Scott Appraisal Co. has answers to "Frequently Asked Questions"

Scott Appraisal Co. is ready to address any questions you might have about appraisals in Bartlesville and Washington County. Contact us today to learn how we can help you with your valuation problems.

Describe an appraisal
Describe what an appraiser does
What would cause me to need services from Scott Appraisal Co.?
How is an appraiser different than a home inspector?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What's in an appraisal report?
Upon completion of the appraisal, what assurance is there that the value indicated is trustworthy?
What are the requirements to be a certified appraiser?
Who engages the services of appraisers?
Where does an appraiser get the data used to estimate values in Washington County or other areas?
Why should I hire an appraiser?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Does the appraiser need anything from me in advance?
What is "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   (Top)

An appraisal is a thought process that concludes with an opinion of value. This opinion or estimate is figured using a formal process that generally utilizes any of three "common approaches to value". One of the methods in use is the Cost Approach, which is what it would cost to replace the improvements to the home, less the age and physical deterioration, adding the land value. The Sales Comparison Approach deals with searching for similar properties in close proximity and discovering the value based on comparing those properties to the home in question. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a home. The Income Approach is primarily used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of capital a property would bring in. It is important to understand that an appraisal is an art, not a science. It is an appraiser's Opinion, not a fact to be found.  It is entirely possible that a number of appraisers, all given identical information, could arrive at different opinions for the same property because they are analyzing and predicting how the market is likely to react to the subject property based upon our years of experience and interpretation of the market.  Let us put our years of experience to work for you.  Call us today.  918-333-2700

Describe what an appraiser does   (Top)

An appraiser generates a professional, unbiased assessment of market value, in the support of real property transactions. Appraisers show their conclusions in appraisal reports.


What would cause me to need services from Scott Appraisal Co.?   (Top)

There are a lot of reasons to purchase an appraisal from Scott Appraisal Co. with the usual reason being real estate and mortgage transactions. Other reasons for getting an appraisal include:
  • If you are involved in a divorce and own property.
  • For Estate Planning Purposes.
  • As a precautionary measure, to have a "before value" in the event you have a loss or fire.
  • To lower your tax burden.
  • To build a case for a homeowner's equity and remove PMI.
  • To contest improperly assessed property taxes.
  • If you need to settle an estate.
  • To offer you a leg-up when purchasing real estate or provide advice when listing. 
  • To review possible lender requirements when listing a property.  Minor repairs can often avoid costly Lender Requirements later on. 
  • To figure out the most probable price when putting your home on the market.
  • To ensure parties are provided just compensation in eminent domain cases. 
  • Government agencies such as the IRS need an appraisal on every property.
  • If you are ever involved in a lawsuit.
If you need more information regarding the appraisal process, please click here.


How is an appraiser different than a home inspector?   (Top)

Home inspectors do not generate an opinion of value and do not do appraisal reports. The point of a home inspection is to investigate the structure and condition of the home from foundation to top. For the most part, a home inspection report will evaluate the amenities and the necessities of the home: air conditioning (weather permitting), electrical systems, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, visible 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)?   (Top)

Frankly, they share nothing in common. What the CMA depends on are vague trends, the computer spits out many properties at the touch of a button without regard to adjustments or similarity. Appraisals use similar sales which are valid resources. Also, the appraisal looks at other factors like condition, neighborhood and building costs. All a CMA does is generate a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

The person creating the report is frankly the most significant difference between a CMA and an appraisal. Real estate agents produce CMA's, or more accurately, their MLS systems run a list of properties and shoot out a result page with little to no adjustment, and they don't always know the whole market or have specific competence when it comes to home valuation. An experienced professional who made their livelihood on valuing homes and commercial properties in and around Bartlesville and Washington County creates the appraisal. Likewise, the Real Estate Agent has a vested interest in the property's selling price - their commission - and possibly the listing (by telling the owner it will sell for more than the other Realtors they might visit with, known as "Buying the Listing," only to come back a few weeks later and suggest lowering the price) whereas the appraiser is bound by a code of ethics to provide an unbiased opinion of value and will collect only a previously agreed upon fee for assignments, regardless of their outcome.

What's in an appraisal report?   (Top)

Each appraisal must reflect a credible value opinion and should document the following:
  • Who engaged the appraiser 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 value opinion. (The current value, however it could also be at sometime in the past (Retrospective Appraisal) or maybe the future (Prospective Appraisal) for new construction!)
  • Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible considerations.
  • Any KNOWN easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and the like.  It is important to note that the appraiser seldom has access to the abstract and additional research should be done by interested parties to determine if there are any such conditions that may be adverse to your use. 
  • Division of interest, such as fractional interest, physical segment and partial holding.
  • What was entailed in the process of completing the job.

Upon completion of the appraisal, what assurance is there that the value indicated is trustworthy?   (Top)

In communicating an appraisal report, each appraiser must ensure the following:
  • The appraisal contained an appropriate analysis of the information.

  • That grave 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, credible and conclusive.
To become a state licensed appraiser, an appraiser must meet intense education and experience requirements that enable us to produce an unbiased opinion. Plus, appraisers must abide to high standards when preparing an appraisal. 

   (Top) Regulations regarding licensing and certification are different from state to state. However, licensing and certification is commonly associated with many hours of classroom study, tests and experience working under a supervisory appraiser. Once an appraiser is licensed, he or she is required to 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?   (Top)

Commonly, appraisers are called upon by lenders to estimate the value of a home 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 Washington County or other areas?   (Top)

Collecting information is one of the primary occupations of an appraiser. Data can be described as either 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 collected from a variety of places. To find out about recently sold homes to be used as "comps", we typically use the local Multiple Listing Service. Zoning, lot size and dimensions will come from the local GIS Graphical Information System if available and the zoning office if it's not.  Information can also come from the County Assessor's Office and other public documents. Appraisers routinely need 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 or local GIS information.

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

Why should I hire an appraiser?   (Top)

An appraisal is a worthwhile whenever your home's value is relevant to some financial decision. For those selling a home, you'll want to determine a price that is most likely and gets you the most profit but also ensures you don't over-price the home and have to wait too long for a buyer to show up; an appraisal can help with that. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from Scott Appraisal Co. is the best documentation to ensure assets are divided evenly. A house is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

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

PMI is short for for Private Mortgage Insurance. It takes care of the lender if a borrower doesn't pay on the loan and the value of the home is lower than the balance of 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.

The savings from getting rid of the PMI required when you got your mortgage pays for the appraisal in a matter of months. Scott Appraisal Co. is a name you can trust when it comes to real estate value trends in Bartlesville and Washington County. Contact us today.

Does the appraiser need anything from me in advance?   (Top)

The first step in most appraisals is the home inspection. 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. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and move any items that would make it difficult to measure the structure. Indoors, make sure the appraiser can easily access items like furnaces and water heaters.

To help speed things along as well as ensure a more accurate report, try if possible to have the following items:
  • A survey or plot map of the property and building (if readily available).
  • List of personal property to be sold with the building.
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.
  • Brag sheet that lists major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
  • Information on "Homeowners Associations" or condominium covenants and fees.

What is "Market Value?"   (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?   (Top)

In most real estate transactions, the appraisal is ordered by the Lender who becomes the appraiser's Client. 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 appraisal, but must obtain it from the Lender, not the appraiser - it's usually included with all the other closing documents - but is not entitled to use the report for any other purpose without written permission from the lender and appraiser.

This rule doesn't apply when a home owner engages an appraiser directly. In these scenarios, the appraiser may define 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 use the appraisal for any purpose.

How can I get the most ROI out of home improvements?   (Top)

It really depends on the 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 investment. 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, yielding 85%. Adding bedrooms and baths can also increase the value of your home (when done well) as long as your home doesn't then become atypical for your neighborhood in terms of size.In other words, if most of the houses in your area sell in a particular range of values, people would be likely to pay a little above this for a really nice home, but it is unlikely that the typical buyer would be willing to pay much beyond this range, no matter how nice the house was, it would be considered an Over-Improvement. 

If you're thinking of making improvements, an appraiser can help you to determine where your home fits in the market.