Tim Norris & Associates has answers to "Frequently Asked Questions"


	Tim Norris & Associates is always prepared to answer any concerns you might have about appraisals or real estate in Fort Wayne and Allen County. Feel free to contact us today.

What is an appraisal?
Describe what an appraiser does
What would cause me to need services from Tim Norris & Associates?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
After completing the appraisal, what assurance is there that the value indicated is veritable?
What are the requirements to be a certified appraiser?
Who are an appraiser's customers?
Where does an appraiser get the information used to estimate values in Allen County or other areas?
How can a licensed appraiser help 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?"
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? (List of questions)

The method of creating an appraisal report deals with an estimation which leads to an opinion of value. There are three "common approaches to value" which helps the real estate appraiser arrive at this opinion or estimate. One of the methods in use is the Cost Approach, which is what it would cost to replace the improvements to the house, less the age and physical dilapidation, adding the land value. The Sales Comparison Approach deals with searching for similar homes in the vicinity and finding value based on making a comparison of those prior sales to the house being investigated. The Sales Comparison Approach is normally the most accurate and clearest indicator of a liklely sales price for a home. 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 (List of questions)

An appraiser generates an unbiased and well supported assessment of market value, to be used in making real estate transactions. Appraisers document their conclusions in appraisal reports.

What would cause me to need services from Tim Norris & Associates? (List of questions)

There are many reasons to order an appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for getting an appraisal report include:

If you are applying for a loan.
To lower your tax burden.
To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
To contest inflated property taxes.
To settle an estate.
To provide you a negotiating tool when purchasing a home.
To find the most probable property value when selling real estate.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Because a government agency such as the IRS requires it.
If you ever find yourself in a civil case.

For a more extensive explanation of the appraisal process click here.

What is the difference between an appraisal and a home inspection? (List of questions)

Appraisers do not do provide house inspections and are not home inspectors. The point of a home inspection is to investigate the structure of the home from bottom to rooftop. Generally, a home inspection report will evaluate the amenities and the necessities of the house: air conditioning (weather permitting), electrical services, 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.

Is an appraisal the same as a comparative market analysis(CMA)? (List of questions)

To be blunt, it's like comparing opera to country. The CMA relies on indefinite market trends. Appraisals use comparable sales which are valid resources. The appraisal report will also include location and construction prices. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the largest differentiator is the person creating the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. A certified, Indiana licensed professional who has formed a career on valuing real estate in and around Allen County is behind the appraisal. Moreover, the appraiser is an independent party, with no conditional interest in the property's value, unlike the real estate agent, who gets a commission based upon the value of the home.

What can I expect to see in my appraisal report? (List of questions)

Each appraisal should demonstrate a supported estimate of value and must identify the following:

Who engaged the appraiser and other intended users.
How the appraisal is supposed to be used.
The appraisal's purpose.
The type of value contained and a definition of the value reported.
The effective date of the appraisal.
Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible items.
Any 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.
What was included in the activity of completing the assignment.

For a more in depth view of all that goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, what assurance is there that the value indicated is veritable? (List of questions)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:

That the information analysis implemented in the appraisal was suitable.

Whether individually or collectively, there were no critical errors contained in the appraisal, nor any material details left out.

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

The final appraisal report was transparent, sound and defensible.

To become a state licensed appraiser, there are intense education requirements as well as practical experience that must be attained - all with the end goal of being able to provide unbiased value opinions. Plus, appraisers must follow a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The rules for carrying out an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(List of questions) Regulations regarding licensing and certification vary from state to state. In general, licensing and certification typically translates to many hours of coursework, tests and practical experience. Once an appraiser is licensed, he or she is required to complete continuing education courses so the license remains current. To see the specific requirements for any state click here.

Who are an appraiser's customers? (List of questions)

Commonly, appraisers are employed by lenders to render a value opinion on real estate involved in a loan transaction - to make sure the real estate is truly adequate collateral for the loan. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does an appraiser get the information used to estimate values in Allen County or other areas? (List of questions)

One of the primary tasks an appraiser performs is to assimilate property data. Data can be described as either Specific or General. Specific data is taken from the home itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is gathered from a many 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 product.

And most importantly, the appraiser assimilates general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.

How can a licensed appraiser help me? (List of questions)

An appraisal is a valuable tool whenever the value of your home is relevant to a financial decision. 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 people settling an estate or divorce, an appraisal from Tim Norris & Associates is the best documentation to ensure assets are divided fairly. A home is often the single, largest financial asset anybody owns. Knowing its true value means you can make smart financial decisions.

What exactly is PMI and how can I get rid of it? (List of questions)

PMI is the common abbreviation for for Private Mortgage Insurance. This additional policy guards the lender if a borrower defaults on the loan and the value of the home is less than what is owed 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.


	Has your real estate appreciated since you first purchased? Call Tim Norris & Associates today at 260 471-1061 to see if you can get rid of your Private Mortgage Insurance payment.

How do I get ready for the appraiser? (List of questions)

We begin 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 features. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any shrubs and relocate any items that would make it difficult to measure the structure. Indoors, make sure we can easily access appliances like furnaces and water heaters.

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

A survey or plot map of the property and building (if readily available).
Information on any written private easements, such as a shared driveway with a neighbor.
Most recent real estate tax bill from Allen and or legal description of the property.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
A list of "proposed" improvements if the property is to be appraised "as complete".

What is "Market Value?" (List of questions)

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."

Does the appraisal belong to the bank or the consumer? (List of questions)

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 included 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 define 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.

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

This really depends on where the home is. For example, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!

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, returning 85%. Adding bedrooms and baths can also help 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.