Glasgow & Associates, LLC has answers to "Frequently Asked Questions"


	Glasgow & Associates, LLC is happy to elaborate on any inquiries you might have about appraisals or real estate in Riva and Anne Arundel County. Contact Glasgow & Associates, LLC today to talk about how we can help solve your valuation problems.

Describe an appraisal
What does an appraiser do?
What are the reasons a person would request a real estate appraisal?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Once the report is done, how can I have assurance that the value indicated is accurate?
How are appraisers certified?
Who are an appraiser's customers?
Where does Glasgow & Associates, LLC get the data used to estimate values in Anne Arundel County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
Do you need anything from the homeowner in advance?
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?

Describe an appraisal (Return to top)

An appraiser performs an evaluation that produces an opinion of value. The real estate appraiser will typically use a several "approaches," typically three, to draw up the estimation of market value. One of the methods in use is the Cost Approach, which is what it would cost to restore the improvements to the house, less the age and physical dilapidation, adding the land value. The Sales Comparison Approach involves searching for comparable houses in the vicinity and discerning value based on making a comparison of those homes to the property being appraised. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a residential property. The Income Approach is generally 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.

What does an appraiser do? (Return to top)

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

What are the reasons a person would request a real estate appraisal? (Return to top)

There are many reasons to get an appraisal from Glasgow & Associates, LLC with the usual reason being real estate and mortgage transactions. Other reasons for obtaining an appraisal report include:

To receive a loan.
To reduce your tax burden.
To show a homeowner has 30% equity and remove insurance.
To contest high property taxes.
To deal with an estate.
To give you a negotiating tool when purchasing a home.
To find an honest sales price when listing your home.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Government agencies such as the IRS require an appraisal on every home.
It's possible you could be involved in a lawsuit - an appraisal will help.

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

How is an appraisal different than a home inspection? (Return to top)

The appraiser is not a home inspector and does not do a complete home inspection. A third-party home inspector will judge the structure of the home, from the top to the foundation. The standard home inspector's report will include an evaluation of the condition of the house's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and visible 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)

To be honest, they have nothing in common. The CMA depends on indistinct market trends. An appraisal utilizes comparable sales that can be validated by records. Also, the appraisal checks other factors like condition, area and construction costs. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

But the largest differentiator is the person doing the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. 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 value of the home.

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

Each appraisal must demonstrate a credible value opinion and should identify the following:

The client and other intended users.
The intended use of the report.
The appraisal's purpose.
The type of value contained and a definition of the value reported.
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 description, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed and even intangible factors.
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 assignment.

For a more comprehensive look at all that goes into an appraisal report click here: Sample Appraisal Report

Once the report is done, how can I have assurance that the value indicated is accurate? (Return to top)

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

The appraisal contained analysis of the data.

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

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

The final appraisal report was easy to explain, credible and conclusive.

To become a state licensed appraiser, we must satisfy considerable education and experience requirements that enable us to produce an unbiased opinion. Plus, appraisers must stick to a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The rules for carrying out an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Return to top) Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. However, licensing and certification is most often associated with many hours of coursework, tests and real world experience. Once an appraiser is licensed, he or she must then take 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? (Return to top)

Mortgage lenders are an appraiser's typical client, needing their services to ensure property involved in a mortgage transaction is enough to cover a loan balance in the case of default. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does Glasgow & Associates, LLC get the data used to estimate values in Anne Arundel County or other areas? (Return to top)

Gathering information is one of the primary functions of an appraiser. Data can be described as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specifics are gathered by the appraiser during an inspection.

General data is gathered from a variety of sources. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. Tax records and other courthouse documents verify actual sales prices in a market. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood servers.

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.

Why should I hire a licensed appraiser? (Return to top)

An appraisal is a worthwhile whenever your home's value is pertinent to a financial decision. For those selling a home, you'll want to figure out a 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, you can avoid overpaying by getting an independent appraisal. For those settling an estate or divorce, an appraisal from Glasgow & Associates, LLC is the best documentation to ensure assets are divided properly. 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? (Return to top)

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


	Is PMI something increasing your monthly mortgage payment?Call Glasgow & Associates, LLC today at 410.956.3234 or send us an e-mail. Documentation of your home's current value could save you thousands.

Do you need anything from the homeowner in advance? (Return to top)

We start with an inspection of the property. 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 amenities. Inside, pick up any clutter and make sure 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:

Any information on the purchase of the property for the last three years.
A list of any personal property that is part of the home and you intend to be sold with the home, such as an oven, or a washer and dryer, if applicable.
Information on "Homeowners Associations" or condominium covenants and fees.
A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
Most recent real estate tax bill and or legal description of the property.

What is "Market Value?" (Return to top)

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? (Return to top)

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 entitled to a copy of the report - it's usually bundled with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner hires an appraiser directly. In these situations, 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 do whatever they want with the appraisal.

Are some home improvements more worthwhile than others? (Return to top)

It really depends on the market. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

As a rule, the most value returned from renovating a home comes in the kitchen. 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, yielding 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.