E.R.S. Real Estate Group, LLC has answers to "Frequently Asked Questions"


	E.R.S. Real Estate Group, LLC is always ready to answer any questions you might have about appraisals in Kings County. Feel free to contact us today.

Define the term "Appraisal"
What does an appraiser do?
What would cause me to require services from E.R.S. Real Estate Group, LLC?
How is an appraiser different than a home inspector?
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 certainty that the value conclusion is valid?
What does it mean for an appraiser to be licensed?
Who employs appraisers?
Where does E.R.S. Real Estate Group, LLC get the data used to estimate values in Kings County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
Do you need anything from me in advance?
How does an appraiser define "Market Value"?
Who has rights to the appraisal report?
I want to get more for my house. Where should I spend money renovating?

Define the term "Appraisal" (Back to top)

The appraisal process is an evaluation that generates an opinion of value. The real estate appraiser will use a several "approaches," typically three, to arrive at the estimation of market value. One of the methods in use is the Cost Approach, which finds what it would cost to restore the improvements to the property, less the depreciation and physical deterioration, adding the land value. The Sales Comparison Approach involves searching for similar homes in close proximity and figuring out the value based on making a comparison of those prior sales to the house in question. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a residential property. The third approach is the Income Approach, which is the most important method in appraising income producing properties - it deals with estimating what an investor would pay based on the money generated by the property.

What does an appraiser do? (Back to top)

An appraiser produces a professional, unbiased opinion of market value, to be used in making real estate transactions. Appraisers show their professional findings in appraisal reports.

What would cause me to require services from E.R.S. Real Estate Group, LLC? (Back to top)

There are a lot of reasons to order an appraisal from E.R.S. Real Estate Group, LLC with the most common reason being real estate and mortgage transactions. Other reasons for getting an report include:

If you are applying for a loan.
If you would like to reduce your property tax burden.
To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
To fight improperly assessed property taxes.
If you need to settle an estate.
To offer you a leg-up when purchasing a home.
To determine a reasonable sales price when selling your home.
To defend 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 home.
If you are ever involved in a civil case.

If you need more information about the appraisal process, please click here.

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

Home inspectors do not come to an opinion of value and do not do appraisal reports. An inspection is a third-party evaluation of the livable structure and appliances of a house, from the top to the bottom. The standard home inspector's report will include an evaluation of the condition of the property's heating systems, 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)? (Back to top)

Simply, they share nothing in common. The CMA uses market trends to generate most of their business. An appraisal utilizes comparable sales that can be proven by public record. Also, the appraisal verifies other factors like condition, neighborhood and construction prices. 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.

The credentials of the person behind the report is actually the biggest difference between a CMA and an appraisal. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, generate CMA's. A certified, New York licensed professional who made their livelihood on valuing real estate in and around Kings County is behind the appraisal. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to accept a previously agreed upon fee for work they perform, regardless of their outcome.

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

Each report must indicate a believable value opinion and will document the following:

Who engaged the appraiser and other intended users.
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 appraiser's opinions and conclusions.
Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible considerations.
All 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.
What was entailed in the activity of completing 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 certainty that the value conclusion is valid? (Back to top)

In communicating an appraisal report, each appraiser must ensure the following:

That the information analysis utilized in the appraisal was appropriate.

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

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

That a solid, defensible appraisal report was imparted.

To become a state licensed appraiser, there are extensive education requirements as well as on the jobexperience that must be logged - all with the end goal of being able to provide unbiased value opinions. Likewise, appraisers must stick to a meticulous industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for working up an appraisal and documenting 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 commonly associated with many hours of coursework, tests and practical experience. Once 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 employs appraisers? (Back to top)

Mortgage lenders are an appraiser's most likely customer, needing their services to ensure real estate involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does E.R.S. Real Estate Group, LLC get the data used to estimate values in Kings County or other areas? (Back to top)

One of the primary activities of an appraiser is to collect property data. 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 while on site.

General data is collected from a many places. Local Multiple Listing Services (MLS) have information on recently sold homes that might be used as comparables. To double-check actual sales prices, we research tax records and other public documents. Appraisers routinely 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 service.

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

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

An appraisal is a worthwhile anytime your home's value is relevant to some financial decision. For those selling a home, you'll want to figure out 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. If you're buying, it makes sure you don't overpay. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. 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? (Back to top)

PMI is short for for Private Mortgage Insurance. It guards the lender if a borrower doesn't pay on the loan and the value of the property 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 amount you keep from dropping your PMI pays for the appraisal in a matter of months. E.R.S. Real Estate Group, LLC has years of experience with value trends in Brooklyn and Kings County. Contact us today.

Do you need anything from me in advance? (Back to top)

We start with an inspection of the property. 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 condition of its amenities. 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 shrubs and move 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 the inspection go faster and improve the quality of the appraisal report by having the following things on hand:

A plot plan or survey of the house and land (if available).
Title policy that describes encroachments or easements.
Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and your well.
Locate copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.
Most recent real estate tax bill and or legal description of the property.

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."

Who has rights to the appraisal report? (Back to top)

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 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.

The exception to this rule is when a home owner hires an appraiser directly. 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 stipulated otherwise, the home owner can do whatever they want with the appraisal.

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

The added value of a particular amenity truly depends on the local market. 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 best ROI 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 are right up there with kitchens, yielding 85%. On the contrary, something that may not increase your value would be painting just for the sake of redecorating.