We have answers to your questions regarding frequently ask questions regarding the              appraisal process

KRANTZ COMPANIES, LLC is always happy to handle any concerns you might have about appraisals in Lake Ozark and Miller County. Don't hesitate to contact us today.

Define the term "Appraisal"
What does an appraiser do?
What would cause me to require a real estate appraisal?
How is an appraiser different than a home inspector?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Upon completion of the report, how can I have certainty that the value conclusion is legitimate?
What goes into an appraiser's certification?
Who do appraisers work for?
Where does an appraiser get the information used to estimate values in Miller County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What does "Market Value" mean?
Once complete, who actually owns the appraisal report?
Which home renovations add the most to the price?



Define the term "Appraisal"   (Go to list of  questions)

The procedure of creating an appraisal deals with an investigation which forms an opinion of value. This opinion or estimate is found using a formal process that generally uses three "common approaches to value". One of the methods is the Cost Approach - which is what it would cost to replace the improvements, minus physical deterioration and other factors, plus the land value. Easily the most common approach in finding the likely sales price of a home is the Sales Comparison Approach which deals with making a comparison to similar houses close by. Being the most popular approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a home. One of the least common approaches in appraising residential properties is the Income Approach, which is generally used to figure the market value of a property based on what an investor would pay based on the capital produced by the building.

What does an appraiser do?   (Go to list of  questions)

An appraiser forumlates a fair and credible opinion of market value, often in the context of a real estate sale. Appraisers exhibit their investigation in appraisal reports.


What would cause me to require a real estate appraisal?   (Go to list of  questions)

There are many reasons to obtain an appraisal with the most common reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal report include:
  • To obtain a loan.
  • If you would like to lower your property tax burden.
  • To demonstrate a homeowner's acquired equity and remove PMI.
  • To fight improperly assessed property taxes.
  • To handle an estate.
  • To offer you a leg-up when purchasing a home.
  • To determine a likely price when selling your home.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS require an appraisal on every home.
  • If you are ever involved in a lawsuit.
For a more extensive explanation of the appraisal process click here.


How is an appraiser different than a home inspector?   (Go to list of  questions)

Appraisers do not do complete residential property inspections and are not home inspectors. An inspection is a third-party evaluation of the livable structure and systems of a property, from the roof to the foundation. Generally, a home inspection report will evaluate the amenities and the requirements of the home: 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, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

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

Honestly, they share nothing in common. What the CMA relies upon are vague trends. An appraisal utilizes comparable sales that can be verified by public record. Also, the appraisal looks at other factors like condition, neighborhood and replacement prices. A CMA delivers a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the biggest difference is the person doing 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, state licensed professional who bases their livelihood on valuing properties in and around Miller County creates 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 previously agreed upon fee for assignments, regardless of their value conclusion.

What are the contents of an appraisal report?   (Go to list of  questions)

Each report should reflect a credible value opinion and must clearly state the following:
  • The client and whose purposes the appraisal is to serve.
  • 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 appraisal.
  • Pertinent property attributes, including: location, physical attributes, legal attributes, economic factors, the real property interest in question, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations 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 comprehensive look at all that goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the report, how can I have certainty that the value conclusion is legitimate?   (Go to 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 utilized in the appraisal was appropriate.

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

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

  • The final appraisal report was easy to explain, sound and not easily discredited.
To become a state licensed appraiser, we must satisfy considerable education and experience requirements that prepare us to formulate an unbiased opinion. Likewise, appraisers must obey a strict industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for developing an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Go to list of  questions) Regulations regarding licensing and certification are different from state to state. In general, licensing and certification is commonly associated with many hours of classroom study, tests and experience working under a supervisor. Once licensed, he/she is required to engage in continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who do appraisers work for?   (Go to list of  questions)

Most of the time, appraisers are hired by lenders to estimate the value of real estate involved in a loan transaction. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

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

Collecting data is one of the main tasks an appraiser engages in. Data can be described as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is received from a many places. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. To verify actual sales prices, we use items in the assessor's office and other public documents that are usually online nowadays. Appraisers often need to report when a property lies in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

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

What can a full appraisal do for me?   (Go to list of  questions)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. For those selling a home, you'll want to determine a price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. When buying, you can avoid overpaying by getting an independent appraisal. For people settling an estate or divorce, an appraisal from KRANTZ COMPANIES, LLC is the best documentation to ensure assets are split up evenly. Simply put, a home is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.

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

PMI is the common abbreviation for for Private Mortgage Insurance. This additional plan guards 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.

Does your monthly loan payment include a fee for PMI?Call KRANTZ COMPANIES, LLC today at 573-216-2297 or send us an e-mail. A new appraisal could save you thousands.

How do I get ready for the appraiser?   (Go to list of  questions)

We begin with an inspection of the property. 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 (gates aren't locked, etc). Trim any shrubs and move any items that would get in our way while we measure the structure. Indoors, make sure the appraiser can easily access appliances like furnaces and water heaters.

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.
  • Title policy that describes encroachments or easements.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
  • A list of any major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.

What does "Market Value" mean?   (Go to list of  questions)

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?   (Go to list of  questions)

For mortgage transactions, the lender requests 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 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.

This rule doesn't apply when a home owner engages an appraiser directly. In these cases, the appraiser may state the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.

Which home renovations add the most to the price?   (Go to list of  questions)

Like all things real estate, this is dependent on a home's location. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.

As a rule, the most value returned from renovating a home comes in the kitchen. 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 were second, returning 85%. Adding bedrooms and baths can also increase the value of your home (when done well) as long as your home doesn't then become an oddball for your neighborhood in terms of size.