Central Iowa Appraisers has answers to "Frequently Asked Questions"

Central Iowa Appraisers is eager to address any concerns you might have about appraisals in Polk County. Contact Central Iowa Appraisers today to talk about how we can help solve your specific valuation problems.

What is an appraisal?
Describe what an appraiser does
What would cause me to request services from Central Iowa Appraisers?
How is an appraisal different than a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What are the contents of an appraisal report?
Upon completion of the appraisal, how can I have assurance that the value conclusion is veritable?
What goes into an appraiser's certification?
Who engages the services of appraisers?
Where does Central Iowa Appraisers get the data used to estimate values in Polk County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
Should I do anything in advance of the appraisal appointment
How does an appraiser define "Market Value"?
Does the appraisal belong to the bank or the consumer?
How can I get the most ROI out of home improvements?



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

An appraisal is an estimation that concludes with an opinion of value. The real estate appraiser will typically use a few "approaches," typically three, to conclude the estimation of market value. One of the methods in use is the Cost Approach, which is what it would cost to restore the improvements to the house, less the depreciation and physical deterioration, plus the land value. Another of the methods is the Sales Comparison Approach - which involves discovering a comparison to other similar properties within a close vicinity which have recently sold. Being the most common approach, the Sales Comparison Approach tends to be the most accurate and best indicator of market value for a house. The Income Approach is primarily used for determining the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.

Describe what an appraiser does   (See list of FAQ's)

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


What would cause me to request services from Central Iowa Appraisers?   (See list of FAQ's)

There are a lot of reasons to get an appraisal from Central Iowa Appraisers with the usual reason being real estate and mortgage transactions. Some other reasons for purchasing an report include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax obligations.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove insurance.
  • To contest high property taxes.
  • To settle an estate.
  • To give you an edge when purchasing real estate.
  • To determine a reasonable property value when selling 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 ever find yourself in a lawsuit.
Click here for a more extensive explanation of the process involved in getting an appraisal.


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

Home inspectors do not provide an opinion of value and are not appraisers. The point of a home inspection is to evaluate the structure of the home from foundation to rooftop. The general property inspector's report will include an evaluation of the condition of the home'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.

Is an appraisal the same as a comparative market analysis(CMA)?   (See list of FAQ's)

Simply put, it's like comparing Shakespeare to reality TV. The CMA uses market trends to conduct most of their business. Appraisals use comparable sales which are valid resources. Area and construction values are also precedent in an appraisal. All a CMA does is generate a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

But the biggest difference is the person behind the report. Real estate agents, who may not have a complete understanding of valuation methods or the entire market, write CMA's. A certified, Iowa licensed professional who made a career on valuing homes in and around Polk County creates the appraisal. Likewise, the agent has a vested interest in the property's selling price - their commission - 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 are the contents of an appraisal report?   (See list of FAQ's)

Each appraisal should demonstrate a believable estimate of value and will clearly state the following:
  • The client and whose purposes the appraisal is to serve.
  • The intended use of the appraisal.
  • The appraisal's purpose.
  • The type of value reported and a definition of the value reported.
  • The effective date of the value opinion.(Sometimes this is in the past or maybe the future for new construction!)
  • Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic factors, the real property interest 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 used when completing the job.
For a more comprehensive look at what goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, how can I have assurance that the value conclusion is veritable?   (See list of FAQ's)

In communicating an appraisal report, each appraiser must make sure of the following:
  • That the information analysis utilized in the appraisal was appropriate.

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

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

  • The final appraisal report was understandable, credible and not easily discredited.
To become a state licensed appraiser, we must fulfill extensive education and experience requirements that enable us to produce an unbiased opinion. Plus, appraisers must abide by a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The rules for developing an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (See list of FAQ's) Regulations regarding licensing and certification vary from state to state. However, licensing and certification is commonly associated with many hours of classroom study, tests and practical experience. 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 engages the services of appraisers?   (See list of FAQ's)

Most of the time, appraisers are employed by mortgage lenders to estimate the value of real estate involved in a loan transaction - to make sure the house is truly adequate collateral for the loan. Attorneys and CPAs also retain the services of appraisers for divorce and estate settlements.

Where does Central Iowa Appraisers get the data used to estimate values in Polk County or other areas?   (See list of FAQ's)

One of the most important things an appraiser does is to collect property data. Data can be split into Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specific data are gathered by the appraiser during an inspection.

General data is received from a numerous sources. To find out about recently sold homes to be used as "comps", an appraiser will often go to the local Multiple Listing Service. Tax records and other public documents reveal actual sales prices in a market. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood servers.

And last but not least, the appraiser assembles 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. 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. Without knowing its real value, wise financial decisions are impossible.

What exactly is PMI and how can I get rid of it?   (See list of FAQ's)

PMI stands for Private Mortgage Insurance. PMI takes care of the lender in the event a borrower doesn't pay on the loan and the value of the house 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.

Did you have less than 20% to put down on your mortgage? Call Central Iowa Appraisers today at (515)270-0495 to see if you can get rid of your Private Mortgage Insurance payment.

Should I do anything in advance of the appraisal appointment   (See list of FAQ's)

The first step in most appraisals is the home inspection. During this process, we 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. On the home's interior, pick up any clutter and make sure we can find our way to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of exterior walls.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
  • Information on the latest purchase of the property in the last three years.
  • Written property agreements, such as a maintenance easement for a shared driveway.
  • 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, septic systems and wells.
  • Information on "Homeowners Associations" or condominium covenants and fees.

How does an appraiser define "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)

In most real estate transactions, the appraisal is ordered by the lender. 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 entitled to a copy of the appraisal - 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 engaging the appraiser for things outside securing a mortgage. In these situations, the appraiser may state the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stipulated 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)

It really depends on the market. For example, if you're in a neigborhood of small to medium priced homes, a media room may not be something people in that price range want

As a rule, the most value returned from renovating a home comes in the kitchen. 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, work that may not add value would be painting just for the sake of redecorating.