Independent Appraisal Services, LLC has answers to "Frequently Asked Questions"

Independent Appraisal Services, LLC is willing to handle any questions you might have about appraisals or real estate in Waukesha and Waukesha County. Contact Independent Appraisal Services, LLC today to talk about how we can help solve your specific valuation problems.

Describe an appraisal
What does an appraiser do?
Why would someone request a real estate appraisal?
Is an appraisal the same as a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
After completing the appraisal, how can I have certainty that the value indicated is valid?
What are the requirements to be a certified appraiser?
Who engages the services of appraisers?
Where does Independent Appraisal Services, LLC get the data used to estimate values in Waukesha 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
Define "Market Value"
Who actually owns the appraisal report?
Which home renovations add the most to the price?



Describe an appraisal   (Return to top)

The appraisal process is an evaluation that produces an opinion of value. This opinion or estimate is found through a formal method that typically uses three "common approaches to value". One of the methods is the Cost Approach - which is how much it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value. The most common approach in finding the value of a home is the Sales Comparison Approach which involves figuring a comparison to comparable houses close by. Being the most common approach, the Sales Comparison Approach is generally the most precise and best indicator of market value for a property. The third approach is the Income Approach, which is the best method in appraising income producing properties - it involves estimating what an investor would pay based on the income generated by the property.

What does an appraiser do?   (Return to top)

An appraiser offers a professional, unbiased assessment of market value, to be used in making real estate transactions. Appraisers reveal the details of their expert analysis in appraisal reports.


Why would someone request a real estate appraisal?   (Return to top)

There are many reasons to order an appraisal from Independent Appraisal Services, LLC with the most common reason being real estate and mortgage transactions. Some other reasons for obtaining an appraisal report include:
  • If you are applying for a loan.
  • To reduce your tax burden.
  • To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
  • To fight improperly assessed property taxes.
  • To handle an estate.
  • To give you a leg-up when purchasing a home.
  • To find the most probable 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 property.
  • If you are ever involved in a civil case.
For a more detailed description of the appraisal process click here.


Is an appraisal the same as a home inspection?   (Return to top)

The appraiser is not a home inspector and he or she does not do a full home inspection. The point of a home inspection is to evaluate the structure of the house from basement to attic. The stereotypical property inspector's report will contain an evaluation of the integrity 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.

Is an appraisal the same as a comparative market analysis(CMA)?   (Return to top)

Honestly, they have nothing in common. The CMA utilizes market trends to create most of their business. The appraisal relies on specific verifiable comparable sales. In addition, the appraisal looks at other factors like condition, location 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.

But the most significant factor is the person creating the report. A CMA is written by a real estate agent who may or may not have a true grasp of the market or valuation concepts. A certified, Wisconsin licensed professional who made their livelihood on valuing properties in and around Waukesha County is behind the appraisal. Further, the appraiser is an unbiased voice, with no conditional interest in the property's value, unlike the real estate agent, who gets a commission based upon the price of the home.

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

Every report must indicate a credible value opinion and will identify the following:
  • The client and other intended users.
  • 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 value opinion.(Sometimes this is in the past or maybe the future for new construction!)
  • Relevant property characteristics, including: location, physical description, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible considerations.
  • Any 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 included in the activity of completing the job.
For a more detailed view of what goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, how can I have certainty that the value indicated is valid?   (Return to top)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
  • That the information analysis implemented in the appraisal was proper.

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

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

  • The final appraisal report was easy to explain, sound and defensible.
To become a state licensed appraiser, there are extensive education requirements as well as real world experience that must be logged - all with the end goal of being able to provide unbiased value opinions. Plus, appraisers must abide by a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The rules for working up an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Return to top) Licensing and certification requires classroom study, tests and practical experience. Once an appraiser is licensed, he or she must then complete continuing education courses so the license stays up to date. To see the specific requirements for any state click here.

Who engages the services of appraisers?   (Return to top)

Mortgage lenders are an appraiser's typical client, needing their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does Independent Appraisal Services, LLC get the data used to estimate values in Waukesha County or other areas?   (Return to top)

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

General data is received from a number of sources. Local Multiple Listing Services (MLS) provide data on recently sold homes that could be used as comparables. To verify actual sales prices, we use tax records 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 system.

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

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

If you're making any kind of financial decision and the value of your home is relevant, you'll want a full appraisal. For those selling a home, you'll want to determine the price that gets you the most profit but also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. When buying, be sure you're not overpaying by commissioning 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 means you can make wise financial decisions.

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

PMI is the common abbreviation for for Private Mortgage Insurance. This added policy protects the lender in the event a borrower is unable to pay on the loan and the market price of the house is lower than the loan balance. 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.

Does your monthly house payment have a lineitem for PMI?Call Independent Appraisal Services, LLC today at 262.549.0201 or send us an e-mail. A current appraisal could save you thousands.

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

The first step in most appraisals is the home 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 status of its features. On the home's interior, 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.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
  • Records on the latest purchase of the property in the last three years.
  • Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
  • Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
  • Brag sheet that lists major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
  • A list of "suggested" improvements when the property is being appraised "as complete".

Define "Market Value"   (Return 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."

Who actually owns the appraisal report?   (Return to top)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. 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 report - 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 engaging 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 use the appraisal for any purpose.

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

It really depends on the market. 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 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 were second, returning 85%. Adding bedrooms and baths can also boost the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.