Hanlin Real Estate Service has answers to "Frequently Asked Questions"

Hanlin Real Estate Service is always ready to elaborate on any concerns you might have about appraisals or real estate in Pennville and Jay County. Contact us today to see how we can help solve your specific valuation problems.

Define the term "Appraisal"
What does an appraiser do?
Why would a person require a real estate appraisal?
What is the difference between an appraisal and a home inspection?
Is an appraisal the same as a comparative market analysis(CMA)?
What can I expect to see in my appraisal report?
Once the appraisal has been completed, what guarantee is there that the value indicated is legitimate?
How difficult is it to become certified?
Who engages the services of appraisers?
Where does an appraiser get the information used to estimate values in Jay County or other areas?
How can a licensed appraiser help me?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
What is "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"   (See list of FAQ's)

An appraisal is an inspection that concludes with an opinion of value. This opinion or estimate is concluded through a formal method that commonly uses three "common approaches to value". The Cost Approach is one of the approaches that real estate appraisers use to find value; it involves discerning what the improvements would cost minus physical degradation, adding the land value. The Sales Comparison Approach involves searching for comparable properties in the vicinity and finding value based on making a comparison of those homes to the home being appraised. The Sales Comparison Approach is commonly the most accurate and clearest indicator of value for a home. The Income Approach is primarily 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?   (See list of FAQ's)

An appraiser offers a fair and credible assessment of market value, in the support of real estate exchanges. Appraisers illustate their professional analysis in appraisal reports.


Why would a person require a real estate appraisal?   (See list of FAQ's)

There are many reasons to order an appraisal from Hanlin Real Estate Service with the most common reason being real estate and mortgage transactions. Other reasons for ordering an report include:
  • To receive a loan.
  • To lower your tax burden.
  • To show a homeowner has 30% equity and remove PMI.
  • To fight inflated property taxes.
  • If you need to take care of an estate.
  • To provide you a leg-up when purchasing real estate.
  • To find a reasonable sales price when listing your home.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS require an appraisal on every home.
  • If you ever find yourself in a civil case.
For a more extensive explanation of the appraisal process click here.


What is the difference between an appraisal and a home inspection?   (See list of FAQ's)

Home inspectors do not estimate an opinion of value and are not appraisers. The point of a home inspection is to evaluate the structure of the house from foundation to top. The stereotypical house 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.

Is an appraisal the same as a comparative market analysis(CMA)?   (See list of FAQ's)

Honestly, they have nothing in common. What the CMA relies upon are vague trends. Appraisals use similar sales which are verifiable resources. Area and construction costs are also a priority in an appraisal. The CMA will provide a non-specific figure. Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

Who's behind the report is frankly the most significant 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 produce by a licensed, certified professional who makes a living out of valuing properties. Further, the appraiser is an unbiased party, 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 can I expect to see in my appraisal report?   (See list of FAQ's)

The main point 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:
  • Who engaged the appraiser and other intended users.
  • 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 appraisal.
  • Characteristics of the property that have a bearing on the value, including: location, physical characteristics, legal attributes, economic attributes, the real property interest in question, and non-real estate items included in the valuation, such as personal property, items that are more or less permanently installed and even intangible factors.
  • 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 in depth view of all that goes into an appraisal report click here: Sample Appraisal Report


Once the appraisal has been completed, what guarantee is there that the value indicated is legitimate?   (See list of FAQ's)

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

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

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

  • That a solid, substantiated appraisal report was imparted.
There are rigorous education and real world experience requirements that must be fulfilled in order to get an appraisal license in Indiana. Likewise, appraisers must stick to a strict industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for carrying out an appraisal and documenting its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


   (See list of FAQ's) Licensing and certification takes classroom study, tests and experience working under a supervisor. Once licensed, he or she is required to engage in 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)

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

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

Collecting data is one of the primary tasks an appraiser engages in. Data can be classified as either Specific or General. Specific data is from the home itself; Location, condition, amenities, size and other specifics are documented by the appraiser during an inspection.

General data is received from a variety of places. To find out about recently sold homes to be used as "comps", an appraiser will typically use the local Multiple Listing Service. To verify actual sales prices, we look at items in the assessor's office and other public documents. Appraisers routinely 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 last but not least, the appraiser assembles general data from his or her past experience in creating appraisals for other properties in the same market.


How can a licensed appraiser help me?   (See list of FAQ's)

If you're involved in any kind of financial decision and the value of your home matters, you'll want an appraisal. When selling your home, an appraisal helps you set the most appropriate price. When buying, you can avoid overpaying by getting an independent appraisal. For people settling an estate or divorce, an appraisal from Hanlin Real Estate Service is the best documentation to ensure assets are divided properly. A house is often the single, largest financial asset anybody owns. Knowing its true value means you can make 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. This added plan guards the lender in case a borrower doesn't pay on the loan and the market price of the home is less than what the borrower still owes on the loan. Once you can prove the amount you owe on your home is less than 80% of the home's market value, you can make a case to your lender to drop the PMI.

Did you secure your mortgage with less than 20% down? Contact Hanlin Real Estate Service today at 260-731-8725. You may be able to save money by removing your Private Mortgage Insurance payment.

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

We begin with an inspection of the property. During this process, we 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, pick up any clutter and make sure we can get to things like furnaces and water heaters. In the yard, trim any landscaping so we can be free to get an accurate measurement of exterior walls.

The following items, if available, will help your appraiser to provide a more accurate appraisal in a shorter period of time:
  • 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 a oven, or a washer and dryer, if applicable.
  • Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
  • Brag sheet that lists major home improvements and upgrades, the date of their installation and their cost (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
  • Find copies of the current listing agreement, broker's data sheet and, in the event of a pending sale.

What is "Market Value?"   (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 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 cases, the appraiser may state 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.


I want to get more for my house. Where should I spend money renovating?   (See list of FAQ's)

Like all things real estate, this is dependent on a home's location. For example, installing an inline humidifier could be nice in arid regions, but completely useless near the coast!

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 were second, returning 85%. On the contrary, work that may not add value would be painting just for the sake of redecorating.