Platinum Appraisal Group has answers to "Frequently Asked Questions"

Platinum Appraisal Group is always eager to address any concerns you might have about appraisals in San Bernardino County. Contact Platinum Appraisal Group today to learn how we can help you with your valuation problems.

What is an appraisal?
Describe what an appraiser does
What are the reasons I would need your services?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
Once the report is done, what guarantee is there that the value conclusion is valid?
What are the requirements to be a certified appraiser?
Who employs appraisers?
Where does Platinum Appraisal Group get the information used to estimate values in San Bernardino County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
How does an appraiser define "Market Value"?
Once complete, who actually owns the appraisal report?
I want to get more for my house. Where should I spend money renovating?



What is an appraisal?   (Return to top)

The process of producing an appraisal report deals with an investigation which forms an opinion of value. This opinion or estimate is concluded by a formal method that generally utilizes the three main "common approaches to value". The Cost Approach is one of the methods that appraisers use to find value; it involves figuring what the improvements would cost less physical depreciation, adding the land value. Another of the methods is the Sales Comparison Approach - which deals with discovering a comparison to other similar properties within a close proximity which have recently sold. Generally speaking, the Sales Comparison Approach is the most accurate indicator of market value of a home. The Income Approach is primarily used for determining the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.

Describe what an appraiser does   (Return to top)

An appraiser offers an objective and well justified determination of market value, often in the context of a real estate purchase. Appraisers summarize their analysis in appraisal reports.


What are the reasons I would need your services?   (Return to top)

There are a lot of reasons to purchase an appraisal from Platinum Appraisal Group with the usual reason being real estate and mortgage transactions. A few other reasons for getting an appraisal report include:
  • If you are applying for a loan.
  • To reduce your property taxes.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove Primary Mortgage Insurance.
  • To fight inflated property taxes.
  • If you need to settle an estate.
  • To provide you a negotiating tool when purchasing a home.
  • To find a reasonable price when listing your home.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS need an appraisal on every home.
  • If you ever find yourself in a lawsuit.
For a more extensive description of the appraisal process click here.


How is an appraiser different than a home inspector?   (Return to top)

Home inspectors do not figure out an opinion of value and do not do appraisal reports. A third-party home inspector will investigate the structure of the home, from the roof to the bottom. Generally, a home inspection report will explain the amenities and the requirements of the house: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, visible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

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

Simply put, it's night and day. The CMA utilizes market trends to generate most of their business. An appraisal is based on comparable sales that can be verified by public record. Also, the appraisal looks at other factors like condition, area and building costs. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

But the most significant factor is who's doing the report. Real estate agents produce CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. The appraisal is created by a licensed, certified professional who makes a living 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, whose income is tied to the price of the home.

What can I expect to see in my appraisal report?   (Return to top)

Each report should indicate a believable value opinion and must document the following:
  • The client and other intended users.
  • How the appraisal is supposed to be used.
  • The reason for the assignment.
  • The type of value contained and a definition of the value reported.
  • The effective date of the value opinion.(Sometimes this is in the past or maybe the future for new construction!)
  • Relevant property attributes, including: location, physical description, legal attributes, economic attributes, the property rights 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 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 used while working up the appraisal.
For a more comprehensive view of what goes into an appraisal report click here: Sample Appraisal Report

Once the report is done, what guarantee is there that the value conclusion is valid?   (Return to top)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:
  • The appraisal used a suitable analysis of the information.

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

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

  • The final appraisal report was transparent, credible and conclusive.
To become a state licensed appraiser, we must meet considerable education and experience requirements that train us to formulate an unbiased opinion. Plus, appraisers must follow a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The tenets for working up an appraisal and reporting 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 experience working under a supervisory appraiser. Once licensed, he or she must then engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who employs appraisers?   (Return to top)

Mortgage lenders are an appraiser's typical customer, needing their services to ensure property involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Platinum Appraisal Group get the information used to estimate values in San Bernardino County or other areas?   (Return to top)

One of the main tasks an appraiser engages in is to compile data. Data can be categorized as either Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specific data are documented by the appraiser during an inspection.

General data is received from a number of places. Local Multiple Listing Services (MLS) provide data on recently sold homes that might be used as comparables. To double-check actual sales prices, we look at tax records and other public documents that are usually online nowadays. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood system.

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.

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

An appraisal is a valuable tool anytime your home's value is pertinent to a financial decision. If you're selling your house, an appraisal will help you determine the most appropriate price. When buying, be sure you're not overpaying by getting an independent appraisal. For people settling an estate or divorce, an appraisal from Platinum Appraisal Group is the best way to ensure assets are divided properly. Simply put, a house 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. PMI takes care of the lender if a borrower doesn't pay on the loan and the market price of the house is lower than what the borrower still owes 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 Platinum Appraisal Group today at (909)717-9745 or send us an e-mail. Documentation of your home's current value could save you thousands.

How do I get ready for the appraiser?   (Return to top)

The first step in most appraisals is the property inspection. During this process, we 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. Inside, pick up any clutter and make sure we can get to things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of exterior walls.

You can make things go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • Any information on the purchase of the property for the last three years.
  • Information on any written private easements, such as a shared driveway with a neighbor.
  • Title policy that lists encroachments or easements.
  • Brag sheet that lists major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
  • Information on "Homeowners Associations" or condominium covenants and fees.

How does an appraiser 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."

Once complete, who actually owns the appraisal report?   (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 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.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these situations, the appraiser may state how the appraisal can be used; 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.

I want to get more for my house. Where should I spend money renovating?   (Return to top)

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. 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%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become overbuilt for your neighborhood in terms of size.