Frequently Asked Questions About Home Appraisals

A residential real estate appraisal is an independent, professional opinion of a property's value as of a specific date. A New Jersey State Certified Residential Real Estate Appraiser analyzes the property's characteristics, location, condition, and relevant market data to develop a supported value conclusion.

Depending on the property and purpose of the assignment, the appraiser may consider three recognized valuation approaches:

Sales Comparison Approach: Analyzes recent sales of comparable properties and accounts for relevant differences.

Cost Approach: Considers the estimated value of the land plus the depreciated cost of the improvements.

Income Approach: Analyzes a property's income-producing potential when applicable.

Not every approach is necessary or applicable to every residential appraisal.

A residential appraisal may be needed for a variety of financial, legal, or real estate decisions, including:

Home purchases and mortgage refinancing

Pre-listing and pre-purchase valuations

Estate settlements and retrospective date-of-death valuations

Divorce proceedings and equitable distribution

Property tax assessment appeals

Private mortgage insurance (PMI) removal

Bankruptcy and other legal proceedings

Trust administration and financial planning

Private transactions and for-sale-by-owner (FSBO) sales

The type of appraisal and reporting requirements depend on the intended use and intended users of the assignment.

A home appraisal and a home inspection serve different purposes.

An appraisal develops an opinion of the property's value using market data and relevant property characteristics. The appraiser observes the property to identify features and conditions that may affect value.

A home inspection is a more detailed evaluation of the property's physical condition, including major systems and components such as roofing, plumbing, electrical, heating, and cooling.

An appraisal is not a substitute for a home inspection. The appraiser's observation does not constitute a comprehensive evaluation of structural integrity, mechanical systems, or code compliance.

A Comparative Market Analysis, commonly called a CMA, is typically prepared by a real estate professional to help establish a potential listing or offering price.

An appraisal is a formal valuation assignment completed by a licensed or certified real estate appraiser. It involves an analysis of relevant market data, appropriate valuation methods, and a supported value conclusion.

Certified appraisers must comply with applicable professional standards, including the Uniform Standards of Professional Appraisal Practice (USPAP).

Both can provide useful information, but they serve different purposes and are subject to different professional requirements.

The contents of an appraisal report depend on the type of property, intended use, client requirements, and applicable reporting standards.

A residential appraisal report may include:

Identification and description of the property

Effective date of the appraisal

Property characteristics, including size, design, condition, and improvements

Neighborhood and local real estate market analysis

Comparable property sales and relevant adjustments

Applicable valuation approaches

Photographs, maps, and supporting market information

A final opinion of value

Additional information may be required depending on the assignment.

Hoyt Appraisals uses multiple sources to research and analyze residential properties throughout Northern New Jersey.

These may include local Multiple Listing Services (MLS), municipal tax assessment records, public property records, recorded deeds, zoning information, FEMA flood maps, and other relevant market resources.

Information obtained during the property observation is considered along with available public records and market data. Sources are reviewed and analyzed as appropriate for the appraisal assignment.

In some circumstances, a current property valuation may help a homeowner request cancellation of private mortgage insurance.

Eligibility depends on several factors, including the mortgage type, loan terms, payment history, property value, and the lender's or loan servicer's requirements.

Some lenders require an appraisal or another approved valuation to verify the property's current value. Before ordering a private appraisal for PMI removal, homeowners should contact their loan servicer to determine the specific requirements and whether an independently ordered appraisal will be accepted.

A few simple preparations can help the property observation proceed efficiently.

Provide access to all rooms and relevant areas of the dwelling.

Ensure that the basement, attic access, and other applicable areas are accessible.

Make sure the exterior of the property can be observed.

Provide information about recent renovations, additions, or major improvements.

Have available any relevant permits, surveys, floor plans, or other property documents.

You do not need to make cosmetic improvements solely for the appraisal. The appraiser will consider the property's observed condition as part of the valuation process.

Market value generally refers to the most probable price a property would bring in a competitive and open market under the conditions specified in the applicable definition of value.

The analysis typically assumes that the buyer and seller are acting prudently and knowledgeably, that the property has been exposed to the market for a reasonable period, and that the transaction is not influenced by unusual circumstances.

The specific definition of market value used in an appraisal depends on the assignment and its intended use.

The appraiser's client is generally the party who engages the appraiser for the assignment.

For mortgage lending appraisals, the lender or another authorized party is typically the client, even when the borrower pays the appraisal fee.

For privately ordered appraisals, the homeowner, attorney, or other party engaging the appraiser may be the client.

Appraisal reports identify their intended use and intended users. Confidentiality requirements and applicable professional standards govern disclosure of assignment results. An appraisal prepared for one purpose may not be appropriate for another without additional analysis or a separate assignment.

Home improvements can contribute to a property's market value, but the amount spent on an improvement does not necessarily equal its contributory value.

Updated kitchens, bathrooms, mechanical systems, additions, and other improvements may influence value depending on the property's location, condition, and market expectations.

The appraiser analyzes available market evidence to determine how buyers respond to particular property features and improvements. Some renovations may contribute substantially to value, while others may have a more limited impact.

The time required depends on the property's size, complexity, location, availability of comparable sales, and the purpose of the assignment.

The property observation is only one part of the process. Additional time is required for market research, comparable sales analysis, verification of information, and preparation of the appraisal report.

An estimated completion time can be provided after reviewing the assignment details.

Hoyt Appraisals, LLC provides residential real estate appraisal services throughout Northern New Jersey, with a primary focus on:

Bergen County

Passaic County

Morris County

Sussex County

Services are available for a variety of residential property types, including single-unit dwellings, condominiums, townhouses, and multi-unit residential properties.

Contact Hoyt Appraisals, LLC to discuss the property location, purpose of the appraisal, and any applicable reporting requirements.

Cres Ann Hoyt, SCRREA
NJ State Certified Residential Real Estate Appraiser
Hoyt Appraisals, LLC

Call or Text: 201-417-8836

Serving Bergen, Passaic, Morris, and Sussex Counties, New Jersey.