Luzier Quality Services has answers to "Frequently Asked Questions"

Luzier Quality Services is always prepared to talk to you about any inquiries you might have about appraisals or real estate in Clearfield County. Contact us today to learn how we can help you with your valuation problems.

Define the term "Appraisal"
Describe what an appraiser does
Why would someone 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 does the appraisal report contain?
Once the appraisal has been delivered, what assurance is there that the value conclusion is legitimate?
What are the requirements to be a certified appraiser?
Who do appraisers work for?
Where does Luzier Quality Services get the information used to estimate values in Clearfield County or other areas?
Why do I need a professional appraisal?
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?
Define "Market Value"
Who has rights to the appraisal report?
Which home renovations add the most to the price?



Define the term "Appraisal"   (Return to top)

The process of creating an appraisal deals with an investigation which leads to an opinion of value. This opinion or estimate is concluded by a formal process that usually uses the three main "common approaches to value". One of the methods is the Cost Approach - which is how much it would cost 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 house is the Sales Comparison Approach which involves making a comparison to comparable houses close by. Usually, the Sales Comparison Approach is the most definite indicator of market value of a house. The third approach is the Income Approach, which is the best method in appraising income producing properties - it involves estimating what an investor would pay based on the income generated by the property.

Describe what an appraiser does   (Return to top)

An appraiser offers a professional, unbiased determination of market value, in the support of real estate transactions. Appraisers present their analysis in appraisal reports.


Why would someone request your services?   (Return to top)

There are a lot of reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for obtaining an appraisal report include:
  • If you are applying for a loan.
  • If you would like to lower your property tax obligations.
  • To show a homeowner has 30% equity and remove PMI.
  • To challenge high property taxes.
  • If you need to settle an estate.
  • To offer you a leg-up when purchasing a home.
  • To find an honest property value when listing your home.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Because a government agency such as the IRS requires it.
  • If you are ever involved in a civil case.
For a more detailed description of the appraisal process click here.


Is an appraisal the same as a home inspection?   (Return to top)

The appraiser is not a home inspector and he or she does not do a full home inspection. An inspection is a third-party evaluation of the available structure and systems of a property, from the top to the bottom. The stereotypical house inspector's report will include 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)?   (Return to top)

Frankly, it's apples and oranges. The CMA uses market trends to generate most of their business. Appraisals use comparable sales which are valid resources. Location and construction prices are also a priority in an appraisal. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

Who's creating the report is hands down the most significant difference between a CMA and an appraisal. Real estate agents, who may not have a true grasp of valuation methods or the entire market, create CMA's. A certified, Pennsylvania licensed professional who bases their livelihood on valuing real estate in and around Clearfield County is behind 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 accept a previously agreed upon sum for work they perform, regardless of their value conclusion.

What does the appraisal report contain?   (Return to top)

The main objective of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • The intended use of the report.
  • The reason for the assignment.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraisal.
  • Relevant property characteristics, 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, trade fixtures 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.
  • The scope of work considered to complete the assignment.
For a more in depth view of all that goes into an appraisal report click here: Sample Appraisal Report


Once the appraisal has been delivered, what assurance is there that the value conclusion is legitimate?   (Return to top)

In communicating an appraisal report, each appraiser must make sure of the following:
  • The appraisal contained an apropos analysis of the data.

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

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

  • That a trustworthy, substantiated appraisal report was imparted.
To become a state licensed appraiser, there are 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. Plus, appraisers must stick to a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and documenting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Return to top) Licensing and certification takes coursework, tests and practical experience. Once an appraiser is licensed, he/she is required to take continuing education courses in order to keep the license current. To see the specific requirements for any state click here.

Who do appraisers work for?   (Return to top)

Commonly, appraisers are hired by mortgage lenders to estimate the value of a home involved in a loan transaction - to make sure the real estate is indeed adequate collateral for the loan. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Luzier Quality Services get the information used to estimate values in Clearfield County or other areas?   (Return to top)

One of the primary activities of an appraiser is to collect property 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 noted by the appraiser during an inspection.

General data is gathered from a numerous places. Local Multiple Listing Services (MLS) provide data on recently sold homes that could be used as comparables. Tax records and other courthouse documents reveal actual sales prices in a market. Appraisers often have to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And last but not least, the appraiser assimilates general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.


Why do I need a professional appraisal?   (Return 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 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. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. Simply put, a home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making smart financial decisions.


My mortgage statement has an item on it for PMI? Can I get rid of that?   (Return to top)

PMI is short for for Private Mortgage Insurance. This added plan covers the lender if a borrower defaults on the loan and the market price of the home is less than the balance of 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.

Has your home value appreciated since you first purchased? Call Luzier Quality Services today at 814.768.4636 to see if you can cancel your Private Mortgage Insurance payment.

Does the appraiser need anything from me in advance?   (Return to top)

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 condition of its features. On the home's interior, pick up any clutter and make sure we can find our way to things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of outside walls.

To help expedite our work as well as ensure a more accurate report, try if possible to have the following items:
  • Any information on the purchase of the property for the last three years.
  • Written property agreements, such as a maintenance agreement for a shared driveway.
  • Title policy that describes encroachments or easements.
  • A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
  • A list of "proposed" improvements when the property is being appraised "as complete".

Define "Market Value"   (Return 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?   (Return 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 included 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 hiring the appraiser for things outside securing a mortgage. In these scenarios, the appraiser may state 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.


Which home renovations add the most to the price?   (Return to top)

This really depends on where the home is. 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 weren't far behind, returning 85%. Adding bedrooms and baths can also help the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.