BOUSQUET APPRAISAL SERVICE has answers to "Frequently Asked Questions"

BOUSQUET APPRAISAL SERVICE is always eager to reply to any concerns you might have about appraisals in Worcester County. Contact BOUSQUET APPRAISAL SERVICE today to talk about how we can help solve your specific valuation problems.

Define the term "Appraisal"
Describe what an appraiser does
What would cause me to need a real estate appraisal?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What's in an appraisal report?
After completing the appraisal, what guarantee is there that the value conclusion is accurate?
How hard is it to become certified?
Who are an appraiser's customers?
Where does an appraiser get the data used to estimate values in Worcester County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What is "Market Value?"
Who actually owns the appraisal report?
How can I get the most ROI out of home improvements?



Define the term "Appraisal"   (See list of FAQ's)

The method of writing an appraisal report consists of an inspection which forms an opinion of value. This opinion or estimate is figured through the use of a formal method that typically uses three "common approaches to value". One of them is the Cost Approach - which is how much capital would be required to replace the improvements, minus physical deterioration and other factors, plus the land value. Another of the methods is the Sales Comparison Approach - which concerns making a comparison to other similar properties within a close vicinity which have recently sold. Being the most common approach, the Sales Comparison Approach is considered the most precise and best indicator of market value for a house. The third approach is the Income Approach, which is of most importance in appraising income producing properties - it involves estimating what an investor would pay based on the capital generated by the property.

Describe what an appraiser does   (See list of FAQ's)

An appraiser generates an unprejudiced and well justified determination of market value, in the support of real property exchanges. Appraisers illustate their professional conclusions in appraisal reports.


What would cause me to need a real estate appraisal?   (See list of FAQ's)

There are many reasons to purchase an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for ordering an appraisal include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax obligations.
  • To demonstrate a homeowner's acquired equity and remove PMI.
  • To contest high property taxes.
  • If you need to settle an estate.
  • To offer you a leg-up when purchasing a home.
  • To find a likely price when selling your home.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because a government agency such as the IRS requires it.
  • If you are ever involved in a civil case.
For a more extensive explanation of the appraisal process click here.


How is an appraisal different than a home inspection?   (See list of FAQ's)

Appraisers do not do perform residential property inspections and are not home inspectors. The purpose of a home inspection is to investigate the structure of the home from basement to top. The usual home 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.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (See list of FAQ's)

Frankly, it's like comparing opera to country. The CMA relies on indistinct trends in the market. An appraisal utilizes comparable sales that can be verified by public record. The appraisal report will also include neighborhood and construction prices. The CMA will provide a non-specific figure. Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

Who's behind the report is frankly the biggest difference between a CMA and an appraisal. Real estate agents write CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to accept a previously agreed upon fee for work they perform, regardless of their outcome.

What's in an appraisal report?   (See list of FAQ's)

Every report should indicate a credible value opinion and will clearly state 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.
  • The type of value reported and a definition of the value reported.
  • The effective date of the appraiser's opinions and conclusions.
  • Relevant property characteristics, including: location, physical description, legal attributes, economic attributes, the property rights in question, and non-real estate items included in the valuation, such as personal property, permanent equipment installations 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 entailed in the activity of completing the job.
For a more detailed view of the work that goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, what guarantee is there that the value conclusion is accurate?   (See list of FAQ's)

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

  • Whether individually or collectively, there were no significant errors contained in the report, nor any material details left out.

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

  • The final appraisal report was easy to explain, legitimate and defensible.
To become a state licensed appraiser, there are strenuous education requirements as well as real world experience that must be attained - all with the end goal of being able to render unbiased value opinions. Likewise, appraisers must follow a strict industry code of ethics and respect national standards of practice for real estate appraisal. The rules for developing an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (See list of FAQ's) Licensing and certification takes coursework, tests and experience working under a supervisory appraiser. Once 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 are an appraiser's customers?   (See list of FAQ's)

Mortgage lenders are an appraiser's most likely customer, requesting their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does an appraiser get the data used to estimate values in Worcester County or other areas?   (See list of FAQ's)

Gathering information is one of the main tasks an appraiser performs. Data can be classified as either Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.

General data is received from a number of places. Local Multiple Listing Services (MLS) provide information on recently sold homes that might be used as comparables. To verify actual sales prices, we use items in the assessor's office and other public documents that are usually online nowadays. Flood zone data is gathered 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 houses in the same market.

What can a full appraisal do for me?   (See list of FAQ's)

An appraisal is a worthwhile anytime the value of your home is pertinent to a financial decision. If you're selling your house, an appraisal will help you determine the most appropriate price. When buying, you can avoid overpaying by getting an independent appraisal. For those settling an estate or divorce, an appraisal from BOUSQUET APPRAISAL SERVICE is the best way to ensure assets are split up properly. Simply put, a home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

What exactly is PMI and how can I get rid of it?   (See list of FAQ's)

PMI is the common abbreviation for for Private Mortgage Insurance. PMI takes care of the lender in case a borrower defaults on the loan and the market price of the home is less 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.

The amount you keep from cancelling your PMI pays for the appraisal in a matter of months. BOUSQUET APPRAISAL SERVICE is a name you can trust when it comes to real estate value trends in Southbridge and Worcester County. Contact us today.

How do I get ready for the appraiser?   (See list of FAQ's)

The first step in most appraisals is the property inspection. 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. The best thing you can do to help is make sure the appraiser has easy access to the exterior of the house . Trim any shrubs and move any items that would get in our way while we measure the structure. On the inside, make sure the appraiser can easily access items like furnaces and water heaters.

You can make the inspection go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • Information on the latest purchase of the property in the last three years.
  • List of personal property to be sold with the building.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
  • A list of any major home improvements and enhancements, 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).
  • A list of "proposed" improvements when the property is being appraised "as complete".

What is "Market Value?"   (See list of FAQ's)

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 actually owns the appraisal report?   (See list of FAQ's)

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 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.

This rule doesn't apply when a home owner engages an appraiser directly. In these cases, the appraiser may define how the appraisal can be used; 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.

How can I get the most ROI out of home improvements?   (See list of FAQ's)

It really depends on the market. 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.

No matter where you go, however, renovating a kitchen is almost always a safe move. 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, returning 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 an oddball for your neighborhood in terms of size.