RSJ Appraisals has answers to "Frequently Asked Questions"


	RSJ Appraisals is eager to handle any inquiries you might have about appraisals or real estate in Milwaukee County. Contact us today to learn how we can help you with your specific valuation problems.

Describe an appraisal
What does an appraiser do?
What would cause me to need services from RSJ Appraisals?
Is an appraisal the same as a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
Once the appraisal has been delivered, how can I have a guarantee that the final number is legitimate?
How are appraisers certified?
Who are an appraiser's customers?
Where does RSJ Appraisals get the data used to estimate values in Milwaukee County or other areas?
Why should I hire a licensed appraiser?
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 inspection
How does an appraiser define "Market Value"?
Once complete, who actually owns the appraisal report?
How can I get the most ROI out of home improvements?

Describe an appraisal (Back to top)

An appraisal is an evaluation that concludes with an opinion of value. This opinion or estimate is arrived at by using a formal method that typically utilizes the three main "common approaches to value". One of the processes is the Cost Approach - which is how much capital would be required to replace the improvements, minus physical deterioration and other factors, then adding the land value. Another of the processes is the Sales Comparison Approach - which concerns finding a comparison to other similar properties within a close proximity which have recently sold. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a home. One of the least common approaches in appraising residential properties is the Income Approach, which is mainly used to find the value of a property based on what an investor would pay based on the income produced by the property.

What does an appraiser do? (Back to top)

An appraiser provides a fair and credible opinion of market value, in the support of real estate transactions. Appraisers demonstrate their professional findings in appraisal reports.

What would cause me to need services from RSJ Appraisals? (Back to top)

There are a lot of reasons to obtain an appraisal from RSJ Appraisals with the usual reason being real estate and mortgage transactions. Some other reasons for purchasing an appraisal include:

If you are applying for a loan.
If you would like to lower your property tax burden.
To build a case for a homeowner's equity and remove Primary Mortgage Insurance.
To contest inflated property taxes.
If you need to settle an estate.
To provide you an edge when purchasing real estate.
To find a reasonable property value when selling your home.
To protect your rights if your property is being taken by means of eminent domain in a condemnation case.
Because an official agency such as the IRS requires it.
If you ever find yourself in a civil case.

For a more detailed description of the appraisal process click here.

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

The appraiser is not a home inspector and he or she does not do a full home inspection. An inspection is a third-party evaluation of the livable structure and electrical and mechanical systems of a property, from the roof to the bottom. Usually, a home inspection report will evaluate the amenities and the requirements of the property: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

What is the difference between an appraisal and a comparative market analysis (CMA)? (Back to top)

Simply put, it's like comparing Shakespeare to reality TV. What the CMA depends on are vague trends. The appraisal is reliant on specific valid comparable sales. Area and building values are also a priority in an appraisal. All a CMA does is generate a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

Who's creating the report is frankly the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, create CMA's. A certified, Wisconsin licensed professional who has formed their livelihood on valuing homes in and around Milwaukee County is behind the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a flat fee for assignments, regardless of their outcome.

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

The main purpose of an appraisal document is to provide a value opinion, 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.
The intended use of the report.
The purpose of the assignment.
The type of value contained and a definition of that value.
The effective date of the appraiser's opinions and conclusions.
Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible factors.
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.
The scope of work used to complete the assignment.

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

Once the appraisal has been delivered, how can I have a guarantee that the final number is legitimate? (Back to top)

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

The appraisal contained an appropriate analysis of the data.

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

That appraisal services were done in a careful and conscientious fashion.

That a believable, defensible appraisal report was conferred.

To become a state licensed appraiser, we must meet intense education and experience requirements that prepare us to produce an unbiased opinion. In addition, appraisers must follow a stringent industry code of ethics and respect national standards of practice for real estate appraisal. The rules for working up an appraisal and communicating its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Back to top) Regulations regarding licensing and certification are different from state to state. In general, licensing and certification is most often associated with many hours of coursework, tests and experience working under a supervisor. 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? (Back to top)

Typically, appraisers are called upon by mortgage lenders to render a value opinion on real estate involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does RSJ Appraisals get the data used to estimate values in Milwaukee County or other areas? (Back to top)

Gathering data is one of the primary occupations of an appraiser. Data can be classified as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.

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

And most importantly, the appraiser gathers general data from his or her past experience in creating appraisals for other houses in the same market.

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

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. If you're selling your home, an appraisal will help you determine the most appropriate price. 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 home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

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

PMI is short for for Private Mortgage Insurance. This added policy takes care of the lender in case a borrower doesn't pay on the loan and the value of the house is less than the loan balance. 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 savings from getting rid of the PMI required when you got your mortgage will make up for the cost of the appraisal in no time. Nobody is more qualified than RSJ Appraisals when it comes to analyzing real estate appreciation in Milwaukee and Milwaukee County. Contact us today.

Should I do anything in advance of the appraisal inspection (Back to top)

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 we have easy access to the exterior of the house . Trim any bushes and relocate any items that would make it difficult to measure the structure. On the inside, make sure we can get to appliances like furnaces and water heaters.

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

A survey or plot map of the property and building (if readily available).
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.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
Brag sheet that lists major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
A list of "suggested" improvements when the property is being appraised "as complete".

How does an appraiser define "Market Value"? (Back 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."

Once complete, who actually owns the appraisal report? (Back to top)

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 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.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these scenarios, the appraiser may define 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.

How can I get the most ROI out of home improvements? (Back to top)

This really depends on where the home is. 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

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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, yielding 85%. On the contrary, work that may not increase your value would be painting just for the sake of redecorating.