the processes in use is the Cost Approach, which is what it would cost to restore the improvements to the home, less the depreciation and physical deterioration, adding the land value. Another of the processes is the Sales Comparison Approach - which concerns finding a comparable analysis to other similar properties within a close vicinity 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 house. One of the least common approaches in appraising residential properties is the Income Approach, which is generally used to figure 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   (Back to top)

An appraiser produces an impartial and well justified opinion of market value, to be used in making real estate transactions. Appraisers summarize their conclusions in appraisal reports.


What would cause me to request services from Quality Appraisal, LLC?   (Back to top)

There are many reasons to obtain an appraisal from Quality Appraisal, LLC with the most common reason being real estate and mortgage transactions. Other reasons for ordering an appraisal include:
  • To get a loan.
  • To lower your tax burden.
  • To demonstrate a homeowner's acquired equity and remove insurance.
  • To contest inflated property taxes.
  • To deal with an estate.
  • To give you a leg-up when purchasing real estate.
  • To determine a likely sales price when listing your home.
  • To defend 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 house.
  • If you are ever involved in a civil case.
Click here for a more extensive explanation of the process about getting an appraisal.


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

Home inspectors do not come to an opinion of value and are not appraisers. An inspection is a third-party evaluation of the livable structure and electrical and mechanical systems of a home, from the top to the foundation. Usually, a home inspection report will explain the amenities and the requirements of the home: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

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

Frankly, they have nothing in common. What the CMA relies upon are ill-defined trends. Appraisals use comparable sales which are verifiable resources. Location and architectural prices are also precedent in an appraisal. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the biggest difference is the person behind the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, generate CMA's. The appraisal is produce by a licensed, certified professional who makes a living out of valuing properties. Moreover, the appraiser is an independent party, with no conditional interest in the value of a home, unlike the real estate agent, whose income is tied to the price of the home.

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

The main objective of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, you'll usually 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 reported and a definition of that value.
  • The effective date of the appraiser's opinions and conclusions.
  • 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.
  • 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.
  • The scope of work considered when completing the job.
For a more detailed view of 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 final number is veritable?   (Back to top)

In communicating an appraisal report, each appraiser must ensure the following:
  • The appraisal used an apropos analysis of the data.

  • 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.

  • The final appraisal report was easy to explain, credible and defensible.
To become a state licensed appraiser, there are strenuous education requirements as well as on the jobexperience that must be attained - all with the objective of being able to provide unbiased value opinions. Likewise, appraisers must abide by a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for working up an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Back to top) Regulations regarding licensing and certification are different from state to state. In general, licensing and certification is commonly associated with many hours of classroom study, tests and practical experience. Once an appraiser is licensed, he/she must then complete 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)

Most of the time, appraisers are called upon by mortgage lenders to estimate the value of a house involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does an appraiser get the information used to estimate values in Bernalillo County or other areas?   (Back to top)

Gathering data is one of the primary occupations of an appraiser. Data can be divided into Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is collected from a variety of sources. To research recent sales to be used as "comps", we often go to the local Multiple Listing Service. To verify actual sales prices, we use items in the assessor's office and other public documents that are usually online nowadays. Appraisers often need 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 last but not least, the appraiser assimilates general data from his or her collective knowledge gained from doing assignments for other properties in the same market.

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

An appraisal is a valuable tool whenever your home's value is relevant to a financial decision. If you're selling your house, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making wise financial decisions.

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

PMI stands for Private Mortgage Insurance. This added plan guards the lender if a borrower defaults on the loan and the market price of the property is less than what the borrower still owes on the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.

Is PMI a part of your monthly house payment?Call Quality Appraisal, LLC today at 505-315-7344 or send us an e-mail. A current appraisal could save you thousands.

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

We start with an inspection of the property. 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. Inside, make sure it is clutter free and that we can access 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 as well as ensure a more accurate report, attempt if possible to have the following items:
  • Any information on the purchase of the property for the last three years.
  • Written property agreements, such as a maintenance agreement for a shared driveway.
  • Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
  • 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).
  • Find copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.

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. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is entitled to a copy of the appraisal - it's usually bundled with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these cases, the appraiser may stipulate 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.

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

The added value of a particular amenity truly depends on the local market. 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.

No matter where you go, however, renovating a kitchen is almost always a safe move. 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, returning 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.