Frequently Asked Questions

What is the difference between an Appraisal and an Inspection?
An appraiser offers an unbiased estimate of market value based on observable conditions.  Appraisers take into consideration what is "hot" in the current market and what typical buyers are willing to pay for a certain amenity or property location.  A home inspector looks at the overall condition of the home and takes note of any repairs or replacements that are necessary.  Inspectors evaluate the physical structure, condition and mechanical systems of the home, as well as give an estimate of the remaining useful life of the structure, mechanical systems, equipment and finishes.  Home Inspectors do not give an estimate of market value.

What is the difference between Fair Market Value (FMV) and Assessed Market Value (AMV)?
Assessed Value is "the value of a property according to the tax rolls in ad valorem taxation. It may be higher or lower than market value, or based on an assessment ratio that is a percentage of market value."¹  Fair Market Value generally exceeds Assessed Market Value.  Fair Market Value is when:

• Buyer and seller are typically motivated,
• Both parties are well-informed or well-advised, and each acting in what he/she considers his/her own best interest,
• A reasonable time is allowed for exposure in the open market,
• Payment is made in terms of cash in U.S. dollars or in terms of financial arrangements comparable thereto;
• 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.

What are the top Federal Housing Administration (FHA) repairs to look for?
This list is not all-inclusive. However, accounting for these most frequently cited repairs prior to the appraisal inspection can help reduce the need for re-inspections and additional fees.

• Have all utilities on before the appraiser arrives (i.e., water, gas, electricity, etc.).
• Make sure the furnace will turn on even on hot summer days.
• Make sure the hot water tank has a discharge pipe which extends to within six inches of the floor.
• Make sure all crawl space access doors can be found and opened. Also, make sure all attic areas can be inspected.
• Install handrails on all stairs with three or more risers.
• Make sure all gutters have downspouts and extenders that direct the water away from the house. (Most water seepage in basements and crawl spaces is caused by the lack of extenders on gutter downspouts and negative grade, which allows outside water to pond around the foundation.)
• Scrape and paint all peeling exterior and interior paint on all wood surfaces. Remove peeling paint from non-wood surfaces (i.e., concrete, aluminum, etc.) unless re-painting these surfaces is more desirable.
• Repair all broken windows.
• Repair or replace all uneven or badly cracked hazardous concrete or asphalt including public sidewalks. Use appropriate repair materials. Also, "mud jacking" uneven concrete can be less costly.
• "Tuck Point" cracks in mortar of brick or cinder block areas around porches, foundations, etc.

What is Anticipated Sales Price?
The price at which a property is anticipated to sell in a competitive and open market, assuming an arms length transaction whereby:

• The analysis reflects the subject property "as is" and is based on its present use as a residential dwelling.
• Both parties are well-informed or well-advised and acting in what they consider their best interests.
• Payment is made in cash or its equivalent. Financing, if any, is on terms generally available in the community and typical for the property type in its locale.
• A reasonable marketing period, not to exceed 120 days and commencing on the date of appraisal (inspection), is allowed for exposure in the open market. The analysis assumes an adequate effort to market the subject property.
• Forecasting is applied in making an estimate of a future happening or condition, based on an analysis of trends in the recent past, tempered with analytical judgement concerning the probable extent to which these trends will continue into the future, and reflecting an estimated impact, if any, upon the sales price.