DMJ Appraisals has answers to "Frequently Asked Questions"

DMJ Appraisals is always prepared to answer any inquiries you might have about appraisals or real estate in Murrieta and Riverside County. Contact DMJ Appraisals 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 a real estate appraisal?
What is needed for divorce?
What is needed for Estate Settlement?
What is needed for a Date of Death Valuation?
How is an appraiser different than a home inspector?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What's in an appraisal report?
Upon completion of the report, what assurance is there that the final number is veritable?
What does it mean for an appraiser to be licensed?
Who employs appraisers?
Where does an appraiser get the information used to estimate values in Riverside 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?
Does the appraiser need anything from me in advance?
What is "Market Value?"
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?



Describe an appraisal (See list of FAQ's)

The process of producing an appraisal consists of an inspection which forms an opinion of value. There are three "common approaches to value" which helps the appraiser conclude this opinion or valuation. One of the methods is the Cost Approach - which is how much capital would be required to replace the improvements, less physical deterioration and other factors, plus the land value. Easily the most common approach in finding the value of a home is the Sales Comparison Approach which involves figuring a comparison to similar houses nearby. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a house. One of the least common approaches in appraising houses 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? (See list of FAQ's)

An appraiser generates a professional, unbiased determination of market value, in the support of real property exchanges. Appraisers summarize their expert analysis in appraisal reports.


What would cause me to need a real estate appraisal? (See list of FAQ's)

There are many reasons to order an appraisal from DMJ Appraisals with the most common reason being real estate and mortgage transactions. Some other reasons for getting an appraisal include:
  • If you are applying for a loan.
  • To lower 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 challenge high property taxes.
  • If you need to settle an estate.
  • To provide you an edge when purchasing real estate.
  • To figure out an honest sales price when selling your home.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because an official agency such as the IRS requires it.
  • If you are ever involved in a civil case.
For a more detailed explanation of the appraisal process click here.


Splitting up Assets (See list of FAQ's)

Finalizing a divorce involves many decisions, including who gets the house. There are generally two choices when it comes to the shared residence - it can be sold and the proceeds split, or one party can "buy out" the other. In either case, one or both parties would find it in their best interest to order an appraisal of the residence.

An appraisal for the purpose of asset division requires a well-established, expert value conclusion that will hold up in court. DMJ Appraisals guarantees an exceptional level of service with professional courtesy and well-supported conclusions. We also know how to care for the delicate needs of a divorce situation.

Contact us if you require an appraisal related to a divorce or other division of assets.


Attorneys and accountants in California rely on our appraisals when calculating what real estate is worth for estates, divorces, or other disputes needing a value opinion. We understand their needs and are accustomed to dealing with all parties involved. We assemble appraisal documents that fulfill the requirements of the courts and various agencies.

For attorneys dealing with a divorce, your case's evidence often necessitates an appraisal to ascertain market value for the residential real estate involved. Many times the divorce date may not be the same as the date you purchased the appraisal. We're accustomed to the processes and what is elementary to perform a retrospective appraisal that has an effective date and Market Value estimate corresponding to the date of divorce. For each divorce appraisal we perform, we keep in mind that they need to be handled with the utmost care. The Uniform Standards of Professional Appraisal Practice (USPAP) contains an ethics provision which binds us with confidentiality, guaranteeing you the utmost discretion.

Property Valuations for Estate Settlement by DMJ Appraisals (See list of FAQ's)

The responsibility of settling an estate, often a source of stress, is not to be taken lightly. It's up to you as an executor to carry out the wishes of the deceased as quickly and attentively as possible. You can count on us to respond quickly and with as much respect to the feelings of everyone involved.

Lawyers and accountants count on our understanding when calculating real estate values for estates, divorces, or other disputes requiring a value being placed on real property. We are sympathetic to their needs and are familiar with dealing with all parties involved. We produce appraisal reports that transcend the obligations of the courts and various groups.

Contact us today to discuss your exact estate appraisal essentials and how we can put our knowledge to work for you.


Settling an estate generally depends on an appraisal to establish market value for the home affected. It's understandable that ordering an appraisal is the farthest thought from your mind. Because of this, now and then there are times that the date of an appraisal differs from the date of your loss. DMJ Appraisals assures that our staff is comfortable with the procedures and requirements requested by revenue services to produce a retrospective appraisal with an effective date and market value estimate matching the exact date you suffered the loss of your loved one. The ethical obligations stated within the Uniform Standards of Professional Appraisal Practice (USPAP) keeps our company to confidentiality, guaranteeing the strongest degree of discretion for you.

People often forget that the IRS needs documents filed to show the numbers involved in estate sales.

An exhaustive report showing the appraiser's opinion of value is necessary to support the methods the appraiser used to come to his conclusions. In having a report supported by DMJ Appraisals's professional appraisers, you will have the knowledge that the numbers shown in the report will certainly demonstrate to the authorities that the numbers used are accurate and substantiated.

Having a professional report from DMJ Appraisals gives the executor irrefutable facts and figures to work with in going beyond IRS and California state agency requirements. It assures peace of mind to everyone concerned because we will always be there to stand behind the report if it is ever challenged.

 

Date of Death Valuations? (See list of FAQ's)


Estate tax liability. Disposition of assets under a will or in probate. There are many situations -- none of them lacking stress and complexity -- where you might need an appraisal of property that states an opinion of what the property was worth on a date some time ago, rather than when the appraisal is ordered. For estate tax purposes or disposition of the assets of a decedent, a "date of death" valuation is often required. (Sometimes, the executor of the estate may choose to have the date be six months after the date of death -- but the same principles apply.)

Attorneys, accountants, executors and others rely on DMJ Appraisals for "date of death" valuations because such appraisals require special expertise and training. They require a firm that's been in the area for some time and can effectively research comparable contemporaneous sales. 

Real property isn't like publicly traded stock or other items which don't fluctuate in value very much or for which historical public data is available. You need a professional real estate appraiser, bound by the Uniform Standards of Professional Appraisal Practice (USPAP) for a high degree of confidentiality and professionalism, and you need the kind of quality report and work product taxing authorities and courts need and expect. 

Please browse our website to learn more about our qualifications, expertise and services offered.

 

How is an appraiser different than a home inspector? (See list of FAQ's)

The appraiser is not a home inspector and does not do a complete home inspection. The point of a home inspection is to investigate the structure of the home from bottom to rooftop. 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, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.


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

(See list of FAQ's)

Simply put, it's like comparing sugar and saccharin. The CMA relies on indefinite local market trends. The appraisal relies on similar proven comparable sales. Also, the appraisal looks at other factors like condition, location and replacement costs. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

But the biggest difference is who's behind the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA's. The appraisal is produce by a licensed, certified professional who has made a career out of valuing properties. Further, the appraiser is an unbiased voice, with no vested interest in the property's value, unlike the agent, whose income is tied to the value of the home.

What's in an appraisal report? (See list of FAQ's)

Each report should indicate a credible value opinion and should clearly state the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • The intended use of the report.
  • The purpose of the appraisal.
  • The type of value contained and a definition of that value.
  • The effective date of the appraisal.
  • Pertinent property attributes, including: location, physical description, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the appraisal, such as personal property, permanent equipment installations and even intangible considerations.
  • 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 considered when completing the assignment.
For a more detailed view of the work that goes into an appraisal report click here: Sample Appraisal Report


Upon completion of the report, what assurance is there that the final number is veritable? (See list of FAQ's)

In the documentation of an appraisal, each appraiser must ensure the following:
  • The appraisal used analysis of the information.

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

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

  • The final appraisal report was clear, credible and conclusive.
To become a state licensed appraiser, there are intense education requirements as well as experience that must be attained. In addition, appraisers must abide by a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


Licensing and Certification? (See list of FAQ's)

Licensing and certification is achieved through coursework, tests and real world experience. 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 employs appraisers? (See list of FAQ's)

Typically, 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 Riverside County or other areas? (See list of FAQ's)

One of the most important tasks an appraiser engages in is to compile data. Data can be described as either Specific or General. Specific data is gathered from the home itself; Location, condition, amenities, size and other specific data are noted by the appraiser during an inspection.

General data is collected from a variety of sources. To look up recent sales to be used as "comps", we typically go to the local Multiple Listing Service. To double-check actual sales prices, we use items in the assessor's office and other public documents. Appraisers routinely need to report when a property is in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And last but not least, the appraiser gathers 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? (See list of FAQ's)

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 also ensures you don't have to wait too long for a buyer to show up; an appraisal can help with that. If you're buying, it makes sure you don't overpay. For those settling an estate or divorce, an appraisal from DMJ Appraisals is the best documentation to ensure assets are divided evenly. A home is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.


My mortgage statement has an item on it for PMI? Can I get rid of that? (See list of FAQ's)

PMI stands for Private Mortgage Insurance. It covers the lender in case a borrower doesn't pay on the loan and the market price of the property is less than the balance of the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

Is PMI a part of your monthly mortgage payment?Call DMJ Appraisals today at (951) 677-4737 or send us an e-mail. A current appraisal could save you thousands.

Does the appraiser need anything from me in advance? (See list of FAQ's)

The first step in most appraisals is the property inspection. 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 features. Is there anything you can do to help? Yes there is! First, be sure the appraiser has easy access to the exterior of the house (gates aren't locked, etc). Trim any bushes and move any items that would get in our way while we measure the structure. On the inside, make sure we can easily access items like furnaces and water heaters.

To help expedite our work as well as ensure a more accurate report, try if possible to have the following items:
  • A plot plan or survey of the house and land (if available).
  • List of personal property to be sold with the home.
  • Most recent real estate tax bill and or legal description of the property.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".

What is "Market Value?" (See list of FAQ's)

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? (See list of FAQ's)

For mortgage transactions, the lender orders 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.

This rule doesn't apply when a home owner hires an appraiser directly. In these situations, the appraiser may stipulate 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 use the appraisal for any purpose.


How can I get the most ROI out of home improvements? (See list of FAQ's)

The answer to this is different depending upon the location of the home. 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.

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 were second, yielding 85%. On the contrary, an improvement that may not increase your value would be painting just for the sake of redecorating.