JLD Evaluation, Inc. has answers to "Frequently Asked Questions"

JLD Evaluation, Inc. is prepared to answer any questions you might have about appraisals in Rocklin and Placer County. Don't hesitate to contact us today.

What is an appraisal?
What does an appraiser do?
What are the reasons someone would request services from JLD Evaluation, Inc.?
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?
Once the assignment has been completed, how can I have certainty that the value conclusion is accurate?
How are appraisers certified?
Who employs appraisers?
Where does JLD Evaluation, Inc. get the information used to estimate values in Placer County or other areas?
How can a licensed appraiser help me?
My mortgage statement has an item on it for PMI? Can I get rid of that?
How do I get ready for the appraiser?
What does "Market Value" mean?
Does the appraisal belong to the bank or the consumer?
Are some home improvements more worthwhile than others?



What is an appraisal?   (Go to list of  questions)

The procedure of producing an appraisal consists of an inspection which forms an opinion of value. There are three "common approaches to value" which helps the appraiser arrive at this opinion or estimate. One of the methods in use is the Cost Approach, which is what it would cost to restore the improvements to the property, less the age and physical deterioration, adding the land value. Another of the methods is the Sales Comparison Approach - which concerns making a comparable analysis to other similar properties within a close proximity which have recently sold. The Sales Comparison Approach is normally the most accurate and best indicator of value for a home. The Income Approach is mainly used for determining 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?   (Go to list of  questions)

An appraiser offers an impartial and well substantiated assessment of market value, to be used in making real estate transactions. Appraisers document their conclusions in appraisal reports.


What are the reasons someone would request services from JLD Evaluation, Inc.?   (Go to list of  questions)

There are a lot of reasons to get an appraisal from JLD Evaluation, Inc. with the most common reason being real estate and mortgage transactions. A few other reasons for getting an report include:
  • To get a loan.
  • To reduce your tax burden.
  • To build a case for a homeowner's equity and remove PMI.
  • To contest high property taxes.
  • To settle an estate.
  • To offer you an edge when purchasing real estate.
  • To determine the most probable property value when listing your home.
  • 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.
If you need a more detailed explanation of the appraisal process, please click here.


How is an appraisal different than a home inspection?   (Go to list of  questions)

Appraisers do not do complete home inspections and are not home inspectors. The purpose of a home inspection is to investigate the structure of the property from bottom to attic. The general home inspector's report will include an evaluation of the integrity of the home'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.

Is an appraisal the same as a comparative market analysis(CMA)?   (Go to list of  questions)

Honestly, they share nothing in common. The CMA relies on indefinite local market trends. Appraisals use comparable sales which are verifiable resources. Area and building prices are also important in an appraisal. The CMA will provide a non-specific figure. An appraisal delivers a defensible and carefully documented opinion of value.

Who's creating the report is frankly the most significant difference between a CMA and an appraisal. A CMA is written by a real estate agent who may or may not be trained in technical valuation concepts or even have a handle on market trends. The appraisal is created by a licensed, certified professional who has made a career out of valuing properties. 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 assignments, regardless of their outcome.

What are the contents of an appraisal report?   (Go to list of  questions)

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 reason for the appraisal.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the appraisal.
  • Characteristics of the property that have a bearing on the value, including: location, physical description, legal attributes, economic factors, the property rights valued, and non-real estate items included in the appraisal, such as personal property, items that are more or less permanently installed 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 activity of completing the job.
For a more detailed look at what goes into an appraisal report click here: Sample Appraisal Report


Once the assignment has been completed, how can I have certainty that the value conclusion is accurate?   (Go to list of  questions)

In the documentation of an appraisal, each appraiser must ensure the following:
  • That the information analysis contained in the appraisal was appropriate.

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

  • That appraisal services were not carried out in a careless or negligent fashion.

  • That a credible, defensible appraisal report was imparted.
To become a state licensed appraiser, we must satisfy considerable education and experience requirements that enable us to produce an unbiased opinion. In addition, appraisers must follow a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The rules for carrying out an appraisal and reporting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (Go to list of  questions) Regulations regarding licensing and certification vary from state to state. However, licensing and certification is most often associated with many hours of classroom study, tests and practical experience. Once an appraiser is licensed, he/she must then take continuing education courses in order to keep the license current. To see the specific requirements for any state click here.

Who employs appraisers?   (Go to list of  questions)

Most of the time, appraisers are employed by mortgage lenders to render a value opinion on a home involved in a loan transaction. Appraisers also provide opinions for legal settlements, tax matters and investment decisions.

Where does JLD Evaluation, Inc. get the information used to estimate values in Placer County or other areas?   (Go to list of  questions)

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

General data is received from a number of places. Local Multiple Listing Services (MLS) have data on recently sold homes that could be used as comparables. To verify actual sales prices, we research items in the assessor's office and other public documents that are usually online nowadays. Flood zone data is gathered from FEMA data outlets, such as a la mode's InterFlood system.

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.


How can a licensed appraiser help me?   (Go to list of  questions)

An appraisal is a worthwhile whenever your home's value is pertinent to some financial decision. When selling your home, an appraisal assists you in setting a price that maximizes profit and reduces time on the market. When buying, be sure you're not overpaying by commissioning an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A home is often the single, largest financial asset anybody owns. Knowing its true value means you can make the right financial decisions.


My mortgage statement has an item on it for PMI? Can I get rid of that?   (Go to list of  questions)

PMI is short for for Private Mortgage Insurance. PMI takes care of the lender in the event a borrower doesn't pay on the loan and the market price of the house is less than what is owed on 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 dropping the PMI required when you got your mortgage pays for the appraisal in a matter of months. Nobody is more qualified than JLD Evaluation, Inc. when it comes to analyzing real estate appreciation in Rocklin and Placer County. Contact us today.

How do I get ready for the appraiser?   (Go to list of  questions)

The first step in most appraisals is the home 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. Inside, 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 outside walls.

To help expedite our work as well as ensure a more accurate report, attempt if possible to have the following items:
  • Any records on the purchase of the property for the last three years.
  • 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 "Homeowners Associations" agreements or, if applicable, condo covenants or fees .
  • A list of any major home improvements and upgrades, the amount of their purchase and date of their installation (for example, the addition of central air conditioning 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?   (Go to list of  questions)

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?   (Go to list of  questions)

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.

This rule doesn't apply 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.


Are some home improvements more worthwhile than others?   (Go to list of  questions)

Like all things real estate, this is dependent on a home's location. 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.

As a rule, the best ROI from renovating a home comes in the kitchen. 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 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.