Bohning Appraisals has answers to "Frequently Asked Questions"

Bohning Appraisals is more than happy to handle any concerns you might have about appraisals or real estate in Ponchatoula and Tangipahoa County. Feel free to contact us today.

What is an appraisal?
What does an appraiser do?
What would cause me to require 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 does the appraisal report contain?
After completing the appraisal, how can I have assurance that the value conclusion is valid?
How are appraisers certified?
Who are an appraiser's customers?
Where does Bohning Appraisals get the information used to estimate values in Tangipahoa County or other areas?
Why should I hire a licensed appraiser?
My mortgage statement has an item on it for PMI? Can I get rid of that?
Should I do anything in advance of the appraisal appointment
What is "Market Value?"
Who has rights to the appraisal report?
Which home renovations add the most to the price?



What is an appraisal?   (List of questions)

The process of writing an appraisal consists of an evaluation which forms an opinion of value. This opinion or estimate is discerned through a formal process that generally utilizes the three main "common approaches to value". The Cost Approach is one of the approaches that appraisers use to find the value of a home; it involves concluding what the improvements would cost without physical deterioration, adding the land value. The most common approach in finding the value of a house is the Sales Comparison Approach which concerns making a comparison to similar properties close by. The Sales Comparison Approach is commonly the most accurate and best indicator of a liklely sales price for a residential property. 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 would bring in.

What does an appraiser do?   (List of questions)

An appraiser offers an impartial and well substantiated determination of market value, in the support of real property transactions. Appraisers summarize their professional findings in appraisal reports.


What would cause me to require a real estate appraisal?   (List of questions)

There are many reasons to order an appraisal with the usual reason being real estate and mortgage transactions. Other reasons for ordering an appraisal include:
  • To receive a loan.
  • To reduce your tax burden.
  • To demonstrate a homeowner's acquired equity and remove PMI.
  • To fight inflated property taxes.
  • To handle an estate.
  • To offer you a leg-up when purchasing a home.
  • To figure out a reasonable price when putting your home on the market.
  • To ensure parties are provided just compensation in eminient domain cases.
  • Government agencies such as the IRS require an appraisal on every property.
  • If you are ever involved in a civil case.
For a more detailed explanation of the appraisal process click here.


Is an appraisal the same as a home inspection?   (List of questions)

Appraisers do not do perform residential property inspections and are not home inspectors. An inspection is a third-party evaluation of the livable structure and systems of a house, from the roof to the foundation. The archetypal 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 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)?   (List of questions)

Honestly, they have nothing in common. What the CMA depends on are ill-defined trends. The appraisal is reliant on similar proven comparable sales. Also, the appraisal checks other factors like condition, area and replacement costs. All a CMA does is generate a "ball park figure." Being a documented and carefully investigated opinion of value, appraisals are defensible and stand up in legal situations.

Who's creating the report is actually 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. A certified, Louisiana licensed professional who bases a career on valuing homes in and around Tangipahoa County creates the appraisal. Further, the appraiser is an independent voice, with no vested interest in the value of a home, unlike the real estate agent, who gets a commission based upon the value of the home.

What does the appraisal report contain?   (List of questions)

Every report must demonstrate a believable value opinion and must identify the following:
  • Who engaged the appraiser and whose purposes the appraisal is to serve.
  • The intended use of the appraisal.
  • The appraisal's purpose.
  • The type of value reported and a definition of the value reported.
  • The effective date of the value opinion.
  • Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic factors, the property rights valued, and non-real estate items included in the appraisal, such as personal property, trade fixtures and even intangible factors.
  • All known easements, restrictions, encumbrances, leases, reservations, covenants, contracts, declarations, special assessments, ordinances, and other items of a similar nature.
  • 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 comprehensive view of the work that goes into an appraisal report click here: Sample Appraisal Report

After completing the appraisal, how can I have assurance that the value conclusion is valid?   (List of questions)

In the documentation of an appraisal, each appraiser must make sure of the following:
  • The appraisal used analysis of the information.

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

  • That appraisal services were provided in a careful and conscientious fashion.

  • That a believable, substantiated appraisal report was conferred.
There are intense education and on the job experience requirements that must be satisfied in order to achieve the title of "licensed appraiser" in Louisiana. In addition, appraisers must abide by a meticulous industry code of ethics and respect national standards of practice for real estate appraisal. The tenets for developing an appraisal and communicating its results are insured by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (List of questions) Regulations regarding licensing and certification of Real Estate Appraisers are different from state to state. However, licensing and certification typically translates to many hours of classroom study, tests and real world experience. Once an appraiser is licensed, he/she is required to engage in continuing education courses so the license stays current. To see the specific requirements for any state click here.

Who are an appraiser's customers?   (List of questions)

Typically, appraisers are employed by mortgage lenders to estimate the value of a house involved in a loan transaction. Attorneys and CPAs also retain the services of appraisers for asset division and estate settlements.

Where does Bohning Appraisals get the information used to estimate values in Tangipahoa County or other areas?   (List of questions)

Gathering information is one of the primary tasks an appraiser does. Data can be classified as either Specific or General. Specific data is gathered from the property 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 research recently sold homes to be used as "comps", we often use the local Multiple Listing Service. Tax records and other public documents reveal actual sales prices in a market. Appraisers often need to report when a property is in a flood zone, so that information is retrieved from a FEMA data outlet such as a la mode's InterFlood service.

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

Why should I hire a licensed appraiser?   (List of questions)

Any time the value of your home or other real property is being used to make a significant financial decision, an appraisal helps. When selling your home, an appraisal helps you set a price that maximizes profit and reduces time on the market. When buying, you can avoid overpaying by getting an independent appraisal. For people settling an estate or divorce, an appraisal from Bohning Appraisals is the best way to ensure assets are divided fairly. A home is often the single, largest financial asset anybody owns. Without knowing its real value, wise financial decisions are impossible.

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

PMI is an acronym for Private Mortgage Insurance. This additional plan takes care of the lender if a borrower defaults on the loan and the market price of the home 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 savings from dropping your PMI pays for the appraisal in a matter of months. Nobody is more qualified than Bohning Appraisals when it comes to analyzing real estate appreciation in Ponchatoula and Tangipahoa County. Contact us today.

Should I do anything in advance of the appraisal appointment   (List of questions)

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, pick up any clutter and make sure 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.

You can make the inspection go faster and improve the quality of the appraisal report by having the following things on hand:
  • Any information on the purchase of the property for the last three years.
  • A list of any personal property that will be left behind and sold with the home, such as a oven, or a washer and dryer, if applicable.
  • A bill for your most recent real estate taxes which should also contain a legal description of the property.
  • A list of any major home improvements and upgrades, the date of their installation and their cost (for example, the addition of central air conditioning or roof repairs) and permit confirmation (if available).
  • Any "Homeowners Associations" agreements or, if applicable, condo agreements or fees .

What is "Market Value?"   (List of questions)

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?   (List of questions)

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 report - it's usually bundled with all the other closing documents - but is not entitled to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner hires an appraiser directly. In these scenarios, the appraiser may state 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.

Which home renovations add the most to the price?   (List of questions)

Like all things real estate, this is dependent on a home's location. For example, putting in 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 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, returning 85%. Adding bedrooms and baths can also increase the value of your home (when done well) as long as your home doesn't then become an oddball for your neighborhood in terms of size.