McIsaac Appraisals has answers to "Frequently Asked Questions"


	McIsaac Appraisals is always willing to talk to you about any inquiries you might have about appraisals or real estate in Dillon and Beaverhead County. Feel free to contact us today.

What is an appraisal?
Describe what an appraiser does
Why would a person need your services?
What is the difference between an appraisal and a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What does the appraisal report contain?
Upon completion of the report, how can I have a guarantee that the value indicated is valid?
How are appraisers certified?
Who engages the services of appraisers?
Where does an appraiser get the information used to estimate values in Beaverhead County or other areas?
What can a full appraisal do for me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Does the appraiser need anything from the homeowner 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?

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

An appraisal is an estimation allowing the appraiser to come to an opinion of value. The appraiser must use a few "approaches," typically three, to conclude the estimation of market value. One of the processes in use is the Cost Approach, which evaluates what it would cost to replace the improvements to the home, less the depreciation and physical dilapidation, adding the land value. Another of the methods is the Sales Comparison Approach - which involves finding a comparison to other similar properties within a close vicinity which have recently sold. Usually, the Sales Comparison Approach is the most definite indicator of market value of a home. The Income Approach is primarily used for finding the market value of income-producing properties based on what an investor would pay based on the amount of income a property would bring in.

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

An appraiser produces an objective and well substantiated determination of market value, in the support of real estate transactions. Appraisers demonstrate their professional analysis in appraisal reports.

Why would a person need your services? (See list of FAQ's)

There are many reasons to obtain an appraisal from McIsaac Appraisals with the usual reason being real estate and mortgage transactions. Some other reasons for purchasing an report include:

To obtain a loan.
If you would like to reduce your property tax obligations.
To demonstrate a homeowner's acquired equity and remove PMI.
To fight inflated property taxes.
If you need to take care of an estate.
To give you a leg-up when purchasing a home.
To figure out a reasonable sales price when putting your home on the market.
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 property.
If you are ever involved in a civil case.

Click here for a more detailed explanation of the process involved in getting an appraisal.

What is the difference between an appraisal and a home inspection? (See list of FAQ's)

Appraisers do not do complete home inspections and are not home inspectors. The point of a home inspection is to investigate the structure of the house from bottom to rooftop. The stereotypical house inspector's report will include an evaluation of the integrity of the property's heating system, 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)

To be honest, they have nothing in common. What the CMA depends on are superficial trends. The appraisal is reliant on similar verifiable comparable sales. In addition, the appraisal checks other factors like condition, location and replacement costs. 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.

But the largest differentiator is who's creating the report. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, state licensed professional who has formed a career on valuing homes in and around Beaverhead County creates the appraisal. Further, the appraiser is an independent voice, with no conditional interest in the value conclusion, unlike the agent, whose income is tied to the value of the home.

What does the appraisal report contain? (See list of FAQ's)

The main point 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:

Who engaged the appraiser and whose purposes the appraisal is to serve.
How the appraisal is supposed to be used.
The appraisal's purpose.
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 real property interest valued, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible items.
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 look at all that goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the report, how can I have a guarantee that the value indicated is valid? (See list of FAQ's)

In the documentation of an appraisal, each appraiser must make sure of the following:

The appraisal contained analysis of the information.

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

That appraisal services were provided in a careful and cognizant manner.

That a credible, supportable appraisal report was communicated.

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 gaining the skills required to render unbiased value opinions. Plus, appraisers must obey a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(See list of FAQ's) Licensing and certification requires classroom study, tests and experience working under a supervisory appraiser. Once an appraiser is licensed, he or 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? (See list of FAQ's)

Mortgage lenders are an appraiser's typical client, needing their services to ensure property 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 information used to estimate values in Beaverhead County or other areas? (See list of FAQ's)

One of the primary things an appraiser does is to gather data. Data can be described 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 collected from a numerous places. Local Multiple Listing Services (MLS) provide data on recently sold homes that might be used as comparables. Tax records and other public documents reveal actual sales prices in a market. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood servers.

And last but not least, the appraiser gathers general data from his or her collective knowledge gained from creating appraisals for other properties in the same market.

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

An appraisal is a worthwhile whenever the value of your home is pertinent to a financial decision. When selling your home, an appraisal assists you in setting the most appropriate price. When buying, you can avoid overpaying by getting an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. Simply put, a house 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? (See list of FAQ's)

PMI stands for Private Mortgage Insurance. PMI covers the lender if a borrower defaults on the loan and the market price of the house is less than what is owed 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.


	Did you secure your mortgage with less than 20% down? Contact McIsaac Appraisals today at 406-683-4013 to see if you can cancel your Private Mortgage Insurance premium.

Does the appraiser need anything from the homeowner in advance? (See list of FAQ's)

We begin with an inspection of the home. 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. The best thing you can do to help is make 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. On the inside, make sure the appraiser can easily access appliances like furnaces and water heaters.

You can make our visit go faster and improve the quality of the appraisal report by having the following things on hand:

Written property agreements, such as a maintenance easement for a shared driveway.
List of personal property to be sold with the home.
Information on "Homeowners Associations" or condominium covenants and fees.
Brag sheet that lists major home improvements and enhancements, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
A bill for your most recent real estate taxes which should also contain a legal description of the property.

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."

Does the appraisal belong to the bank or the consumer? (See list of FAQ's)

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 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.

This rule doesn't apply when a home owner hires an appraiser directly. In these scenarios, the appraiser may state 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.

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.

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 are right up there with kitchens, yielding 85%. On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.