Oltmanns Appraisal Service, Inc. has answers to "Frequently Asked Questions"

Oltmanns Appraisal Service, Inc. is always more than happy to answer any questions you might have about appraisals or real estate in Summit County. Don't hesitate to contact us today.

Define the term "Appraisal"
What does an appraiser do?
Why would a person request a real estate appraisal?
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?
Once the assignment is done, what guarantee is there that the value indicated is valid?
How are appraisers certified?
Who are an appraiser's customers?
Where does Oltmanns Appraisal Service, Inc. get the data used to estimate values in Summit 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?
What does "Market Value" mean?
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)

The appraisal process is an evaluation that leads to an opinion of value. There are three "common approaches to value" which assists the appraiser come to this opinion or valuation. One of the methods in use is the Cost Approach, which finds what it would cost to replace the improvements to the property, less the age and physical deterioration, plus the land value. Easily the most common approach in figuring the value of a house is the Sales Comparison Approach which deals with figuring a comparison to comparable properties close by. The Sales Comparison Approach is commonly the most accurate and best indicator of value for a residence. One of the least common approaches in appraising homes is the Income Approach, which is mainly used to determine the value of a property based on what an investor would pay based on the capital produced by the property.

What does an appraiser do?   (Back to top)

An appraiser offers an unprejudiced and well substantiated opinion of market value, often in the context of a real estate exchange. Appraisers document their expert analysis in appraisal reports.


Why would a person request a real estate appraisal?   (Back to top)

There are many reasons to obtain an appraisal with the usual reason being real estate and mortgage transactions. A few other reasons for obtaining an appraisal include:
  • To receive a loan.
  • To reduce your tax burden.
  • To help a homeowner realize if they owe less than 80% of their home's value and remove PMI.
  • To fight improperly assessed property taxes.
  • To deal with an estate.
  • To give you a negotiating tool when purchasing a home.
  • To figure out a reasonable sales price when selling your home.
  • To defend your rights if your property is being taken by means of eminent domain in a condemnation case.
  • Government agencies such as the IRS require an appraisal on every house.
  • If you are ever involved in a civil case.
If you need more information regarding the appraisal process, please click here.


Is an appraisal the same as a home inspection?   (Back to top)

Home inspectors do not generate an opinion of value and do not do appraisal reports. A third-party home inspector will investigate the structure of the property, from the roof to the bottom. The general home 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 visible 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, they have nothing in common. The CMA depends on vague local market trends. An appraisal relies on comparable sales that can be proven by records. Location and architectural prices are also a priority in an appraisal. A CMA delivers a "ball park figure." An appraisal delivers a defensible and carefully documented opinion of value.

The person creating the report is actually the biggest difference between a CMA and an appraisal. Real estate agents write CMA's, and they don't always know the whole market or have specific competence when it comes to home valuation. A certified, Ohio licensed professional who has formed their livelihood on valuing properties in and around Summit County creates the appraisal. Moreover, the appraiser is an independent voice, with no conditional interest in the value conclusion, unlike the agent, whose income is tied to the value of the home.

What can I expect to see in my appraisal report?   (Back to top)

The main purpose of an appraisal document is to let the reader know the value of the real estate in question, and depending on the scope of the report, one will customarily see the following:
  • The client and whose purposes the appraisal is to serve.
  • The intended use of the appraisal.
  • The appraisal's purpose.
  • Precisely what "value" attribute is being reported and what that value means.
  • 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 description, legal attributes, economic attributes, the property rights valued, and non-real estate items included in the valuation, 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.
  • What was entailed in the process of completing the assignment.
For a more in depth look at what goes into an appraisal report click here: Sample Appraisal Report


Once the assignment is done, what guarantee is there that the value indicated is valid?   (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 apropos analysis of the data.

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

  • That appraisal services were delivered in a careful and judicious fashion.

  • That a trustworthy, supportable appraisal report was communicated.
To become a state licensed appraiser, we must meet considerable education and experience requirements that prepare us to produce an unbiased opinion. Plus, appraisers must follow a strict industry code of ethics and observe national standards of practice for real estate appraisal. The rules for working up an appraisal and communicating its results are insured 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/she is required to take continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

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

Commonly, appraisers are employed by lenders to estimate the value of real estate involved in a loan transaction. Attorneys and CPAs also hire appraisers for asset division and estate settlements.

Where does Oltmanns Appraisal Service, Inc. get the data used to estimate values in Summit County or other areas?   (Back to top)

Collecting information is one of the primary things an appraiser does. Data can be described as either Specific or General. Specific data is from the property itself; Location, condition, amenities, size and other specific data are noted by the appraiser while on site.

General data is gathered from a number of sources. Local Multiple Listing Services (MLS) provide information on recently sold homes that could be used as comparables. To verify actual sales prices, we use items in the assessor's office and other public documents that are usually online nowadays. Appraisers often need to report when a property lies in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

And most importantly, the appraiser assembles general data from his or her past experience in creating appraisals for other properties in the same market.


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

If you're making some sort of financial decision and the value of your home is relevant, you'll want a full appraisal. If you're selling your home, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. If you're buying, it makes sure you don't overpay. For people settling an estate or divorce, an appraisal from Oltmanns Appraisal Service, Inc. is the best documentation to ensure assets are divided fairly. Simply put, a house is often the single, largest financial asset anybody owns. Don't make decisions in the dark with a professional appraisal.


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. This added policy covers the lender if a borrower defaults on the loan and the market price of the property is less than what the borrower still owes on the loan. You can have your PMI dropped once you've achieved 20% equity in your home through appreciation and principal payments.

The amount you keep from dropping your PMI will make up for the price of the appraisal in a matter of months. Oltmanns Appraisal Service, Inc. stays current with real estate value trends in Twinsburg and Summit County. Contact us today.

How do I get ready for the appraiser?   (Back to top)

The first step in most appraisals is the home inspection. During this process, the appraiser 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. Inside, make sure it is clutter free and that we can access things like furnaces and water heaters. On the outside, trim any landscaping so we can be free to get an accurate measurement of exterior walls.

You can make the inspection go faster and improve the accuracy of the appraisal report by having the following things on hand:
  • A plot plan or survey of the house and land (if available).
  • A list of any personal property that is part of the home and you intend to be sold with the home, such as an oven, or a washer and dryer, if applicable.
  • Any inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
  • Brag sheet that lists major home improvements and enhancements, the date of their installation and their cost (for example, the addition of Energy efficiency upgrades or roof repairs) and permit confirmation (if available).
  • A list of "suggested" improvements if the property is to be appraised "as complete".

What does "Market Value" mean?   (Back to top)

In real estate appraising, 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)

For mortgage transactions, the lender orders the appraisal, either directly or through a third party. Even though it's the buyer that eventually pays for the report, the lender is the intended user. The buyer is certainly entitled to a copy of the appraisal - it's usually bundled with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner engages an appraiser directly. In these situations, the appraiser may stipulate the purpose of the appraisal; for PMI removal, or estate planning or tax challenges, for example. If not stipulated otherwise, the home owner can do whatever they want with the appraisal.


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

The answer to this is different depending upon the location of the home. 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 increase your value would be painting just for the sake of redecorating.