M & B Appraisals, LLC has answers to "Frequently Asked Questions"

M & B Appraisals, LLC is ready to address any questions you might have about appraisals in Columbia and Boone County. Don't hesitate to contact us today.

Define the term "Appraisal"
What does an appraiser do?
What would cause me to request a real estate appraisal?
How is an appraiser different than a home inspector?
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 report, how can I have a guarantee that the final number is accurate?
What are the requirements to be a certified appraiser?
Who employs appraisers?
Where does an appraiser get the information used to estimate values in Boone County or other areas?
Why should I hire a licensed appraiser?
What exactly is PMI and how can I get rid of it?
How do I get ready for the appraiser?
Define "Market Value"
Once complete, who actually owns the appraisal report?
How can I get the most ROI out of home improvements?



Define the term "Appraisal"   (Go to list of  questions)

The procedure of producing an appraisal report consists of an investigation which forms an opinion of value. There are three "common approaches to value" which assists the real estate appraiser arrive at this opinion or valuation. One of the processes in use is the Cost Approach, which evaluates what it would cost to replace the improvements to the home, minus age and physical deterioration, adding the land value. Easily the most common approach in finding the likely sales price of a house is the Sales Comparison Approach which concerns figuring a comparison to comparable properties close by. Generally speaking, the Sales Comparison Approach is the most definite indicator of market value of a home. The Income Approach is primarily used for determining the market value of income-producing properties based on what an investor would pay based on the amount of capital a property produce.

What does an appraiser do?   (Go to list of  questions)

An appraiser provides an unprejudiced and well justified determination of market value, often in the context of a real estate sale. Appraisers illustate their professional conclusions in appraisal reports.


What would cause me to request a real estate appraisal?   (Go to list of  questions)

There are many reasons to get an appraisal with the most common reason being real estate and mortgage transactions. Other reasons for ordering an appraisal report include:
  • If you are applying for a loan.
  • If you would like to lower your property tax burden.
  • To show a homeowner has 30% equity and remove Primary Mortgage Insurance.
  • To contest improperly assessed property taxes.
  • If you need to take care of an estate.
  • To offer you an edge when purchasing a home.
  • To find a likely 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.
  • It's possible you could have to deal with being in a lawsuit - an appraisal will definitely help.
For a more detailed explanation of the appraisal process click here.


How is an appraiser different than a home inspector?   (Go to list of  questions)

Appraisers do not do perform home inspections and are not home inspectors. The point of a home inspection is to evaluate the structure of the property from foundation to rooftop. Usually, a home inspection report will discuss the amenities and the requirements of the home: air conditioning (weather permitting), electrical functions, the condition of the heating system, the plumbing; then the structural integrity of the home such as the attic, exposed insulation, walls, floors, ceilings, windows, then the foundation, basement and other visible structures.

My agent performed a CMA for me. Is that the same as an appraisal?   (Go to list of  questions)

To be blunt, it's apples and oranges. The CMA depends on indistinct market trends. The appraisal is reliant on specific proven comparable sales. In addition, 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.

But the biggest difference is the person creating the report. Real estate agents, who may not have a true grasp of valuation methods or the entire market, write CMA's. A certified, Missouri licensed professional who has formed a career on valuing properties in and around Boone County is behind the appraisal. Moreover, the appraiser is an independent voice, with no vested interest in the value conclusion, unlike the agent, whose income is tied to the value of the home.

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

The main objective 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.
  • How the appraisal is supposed to be used.
  • The appraisal's purpose.
  • Precisely what "value" attribute is being reported and what that value means.
  • The effective date of the value opinion.(Sometimes this is in the past or maybe the future for new construction!)
  • Characteristics of the property that have a bearing on the value, including: location, physical attributes, legal attributes, economic attributes, the real property interest 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 considerations.
  • 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.
  • The scope of work used to complete the appraisal.
For a more comprehensive view of all that goes into an appraisal report click here: Sample Appraisal Report

After completing the report, how can I have a guarantee that the final number 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 proper.

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

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

  • The final appraisal report was clear, legitimate and defensible.
To become a state licensed appraiser, there are extensive education requirements as well as experience that must be attained - all with the end goal of being able to render unbiased value opinions. Plus, appraisers must obey a stringent industry code of ethics and comply with national standards of practice for real estate appraisal. The guidelines for developing an appraisal and reporting its results are guaranteed by enforcement of the Uniform Standards of Professional Appraisal Practice (USPAP).


    (Go to list of  questions) Licensing and certification takes coursework, tests and real world experience. Once an appraiser is licensed, he or she must then engage in continuing education courses in order to keep the license up to date. To see the specific requirements for any state click here.

Who employs appraisers?   (Go to list of  questions)

Mortgage lenders are an appraiser's most likely customer, requiring their services to ensure real estate involved in a mortgage transaction is enough to cover a loan balance in the case of default. Appraisers also provide opinions in litigation cases, tax matters and investment decisions.

Where does an appraiser get the information used to estimate values in Boone County or other areas?   (Go to list of  questions)

One of the most important things an appraiser does is to collect data. Data can be classified as either Specific or General. Specific data is collected from the property itself; Location, condition, amenities, size and other specifics are noted by the appraiser during an inspection.

General data is gathered from a numerous places. To research recently sold homes to be used as "comps", an appraiser will typically go to the local Multiple Listing Service. To double-check actual sales prices, we research tax records and other public documents. Flood zone data is available from FEMA data outlets, such as a la mode's InterFlood service.

And last but not least, the appraiser assembles general data from his or her collective knowledge gained from creating appraisals for other houses in the same market.

Why should I hire a licensed appraiser?   (Go to list of  questions)

If you're involved in any kind of financial decision and the value of your home is relevant, you'll want an appraisal. If you're selling your house, an appraisal will help you determine a price that maximizes profit and reduces time on the market. When buying, you can avoid overpaying by getting an independent appraisal. If you're engaged in an estate settlement or divorce, it ensures that property is divided fairly. A house is often the single, largest financial asset anybody owns. Knowing its true value is essential to making wise financial decisions.

What exactly is PMI and how can I get rid of it?   (Go to list of  questions)

PMI is an acronym for Private Mortgage Insurance. This additional policy guards the lender in case a borrower doesn't pay on the loan and the value of the house 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 part of your monthly mortgage payment?Call M & B Appraisals, LLC today at (573)449-4177 or send us an e-mail. A current appraisal could save you thousands.

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

The first step in most appraisals is the property inspection. 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. Is there anything you can do to help? Yes there is! First, be sure we have easy access to the exterior of the house (gates aren't locked, etc). Trim any landscaping and relocate any items that would get in our way while we measure the structure. Indoors, make sure the appraiser can get to appliances like furnaces and water heaters.

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 home.
  • Any documents, such as a title policy with information on encroachments or easements encroachments or easements.
  • Home inspection reports, or other recent reports for termites, EIFS (synthetic stucco) wall systems, your septic system and wells.
  • A list of "suggested" improvements when the property is being appraised "as complete".

Define "Market Value"   (Go to 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."

Once complete, who actually owns the appraisal report?   (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 certainly entitled to a copy of the report - it's usually included with all the other closing documents - but is not allowed to use the report for any other purpose without permission from the lender.

The exception to this rule is when a home owner engages an appraiser directly. In these scenarios, 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 use the appraisal for any purpose.

How can I get the most ROI out of home improvements?   (Go to list of  questions)

This really depends on where the home is. For example, if you live in a cold region, insulated windows can be a real plus. But they aren't as attractive in a warm-weather climate.

No matter where you go, however, renovating a kitchen is almost always a safe investment. According to one national survey, kitchen remodels returned an average of 88% of the investment. In other words, a $10,000 kitchen remodeling project would add approximately $8,800 to the value of the home. Bathrooms are right up there with kitchens, returning 85%. Adding bedrooms and baths can also increase the value of your home as long as your home doesn't then become atypical for your neighborhood in terms of size.