Gutwein Appraisal Services, Inc has answers to "Frequently Asked Questions"

Gutwein Appraisal Services, Inc is willing to reply to any concerns you might have about appraisals or real estate in Scotts Bluff County. Feel free to contact us today.

Describe an appraisal
Describe what an appraiser does
What would cause me to require 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 can I expect to see in my appraisal report?
Upon completion of the appraisal, what assurance is there that the value conclusion is legitimate?
What does it mean for an appraiser to be licensed?
Who engages the services of appraisers?
Where does an appraiser get the data used to estimate values in Scotts Bluff County or other areas?
What can a full appraisal do for me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What does "Market Value" mean?
Who has rights to the appraisal report?
How can I get the most ROI out of home improvements?



Describe an appraisal   (See list of FAQ's)

An appraisal is a thought process that concludes with an opinion of value. The real estate appraiser will use a few "approaches," typically three, to come to the estimation of market value. The Cost Approach is one of the approaches that real estate appraisers use to find the value of a property; it involves concluding what the improvements would cost less physical degradation, adding the land value. Another of the processes is the Sales Comparison Approach - which concerns discovering a comparison to other similar nearby properties which have recently sold. Usually, the Sales Comparison Approach is the most accurate indicator of market value of a house. The Income Approach is generally 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 provides a fair and credible determination of market value, to be used in making real estate transactions. Appraisers summarize their expert investigation in appraisal reports.


What would cause me to require your services?   (See list of FAQ's)

There are a lot of reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. Some other reasons for purchasing an report include:
  • To get a loan.
  • To lower your tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove Primary Mortgage Insurance.
  • To contest improperly assessed property taxes.
  • To deal with an estate.
  • To offer you a negotiating tool when purchasing real estate.
  • To find an honest price when putting your home on the market.
  • 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.
Click here for a more detailed explanation of the process of getting an appraisal.


Is an appraisal the same as a home inspection?   (See list of FAQ's)

The appraiser is not a home inspector and he or she does not do a complete home inspection. The point of a home inspection is to evaluate the structure of the home from foundation to rooftop. Generally, a home inspection report will discuss the amenities and the necessities of the home: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural capacity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

What is the difference between an appraisal and a comparative market analysis (CMA)?   (See list of FAQ's)

To be blunt, it's like comparing broadband and dial-up. What the CMA depends on are ill-defined trends. Appraisals use similar sales which are verifiable resources. The appraisal report will also include neighborhood and construction costs. All a CMA does is generate a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

Who's behind the report is frankly the biggest 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. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. Likewise, the agent has something at stake since they get a commission based on the property's selling price - their commission - whereas the appraiser is bound by a code of ethics to collect only a previously agreed upon sum for assignments, regardless of their value conclusion.

What can I expect to see in my appraisal report?   (See list of FAQ's)

Every report must reflect a credible value opinion and should document the following:
  • The client 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 the value reported.
  • The effective date of the value opinion.(Sometimes this is in the past or maybe the future for new construction!)
  • Pertinent property characteristics, including: location, physical attributes, legal attributes, economic factors, the property rights valued, and non-real estate items included in the valuation, such as personal property, trade fixtures and even intangible considerations.
  • 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 while working up the assignment.
For a more comprehensive view of the work that goes into an appraisal report click here: Sample Appraisal Report

Upon completion of the appraisal, what assurance is there that the value conclusion is legitimate?   (See list of FAQ's)

In the documentation of an appraisal, each appraiser must ensure the following:
  • The appraisal contained an apropos analysis of the information.

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

  • That appraisal services were not rendered in a careless or negligent manner.

  • The final appraisal report was easy to explain, sound and conclusive.
To become a state licensed appraiser, there are extensive education requirements as well as on the jobexperience that must be attained - all with the objective of gaining the skills required to render unbiased value opinions. Likewise, appraisers must follow a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The guidelines for working up an appraisal and reporting 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 of Real Estate Appraisers are different from state to state. However, licensing and certification typically translates to many hours of coursework, tests and experience working under a supervisor. Once licensed, he or she must then take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who engages the services of appraisers?   (See list of FAQ's)

Mortgage lenders are an appraiser's typical customer, requesting their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does an appraiser get the data used to estimate values in Scotts Bluff County or other areas?   (See list of FAQ's)

One of the primary things an appraiser does 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 documented by the appraiser during an inspection.

General data is received from a number of sources. To find out about recently sold homes to be used as "comps", an appraiser will often use the local Multiple Listing Service. To verify actual sales prices, we research tax records and other public documents that are usually online nowadays. Appraisers routinely have to report when a property is in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

And most importantly, the appraiser assimilates general data from his or her collective knowledge gained from doing assignments for other houses in the same market.

What can a full appraisal do for me?   (See list of FAQ's)

If you're involved in some sort of financial decision and the value of your home is relevant, you'll want an appraisal. For those selling a home, you'll want to figure out the 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. For people settling an estate or divorce, an appraisal from Gutwein Appraisal Services, Inc is the best documentation to ensure assets are divided evenly. A house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making informed financial decisions.

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

PMI is the common abbreviation for for Private Mortgage Insurance. PMI covers the lender if a borrower is unable to pay on the loan and the market price of the property 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.

Has your real estate appreciated since you first purchased? Contact Gutwein Appraisal Services, Inc today at (308)632-4074 to see if you can save money by removing your Private Mortgage Insurance premium.

How do I get ready for the appraiser?   (See list of FAQ's)

We start with an inspection of the property. 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 features. On the home's interior, make sure it is clutter free and that we can access things like furnaces and water heaters. On the outside, trim any bushes so we can be free to get an accurate measurement of exterior walls.

You can make our visit go faster and improve the quality of the appraisal report by having the following things on hand:
  • Any records on the purchase of the property for the last three years.
  • List of personal property to be sold with the home.
  • Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .
  • A copy of the current listing agreement and broker's data sheet and Purchase Agreement if a sale is "pending".
  • A list of "proposed" improvements if the property is to be appraised "as complete".

What does "Market Value" mean?   (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."

Who has rights to the appraisal report?   (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 hiring the appraiser for things outside securing a mortgage. In these cases, the appraiser may define 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.

How can I get the most ROI out of home improvements?   (See list of FAQ's)

This really depends on where the home is. For example, adding a central air conditioner in to a home in the South may add significant value, while putting one in a home near the Pacific Northwest might not have much impact.

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 are right up there with kitchens, returning 85%. On the contrary, work that may not add value would be painting just for the sake of redecorating.