Sharon Nixon Appraisal Services has answers to "Frequently Asked Questions"

Sharon Nixon Appraisal Services is happy to answer any inquiries you might have about appraisals or real estate in Elk Grove and Sacramento County. Contact us today to talk about how we can help solve your valuation problems.

What is an appraisal?
Describe what an appraiser does
What are the reasons someone would require services from Sharon Nixon Appraisal Services?
Is an appraisal the same as a home inspection?
My agent performed a CMA for me. Is that the same as an appraisal?
What are the contents of an appraisal report?
After completing the appraisal, what assurance is there that the value indicated is valid?
How hard is it to become certified?
Who hires an appraiser?
Where does an appraiser get the data used to estimate values in Sacramento 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?
Are some home improvements more worthwhile than others?



What is an appraisal?   (Back to top)

The appraisal process is an evaluation that produces an opinion of value. This opinion or estimate is concluded by using a formal process that commonly uses three "common approaches to value". One of the methods is the Cost Approach - which is how much it would cost to replace the improvements, less physical deterioration and other factors, then adding the land value. The Sales Comparison Approach involves searching for similar homes in the vicinity and discovering the value based on making a comparison of those prior sales to the house being appraised. The Sales Comparison Approach is normally the most accurate and clearest indicator of a liklely sales price 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.

Describe what an appraiser does   (Back to top)

An appraiser generates a fair and credible determination of market value, in the support of real property exchanges. Appraisers present their professional findings in appraisal reports.


What are the reasons someone would require services from Sharon Nixon Appraisal Services?   (Back to top)

There are a lot of reasons to get an appraisal with the most common reason being real estate and mortgage transactions. Some other reasons for ordering an report include:
  • If you are applying for a loan.
  • To lower your property taxes.
  • To show a homeowner has 30% equity and remove insurance.
  • To contest inflated property taxes.
  • To handle an estate.
  • To provide you a negotiating tool when purchasing real estate.
  • To figure out the most probable property value when listing your home.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS need an appraisal on every house.
  • If you are ever involved in a civil case.
Click here for a more extensive explanation of the process dealing with getting an appraisal.


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

Home inspectors do not come to an opinion of value and are not appraisers. The point of a home inspection is to investigate the structure of the home from bottom to attic. Commonly, a home inspection report will explain the amenities and the requirements of the home: air conditioning (weather permitting), electrical services, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, accessible insulation, walls, floors, ceilings, windows, then the foundation, basement and visible structures.

My agent performed a CMA for me. Is that the same as an appraisal?   (Back to top)

Frankly, they share nothing in common. The CMA relies on indistinct trends in the market. An appraisal utilizes comparable sales that can be validated by public record. The appraisal report will also include area and building costs. A CMA delivers a "ball park figure." Delivering a defensible and careful analysis, an appraisal will give a clear opinion of value.

The person behind the report is frankly the most significant difference between a CMA and an appraisal. Real estate agents produce CMA's, and they don't always know the whole market or bear specific competence when it comes to home valuation. A certified, state licensed professional who bases their livelihood on valuing homes in and around Sacramento County creates the appraisal. Likewise, the agent has a vested interest in the property's selling price whereas the appraiser is bound by a code of ethics to collect only a flat fee for work they perform, regardless of their value conclusion.

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

Every report should reflect a believable value opinion and must identify 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 appraisal.
  • Pertinent property attributes, including: location, physical attributes, legal attributes, economic factors, the real property interest valued, and non-real estate items included in the valuation, such as personal property, trade fixtures 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 assignment.
For a more comprehensive look at what goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, what assurance is there that the value indicated is valid?   (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 proper.

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

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

  • That a credible, defensible appraisal report was imparted.
To become a state licensed appraiser, there are extensive education requirements as well as on the jobexperience that must be attained. Likewise, appraisers must follow a stringent industry code of ethics and observe national standards of practice for real estate appraisal. The rules for developing an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Back to top) Licensing and certification takes coursework, tests and experience working under a supervisor. Once licensed, he/she must then complete continuing education courses so that the license doesn't expire. To see the specific requirements for any state click here.

Who hires an appraiser?   (Back to top)

Mortgage lenders are an appraiser's most likely customer, needing their services to ensure a home involved in a mortgage transaction is adequate collateral for a loan. Attorneys and CPAs also hire appraisers for divorce and estate settlements.

Where does an appraiser get the data used to estimate values in Sacramento County or other areas?   (Back to top)

Collecting information is one of the main tasks an appraiser engages in. 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 gathered by the appraiser while on site.

General data is collected from a numerous places. To find out about recent sales to be used as "comps", we often go to the local Multiple Listing Service. Tax records and other public documents verify actual sales prices in a market. Appraisers often need to report when a property lies in a flood zone, and that information is retrieved from a FEMA data outlet such as a la mode's InterFlood product.

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

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

If you're making any kind of financial decision and the value of your home matters, you'll want an appraisal. For those selling a home, you'll want to figure out a price that gets you the most profit but doesn't leave your home on the market too long; an appraisal can help with that. If you're buying, it makes sure you don't overpay. For parties settling an estate or divorce, an appraisal from Sharon Nixon Appraisal Services is the best way to ensure assets are split up fairly. A home is often the single, largest financial asset anybody owns. Knowing its true value is essential to making the right financial decisions.

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

PMI is short for for Private Mortgage Insurance. This added plan covers the lender in the event a borrower doesn't pay on the loan and the market price of the home is lower than the balance of 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.

Is PMI a lineitem in your monthly mortgage payment?Call Sharon Nixon Appraisal Services today at 916.685.0477 or send us an e-mail. A current appraisal could save you thousands.

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

We begin with an inspection of the home. 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 find our way to things like furnaces and water heaters. In the yard, trim any bushes so we can be free to get an accurate measurement of outside 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.
  • List of personal property to be sold with the building.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, septic systems and your well.
  • A list of any major home improvements and enhancements, the amount of their purchase and date of their installation (for example, the addition of Insulation or roof repairs) and permit confirmation (if available).
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.

What does "Market Value" mean?   (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 has rights to the appraisal report?   (Back to top)

For mortgage transactions, the lender requests 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 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.

It's different when it's the homeowner hiring the appraiser for things outside securing a mortgage. In these cases, the appraiser may state how the appraisal can be used; for PMI removal, or estate planning or tax challenges, for example. If not noted otherwise, the home owner can do whatever they want with the appraisal.

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

A home's location - what city it is in and even what part of that city - is key to this popular question. 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

No matter where you go, however, renovating a kitchen is almost always a safe investment. 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 weren't far behind, yielding 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become an oddball for your neighborhood in terms of size.