AMG Appraisals LLC has answers to "Frequently Asked Questions"

AMG Appraisals LLC is always more than happy to elaborate on any inquiries you might have about appraisals or real estate in Ramsey County. Don't hesitate to contact us today.

What is an appraisal?
What does an appraiser do?
What are the reasons a person would need services from AMG Appraisals LLC?
How is an appraisal different than a home inspection?
What is the difference between an appraisal and a comparative market analysis (CMA)?
What are the contents of an appraisal report?
After completing the appraisal, what assurance is there that the value indicated is veritable?
What goes into an appraiser's certification?
Who are an appraiser's customers?
Where does AMG Appraisals LLC get the information used to estimate values in Ramsey County or other areas?
Why do I need a professional appraisal?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
Define "Market Value"
Who actually owns the appraisal report?
Are some home improvements more worthwhile than others?



What is an appraisal?   (Back to top)

An appraisal is an investigation leading to an opinion of value. The real estate appraiser will use a number of "approaches," typically three, to arrive at 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 home, minus depreciation and physical deterioration, plus the land value. Another of the approaches is the Sales Comparison Approach - which deals with discovering a comparable analysis to other similar nearby properties which have recently sold. Being the most common approach, the Sales Comparison Approach is considered the most accurate and best indicator of market value for a residential property. The Income Approach is generally used for finding the market value of income-producing properties based on what an investor would pay based on the amount of income a property produce.

What does an appraiser do?   (Back to top)

An appraiser forumlates an unprejudiced and well justified determination of market value, often in the context of a real estate purchase. Appraisers present their professional analysis in appraisal reports.


What are the reasons a person would need services from AMG Appraisals LLC?   (Back to top)

There are a lot of reasons to order an appraisal from AMG Appraisals LLC with the usual reason being real estate and mortgage transactions. Some other reasons for obtaining an appraisal report include:
  • If you are applying for a loan.
  • If you would like to reduce your property tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove Primary Mortgage Insurance.
  • To fight improperly assessed property taxes.
  • If you need to take care of an estate.
  • To give you a negotiating tool when purchasing real estate.
  • To figure out the most probable property value when selling your home.
  • To protect 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 property.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.
For a more extensive description of the appraisal process click here.


How is an appraisal different than a home inspection?   (Back to top)

Home inspectors do not produce an opinion of value and do not do appraisal reports. A third-party home inspector will inspect the structure of the home, from the top to the foundation. The stereotypical home inspector's report will contain an evaluation of the condition of the house's heating systems, 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)

Frankly, it's like comparing broadband and dial-up. What the CMA relies upon are superficial trends. The appraisal is based on similar definite comparable sales. In addition, the appraisal looks at other factors like condition, location and replacement costs. 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.

But the largest differentiator is who's doing 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 bases their livelihood on valuing real estate in and around Ramsey County creates the appraisal. Further, the appraiser is an unbiased voice, with no vested interest in the value of a home, unlike the agent, who gets a commission based upon the value of the home.

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

Each report must reflect a believable estimate of value and will document the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • How the appraisal is supposed to be used.
  • The appraisal's purpose.
  • The type of value contained and a definition of that value.
  • The effective date of the appraisal.
  • Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic attributes, the real property interest valued, and non-real estate items included in the valuation, such as personal property, permanent equipment installations and even intangible items.
  • 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.
  • The scope of work considered to complete the job.
For a more comprehensive view of all that goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, what assurance is there that the value indicated is veritable?   (Back to top)

In the documentation of an appraisal, each appraiser must see to it that each of the items below are covered:
  • That the information analysis implemented in the appraisal was appropriate.

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

  • That appraisal services were provided in a careful and conscientious manner.

  • The final appraisal report was easy to explain, credible and defensible.
To become a state licensed appraiser, we must meet intense education and experience requirements that prepare us to formulate an unbiased opinion. In addition, appraisers must stick to a strict industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for working up an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Back to top) Licensing and certification takes classroom study, tests and real world experience. Once an appraiser is licensed, he or she is required to complete continuing education courses so the license stays current. To see the specific requirements for any state click here.

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

Typically, appraisers are hired by mortgage lenders to estimate the value of a house involved in a loan transaction. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does AMG Appraisals LLC get the information used to estimate values in Ramsey County or other areas?   (Back to top)

Compiling data is one of the primary functions of an appraiser. Data can be described as either Specific or General. Specific data is gathered from the property itself; Location, condition, amenities, size and other specifics are documented by the appraiser while on site.

General data is gathered from a many sources. To look up recent sales to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. To verify actual sales prices, we research items in the assessor's office and other public documents. Flood zone data is retrieved from FEMA data outlets, such as a la mode's InterFlood service.

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

Why do I need a professional appraisal?   (Back to top)

An appraisal is a valuable tool whenever the value of your home is relevant to some financial decision. For those selling a home, you'll want to figure out 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, you can avoid overpaying by commissioning an independent appraisal. For those settling an estate or divorce, an appraisal from AMG Appraisals LLC is the best way to ensure assets are split up properly. Simply put, a home is often the single, largest financial asset anybody owns. Knowing its true value means you can make smart financial decisions.

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

PMI is the common abbreviation for for Private Mortgage Insurance. It covers the lender if a borrower is unable to pay on the loan and the market price of the home is lower than the loan balance. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

Has your real estate appreciated since you first purchased? Call AMG Appraisals LLC today at 6513987599. You may be able to get rid of your Private Mortgage Insurance premium.

How do I get ready for the appraiser?   (Back 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 status of its amenities. The best thing you can do to help is make 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 get in our way while we measure the structure. On the inside, make sure the appraiser can get to items like furnaces and water heaters.

To help expedite our work plus ensure a more accurate report, attempt if possible to have the following items:
  • A plot plan or survey of the house and land (if readily available).
  • Written property agreements, such as a maintenance agreement for a shared driveway.
  • Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and wells.
  • Find copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.

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 actually owns 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 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.

This rule doesn't apply when a home owner hires an appraiser directly. 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 noted otherwise, the home owner can use the appraisal for any purpose.

Are some home improvements more worthwhile than others?   (Back to top)

Like all things real estate, this is dependent on a home's location. 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 best ROI 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 are right up there with kitchens, returning 85%. On the contrary, something that may not add value would be painting just for the sake of redecorating.