Michael Aytes has answers to "Frequently Asked Questions"


	Michael Aytes is ready to answer any questions you might have about appraisals or real estate in Villa Hills and Kenton County. Don't hesitate to contact us today.

Define the term "Appraisal"
What does an appraiser do?
Why would I request your services?
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?
After completing the report, how can I have assurance that the final number is accurate?
What are the requirements to be a certified appraiser?
Who are an appraiser's customers?
Where does Michael Aytes get the information used to estimate values in Kenton County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
Does the appraiser 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)

An appraisal is a thought process leading to an opinion of value. The real estate appraiser will use a few "approaches," typically three, to draw up the estimation of market value. One of the processes in use is the Cost Approach, which is what it would cost to replace the improvements to the property, less the age and physical dilapidation, adding the land value. Easily the most common approach in figuring the value of a house is the Sales Comparison Approach which concerns concluding a comparison to similar houses nearby. The Sales Comparison Approach is normally the most accurate and clearest indicator of value for a residence. The Income Approach is mainly used for figuring out the market value of income-producing properties based on what an investor would pay based on the amount of income a property would bring in.

What does an appraiser do? (Back to top)

An appraiser forumlates a fair and credible assessment of market value, in the support of real estate exchanges. Appraisers exhibit their expert findings in appraisal reports.

Why would I request your services? (Back to top)

There are many reasons to order an appraisal from Michael Aytes with the most common reason being real estate and mortgage transactions. Other reasons for getting an appraisal report include:

If you are applying for a loan.
If you would like to reduce your property tax obligations.
To demonstrate a homeowner's acquired equity and remove Primary Mortgage Insurance.
To fight high property taxes.
To settle an estate.
To offer you a negotiating tool when purchasing a home.
To find a likely sales price when selling real estate.
To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
Because an official agency such as the IRS requires it.
If you ever find yourself in a civil case.

For a more extensive description of the appraisal process click here.

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

The appraiser is not a home inspector nor does he/she do a comprehensive home inspection. The point of a home inspection is to investigate the structure of the property from foundation to top. The usual property inspector's report will include an evaluation of the integrity of the home's heating system, central air conditioning system (temperature permitting), interior plumbing and electrical systems, the roof, attic, and accessible 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 put, it's like comparing broadband and dial-up. The CMA relies on vague market trends. The appraisal depends on similar proven comparable sales. Area and building prices are also precedent in an appraisal. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

But the most significant factor is who's creating the report. A CMA is created by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. A certified, state licensed professional who made their livelihood on valuing homes in and around Kenton County creates the appraisal. Moreover, the appraiser is an unbiased party, with no conditional interest in the value conclusion, unlike the agent, who gets a commission based upon the price of the home.

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

Each report should indicate a believable value opinion and should identify the following:

Who engaged the appraiser and other intended users.
The intended use of the report.
The purpose of the appraisal.
Precisely what "value" attribute is being reported and what that value means.
The effective date of the value opinion.
Relevant property attributes, including: location, physical characteristics, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible factors.
All 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.
What was entailed in the activity of completing the job.

For a more in depth look at what goes into an appraisal report click here: Sample Appraisal Report

After completing the report, how can I have assurance that the final number is accurate? (Back to top)

In communicating an appraisal report, each appraiser must see to it that each of the items below are covered:

The appraisal used an appropriate analysis of the data.

Whether individually or collectively, there were no grave 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 understandable, legitimate and not easily discredited.

To become a state licensed appraiser, there are education requirements as well as on the jobexperience that must be attained - all with the objective of gaining the skills required to provide unbiased value opinions. In addition, appraisers must follow a strict industry code of ethics and observe national standards of practice for real estate appraisal. The tenets for developing an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).

(Back to top) Licensing and certification takes coursework, tests and practical experience. Once an appraiser is licensed, he or she must then take continuing education courses so the license remains up to date. To see the specific requirements for any state click here.

Who are an appraiser's customers? (Back to top)

Most of the time, appraisers are called upon by lenders to estimate the value of property involved in a loan transaction. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does Michael Aytes get the information used to estimate values in Kenton County or other areas? (Back to top)

Collecting information is one of the primary activities of an appraiser. Data can be categorized as either Specific or General. Specific data is collected from the home itself; Location, condition, amenities, size and other specifics are noted by the appraiser while on site.

General data is collected from a numerous places. Local Multiple Listing Services (MLS) provide information on recently sold homes that might be used as comparables. Tax records and other courthouse documents reveal actual sales prices in a market. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood servers.

And most importantly, the appraiser assembles general data from his or her past experience in doing assignments for other houses in the same market.

What can a full appraisal do for me? (Back to top)

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. When buying, be sure you're not overpaying by getting an independent appraisal. 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. Knowing its true value means you can make the right financial decisions.

What exactly is PMI and how can I get rid of it? (Back to top)

PMI is short for for Private Mortgage Insurance. It protects the lender in the event a borrower defaults on the loan and the value of the home is lower than the balance of the loan. Once you reach the point where your home's equity plus the amount you've paid is at least 20% of your loan balance, you can have your PMI dropped.


	The savings from getting rid of the PMI required when you got your mortgage will make up for the cost of the appraisal in a matter of months. Michael Aytes stays current with real estate value trends in Villa Hills and Kenton County. Contact us today.

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

We start with an inspection of the home. 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 amenities. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house . Trim any shrubs and relocate any items that would make it difficult to measure the structure. On the inside, make sure we can get to items like furnaces and water heaters.

To help speed things along as well as ensure a more accurate report, try if possible to have the following items:

Any records on the purchase of the property for the last three years.
Any paperwork, such as a title policy with information on encroachments or easements encroachments or easements.
Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
Locate copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.
A list of "proposed" improvements if the property is to be appraised "as complete".

How does an appraiser define "Market Value"? (Back to top)

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."

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

In most real estate transactions, the appraisal is ordered by the lender. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is entitled to a copy of the appraisal - it's usually included with all the other closing documents - but is not entitled 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 define 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.

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

A home's location - what city it is in and even what part of that city - is key to this popular question. 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. 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 weren't far behind, returning 85%. On the contrary, an improvement that may not add value would be painting just for the sake of redecorating.