Bowers Appraisal Service, LLP has answers to "Frequently Asked Questions"

Bowers Appraisal Service, LLP is always willing to talk to you about any questions you might have about appraisals or real estate in Washington County. Contact Bowers Appraisal Service, LLP today to see how we can help solve your valuation problems.

Define the term "Appraisal"
Describe what an appraiser does
What would cause me to request your services?
Is an appraisal the same as a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What can I expect to see in my appraisal report?
Upon completion of the report, how can I have assurance that the value conclusion is accurate?
How are appraisers certified?
Who employs appraisers?
Where does Bowers Appraisal Service, LLP get the data used to estimate values in Washington County or other areas?
What can a full appraisal do for 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 inspection
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?



Define the term "Appraisal"   (List of questions)

The appraisal process is an estimation that produces an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or estimate. The Cost Approach is one of the methods that real estate appraisers use to find value; it involves concluding what the improvements would cost less physical depreciation, adding the land value. Easily the most common approach in figuring the value of a house is the Sales Comparison Approach which involves figuring a comparison to similar homes nearby. Usually, the Sales Comparison Approach is the most definite indicator of market value of a house. The Income Approach is mainly 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.

Describe what an appraiser does   (List of questions)

An appraiser produces an impartial and well substantiated opinion of market value, in the support of real property exchanges. Appraisers exhibit their professional conclusions in appraisal reports.


What would cause me to request your services?   (List of questions)

There are many reasons to get an appraisal from Bowers Appraisal Service, LLP with the usual reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal report include:
  • If you are applying for a loan.
  • If you would like to lower your property tax burden.
  • To demonstrate a homeowner's acquired equity and remove insurance.
  • To fight improperly assessed property taxes.
  • To deal with an estate.
  • To give you a leg-up when purchasing a home.
  • To figure out a reasonable property value 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 need an appraisal on every house.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.
If you need more information regarding the appraisal process, please click here.


Is an appraisal the same as a home inspection?   (List of questions)

Home inspectors do not produce an opinion of value and do not use the same forms as appraisers. The purpose of a home inspection is to investigate the structure of the house from bottom to rooftop. The standard house inspector's report will contain an evaluation of the condition of the property'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.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (List of questions)

Honestly, they have nothing in common. The CMA utilizes market trends to create most of their business. An appraisal is based on comparable sales that can be validated by records. Area and construction prices are also a priority in an appraisal. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

Who's creating the report is actually the biggest difference between a CMA and an appraisal. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, Maryland licensed professional who made a career on valuing real estate in and around Washington County creates the appraisal. Likewise, the agent has something at stake since they get a commission based on the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat sum for work they perform, regardless of their value conclusion.

What can I expect to see in my appraisal report?   (List of questions)

Each report should indicate a supported value opinion and should identify the following:
  • Who engaged the appraiser 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 value opinion.
  • Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible factors.
  • 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.
  • The scope of work considered when completing the job.
For a more detailed view of the work that goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the report, how can I have assurance that the value conclusion is accurate?   (List of questions)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
  • The appraisal used an appropriate analysis of the data.

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

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

  • The final appraisal report was clear, legitimate and conclusive.
There are intense classroom and on the job experience requirements that must be adhered to in order to achieve the designation of "licensed appraiser" in Maryland. In addition, appraisers must follow a strict industry code of ethics and observe national standards of practice for real estate appraisal. The guidelines for developing an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (List of questions) Regulations regarding licensing and certification of Real Estate Appraisers vary from state to state. In general, licensing and certification is commonly associated with many hours of coursework, tests and experience working under a supervisory appraiser. Once an appraiser is licensed, he/she is required to complete continuing education courses so the license remains current. To see the specific requirements for any state click here.

Who employs appraisers?   (List of questions)

Mortgage lenders are an appraiser's most likely client, requiring their services to ensure a home 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 Bowers Appraisal Service, LLP get the data used to estimate values in Washington County or other areas?   (List of questions)

One of the main activities of an appraiser is to collect data. Data can be split into Specific or General. Specific data is taken from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.

General data is gathered from a many places. To research recent sales to be used as "comps", we often use the local Multiple Listing Service. To verify actual sales prices, we use tax records and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood product.

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

What can a full appraisal do for me?   (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 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, you can avoid overpaying by getting an independent appraisal. For people settling an estate or divorce, an appraisal from Bowers Appraisal Service, LLP is the best way to ensure assets are divided properly. A home is often the single, largest financial asset anybody owns. Knowing its true value means you can make informed financial decisions.

My mortgage statement has an item on it for PMI? Can I get rid of that?   (List of questions)

PMI is the common abbreviation for for Private Mortgage Insurance. This supplementary policy protects the lender if a borrower doesn't pay on the loan and the market price of the home is less than the balance of the loan. 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.

The savings from dropping the PMI required when you got your mortgage pays for the appraisal in no time. Bowers Appraisal Service, LLP has years of experience with value trends in Hagerstown and Washington County. Contact us today.

Should I do anything in advance of the appraisal inspection   (List of questions)

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. Inside, make sure it is clutter free and that 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 the inspection go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • Written property agreements, such as a maintenance easement for a shared driveway.
  • Title policy that describes encroachments or easements.
  • Any "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
  • A list of any major home improvements and upgrades, 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).
  • A list of "suggested" improvements when the property is being appraised "as complete".

What does "Market Value" mean?   (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."

Does the appraisal belong to the bank or the consumer?   (List of questions)

For mortgage transactions, the lender requests the appraisal, either directly or through a third party. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is certainly 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.

It's different when it's the homeowner engaging the appraiser for things outside securing a mortgage. In these scenarios, the appraiser may define the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stated otherwise, the home owner can use the appraisal for any purpose.

Are some home improvements more worthwhile than others?   (List of questions)

The added value of a particular amenity truly depends on the local market. For example, putting in 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. 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 are right up there with kitchens, 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.